Daily & Daily (No 6)
[2024] FedCFamC1F 889
•20 December 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Daily & Daily (No 6) [2024] FedCFamC1F 889
File number(s): ADC 4606 of 2018 Judgment of: BERMAN J Date of judgment: 20 December 2024 Catchwords: FAMILY LAW – COSTS – Where the applicant seeks costs on an indemnity basis for $235,000 – Where the applicant concedes that costs should be assessed on a party/party basis and limited to $150,000 held in a joint bank account – Where the respondent also seeks an order for costs – Where the respondent provides no evidence or assistance in relation to the quantum sought – Consideration of s 117(2A) of the Family Law Act 1975 (Cth) – Consideration of the various offers made – Consideration of the parties financial circumstances – Costs order. Legislation: Family Law Act 1975 (Cth) s 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 r 1.04
Cases cited: Bant & Clayton (Costs) [2016] FamCAFC35
Daily & Daily (2020) FamCAFC 304
Daily & Daily (2020) 61 Fam LR 75
Daily & Daily [2024] FedCFamC1A 185
Parke & the Estate of the late A Parke [2016] FLC 93-748
Robinson & Higginbotham (1991) FLC 92-209
Division: Division 1 First Instance Number of paragraphs: 92 Date of hearing: 4 December 2024 Place: Adelaide Counsel for the Applicant: Litigant in person Counsel for the First Respondent: Mr Rowley Solicitor for the First Respondent: Charlton Rowley Legal Counsel for the Second Respondent: Ms Doyle Solicitor for the Second Respondent: Barry Nilsson Lawyers ORDERS
ADC 4606 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS DAILY
Applicant
AND: MR DAILY
First Respondent
R LAWYERS
Second Respondent
ORDER MADE BY:
BERMAN J
DATE OF ORDER:
20 DECEMBER 2024
THE COURT ORDERS THAT:
1.Order 4 of orders made 13 March 2024 be discharged.
2.The parties do all thing necessary to withdraw funds payable to the applicant in the sum of $70,000 from the joint Westpac Account ending …95.
3.The respondent is entitled to retain the balance of funds held in the joint Westpac Account without further claim by the applicant.
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
BERMAN J
INTRODUCTION
By Application in a Proceeding filed 21 February 2024, Ms Daily (“the applicant”) seeks that Mr Daily (“the respondent”) pays her costs of and incidental to the proceedings on a party/party basis:
2.1 As and from 25 September 2018, fixed in the sum of $258,434.59;
2.2 In the alternative, as and from 6 May 2019, fixed in the sum of $234,585.39.
In addition, the applicant seeks that the respondent be restrained from dealing with the sum of $150,000 of monies payable to him pursuant to paragraph 1.2 of orders made 9 February 2024.
The orders made on 9 February 2024 provided that by way of property settlement and division, the parties do all things necessary to cause the sum of $741,634 (“the settlement sum”) to be withdrawn from the parties’ joint Westpac account ending …59 and be paid to the trust account of ZZ Lawyers for and on behalf of the applicant. The orders also provided for R Lawyers (“the second respondent”) to pay the respondent the sum of $38,000 by way of damages in full and final settlement of his claim.
Further orders made on 13 March 2024 provided as follows:
1. The operation of order 6 made on 9 February 2024 be stayed.
2. The operation of orders 1.1 made on 9 February 2024 be stayed as follows:
(a)That the wife be restrained from accessing or using the sum of $241,634 currently held in the trust account of [ZZ Lawyers] save and except if those funds are required to be used for the purchase of real property with the first respondent registered as the sole proprietor.
3. Paragraph 2 of orders made 9 February 2024 be discharged.
4.The husband be restrained and an injunction granted restraining him from accessing and/or withdrawing the sum of $150,000 of the transferred funds from the parties’ joint Westpac Bank Account ending […59].
It is agreed that the applicant accessed the balance of the funds held in her solicitors’ trust account for the purpose of purchasing real property. In addition, as a result of costs orders made in favour of the applicant consequent upon Full Court proceedings, the amount remaining in the Westpac account as at the date of the hearing of the costs application was $120,000. Further, an agreement was reached between the parties that the order of injunction would be varied such that the respondent could access $6,000.
Save as to any interest that may have accrued on the amount standing to the credit of the parties, the amount currently remaining in the Westpac account is in the sum of approximately $114,000.
By Response to an Application in a Proceeding filed 20 March 2024, the respondent seeks the following orders:
1.That the [applicant] be restrained and an injunction be granted restraining her from dealing with $500,000 of the monies payable to her pursuant to 1.1 of orders dated 9 February 2024 and/or order 2(a) of orders dated 13 March 2024.
2. That order 4 of the orders dated 13 March 2024 be discharged.
3.That the [applicant]’s Application in a Proceeding filed 21 February 2024 be dismissed.
4.That the [applicant] pay the [respondent]’s costs of and incidental to these proceedings to be agreed or taxed.
5.That the [respondent] have liberty to file and serve a further affidavit itemising his costs.
It is agreed that there is no utility in terms of proposed order 1 given that the applicant has utilised the part payment of the settlement sum.
Whilst there was initial participation by the second respondent, they did not seek to be heard in respect of the issue of costs as between the parties.
BACKGROUND
The parties commenced cohabitation in 1997 and were married in 2005. The parties separated on 15 September 2018 and a divorce order was granted in late 2019.
The respondent commenced proceedings by filing an Initiating Application on 5 November 2018 that sought orders solely relating to parenting orders. The applicant filed a Response on 7 December 2018 and introduced property settlement predicated upon the setting aside a Binding Financial Agreement (“BFA”) together with orders for spousal maintenance.
Parenting orders were resolved in short compass on 17 May 2019.
The applicant filed an Amended Response on 19 November 2019 and a Further Amended Response on 11 December 2019.
The first trial occurred between 27 April 2020 and 1 May 2020 resulting in a judgment being delivered on 17 June 2020 (“the first judgment”). In summary, I found that by reason of hardship, the financial agreement entered into between the parties dated 21 July 2005 should be set aside pursuant to s 90K(1)(d) of the Family Law Act 1975 (Cth) (“the Act”).
The respondent appealed my decision on 14 July 2020 and on 9 December 2020, the Full Court found that I had erred in my determination that the applicant had properly established hardship and remitted the matter back to me for hearing.
On 31 May 2021, the respondent filed an Amended Initiating Application joining the second respondent and seeking damages against them for breach of contract and/or negligence arising from their engagement with the respondent in the preparation of the BFA.
The respondent filed a Further Amended Initiating Application on 13 August 2021 which provided further and better particulars of his claim against the second respondent.
The second trial was heard between 14 February 2022 and 18 February 2022 and it involved the applicant, the respondent and the second respondent. Judgment was delivered on 31 March 2023 (“the second judgment”) which dealt with matters of property settlement as between the parties and a modest award of damages in favour of the respondent arising from a finding of negligence by the second respondent.
The respondent appealed the second judgment on 26 April 2023 and on 3 August 2023, the Full Court dismissed the appeal and made a costs order against the respondent and in favour of the second respondent.
On 27 November 2023, the parties and the second respondent were heard as to the issue of damages. Judgment was delivered on 9 February 2024 finalising property settlement in favour of the applicant and a damages order was made against the second respondent in favour of the respondent.
The respondent became self-represented on 8 December 2023.
On 17 October 2024, the Full Court dismissed the appeal against the applicant but upheld the appeal as against the second respondent. Orders were made that finalised the s 79 proceedings between the parties and as such, the applicant’s Application for costs filed 21 February 2024 and the Response filed 3 April 2024 was listed for hearing with judgment reserved on 4 December 2024.
The applicant concedes that if she is successful on her costs application, then costs should be assessed on party/party basis and limited to the sum of $150,000. It is a reasonable extension of the applicant’s position that if successful, the extent of the costs as sought by her would be limited to the amount that remains in the Westpac account ending …59 which is currently still subject to the order of injunction made on 9 February 2024.
Whilst the respondent seeks an order for costs against the applicant, there is nothing of assistance in his affidavit of 26 March 2024 which sets out the quantum sought by him. There is however, a reference in his Outline of Case document filed 4 December 2024 which sets out the factors that may support an order for costs to be made namely:
(1)The financial position of the respondent is disproportionately worse than that of the applicant;
(2)Neither party made offers which were beaten by the outcome the subject of the final orders;
(3)There is no assertion on the part of the applicant as to any adverse conduct on the part of the respondent as to the manner in which he participated in the proceedings such as to be relevant under s 117(2A) of the Act; and
(4)The respondent was successful in defending the property claims of the wife in that she did not succeed to the extent she was claiming.
It is a reasonable assessment of the manner in which the respondent’s case was presented is that the Court should focus on the applicant’s application for costs and the respondent’s opposition to same rather than the respondent’s lightly pressed claim for costs against the applicant.
APPLICATION FOR COSTS
In considering what orders, if any, should be made in respect of the applicant’s costs, s 117(2A) of the Act sets out that the Court shall have regard to the following:
(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, admission 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.
Accordingly, whilst the primary consideration of s 117 of the Act is that each party should pay their own costs, the applicant argues that there are circumstances which would justify the Court making an order pursuant to s 117(2A) of the Act.
If an order for costs is made in favour of the applicant, she argues that it should be assessed and paid on a party/party basis and in any event, she seeks an amount that does not exceed the balance of money held in the joint Westpac account.
After the filing of the applicant’s Application for costs, she ceased instructing her solicitors and has thereafter represented herself.
For his part, the respondent was a self-represented litigant for a short period of time however, by reference to a Notice of Address for Service dated June 2024, the respondent has been represented by solicitors.
At the hearing, the applicant relied on the following documents:-
(1)Application in a Proceeding filed 21 February 2024.
(2)Affidavit of the applicant filed 21 February 2024.
(3)Affidavit of the applicant filed 3 June 2024.
The respondent relied upon the following documents:-
(1)Response to Application in a Proceeding filed 20 March 2024.
(2)Affidavit of the respondent filed 20 March 2024.
(3)Affidavit of the respondent filed 1 November 2024.
(4)Financial Statement filed 1 November 2024.
(5)Outline of Case document filed 4 December 2024.
Applicant’s costs to date
The applicant’s affidavit filed 21 February 2024 annexes the following documents:
(1)A copy of the applicant’s costs agreement with her previous solicitors dated 18 October 2018;
(2)A copy of the applicant’s costs agreement with her senior counsel dated 9 April 2021; and
(3)A copy of the applicant’s costs agreement with her junior counsel dated 11 December 2023.
Given that the applicant does not seek a costs order in respect of the component of her total costs relating to parenting matters, I accept that her costs in respect of parenting and property matters were in the sum of $21,362 (inclusive of GST) but of greater relevance is the assessment of her costs in respect of property matters only which total $321,461.
Annexure “5” to the applicant’s affidavit filed 21 February 2024 provides a comprehensive consideration of the costs incurred by the applicant from 25 September 2018 until delivery of the final judgment. The schedule provides for a comparison of the solicitor/client costs as charged pursuant to the terms of engagement entered into by the applicant and the equivalent cost if assessed under the family law scale.
By reference to the schedule of fees billed 25 September 2018 to final judgment, the fees assessed on a party/party basis are as follows:
Solicitor’s fees $108,941 Counsel fees $139,232 Expert fees $5,335 Disbursements $10,744
There was no suggestion made on behalf of the respondent that there was a serious challenge to the quantum as sought by the applicant if her costs application was successful, particularly given that the applicant limits the amount sought to that which remains in the joint account.
The financial circumstances of each of the parties
It is apparent that the litigation has been financially ruinous for each of the parties. The respondent sets out his legal fees in his affidavit filed 20 March 2024 as totalling $825,853 up to 22 October 2023. It is likely that the total of the respondent’s legal fees exceed $1,000,000.
The applicant is employed as a public servant on an income of about $98,302 per annum. It is accepted that her income is likely to increase by reason of pay increases. In addition, as at 21 February 2024 the applicant had the following assets and liabilities:
Description Value Motor vehicle, furniture & effects $36,250 Personal savings Nil Westpac credit card ($13,053) Outstanding legal fees (excluding WIP) ($108,968) Payment into previous solicitors’ trust account $741,634 Superannuation entitlement $370,000
The applicant estimates that she will have approximately $655,863 in non-superannuation assets after discharging her outstanding legal fees and credit card debt. In addition, the applicant has been charged approximately $26,000 for the preparation of her costs application.
As is now understood, the applicant has utilised the funds in her previous solicitor’s trust account to purchase real property.
The respondent relies upon his Financial Statement filed 1 November 2024. A consideration of the financial summary suggests that the respondent remains unemployed and is in receipt of Centrelink benefit, pension or allowance to the total sum of $782 per week. The respondent lists his weekly expenditure at the total sum of $1,857 with the most significant component being a rental commitment of $750 per week.
The respondent’s total value of property owned is modest in the sum of $231,101 comprised principally of $151,101 being the sum restrained by the Court order made 13 March 2024.
His liabilities are in the sum of $245,222 including loans to the respondent’s parents of $51,584 and to D Family Trust of $103,168 totalling $154,752. The liability to D Family Trust was created by the respondent transferring money made available to him by order of 13 March 2024 and then used by him for personal expenses and private school fees. Solicitor’s fees owing on the Full Court Appeal are in the sum of about $50,000 with costs ordered by the Full Court payable to the applicant in the sum of $24,800. There is also some further personal expenses being school fees totalling $14,170.
The financial position of each of the parties could be summarised as modest in terms of the applicant and parlous in terms of the respondent.
An additional factor is the likely future legal fees to be incurred by the respondent in respect of the proceedings as between the respondent and the second respondent being remitted for hearing and the extent to which the respondent will engage in the application to the High Court filed by the second respondent on 19 November 2024 seeking special leave.
It is a matter for the respondent as to the extent he pursues or choses to engage in ongoing litigation however, as between the parties, the proceedings have concluded, and I do not consider that the financial circumstances of either of the parties should prevent the question of costs being determined.
The conduct of the parties
Rule 1.04 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Rules”) provides as follows:
(1)The overarching purpose of these Rules, as provided by section 67 of the Federal Circuit and Family Court Act, is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible.
(2)Parties to family law proceedings must conduct the proceeding (including negotiations for settlement of the dispute to which the proceeding relates) in a way that is consistent with the overarching purpose.
(3)A party’s lawyer must, in the conduct of a proceeding before the court (including negotiations for settlement) on the party’s behalf:
(a)Take account of the duty imposed on the party referred to in subrule (2); and
(b) Assist the party to comply with the duty.
The main purpose of the Rules is to resolve proceedings in a just and timely manner and at a cost to the parties and the Court that is reasonable in all the circumstances.
It appears that as and from 25 September 2018, each of the parties prepared and exchanged a number of offers to settle with an offer even being exchanged as recently as 22 September 2023.
It could not be said that the conduct of either of the parties led in some way to an additional burden or costs being incurred. Neither party was obstructive nor were there issues as to non-disclosure or the breach of the Rules.
Whilst the proceedings were complex and at times the litigation was unrelenting, neither party sought an unreasonable order or refused to negotiate.
I do not consider that the parties were put to additional expense as a result of unreasonable or irrelevant evidence.
The applicant argues that the proceedings were initially dealing with whether the financial agreement should be binding on the parties or set aside, and ultimately, she received orders pursuant to s 79 of the Act, the respondent argues that the setting aside of the BFA and the orders for property settlement made in favour of the applicant was resolved only after the second trial.
However, in any event, neither party argues that conduct is a relevant consideration.
Failure to comply with previous orders
Whilst the Court is obliged to have regard to whether the proceedings were necessitated by the failure of a party to comply with previous orders, no such conduct is alleged or asserted.
Whether any party to the proceedings has been wholly unsuccessful in the proceedings
The Court should have regard to whether any party was wholly unsuccessful in the proceedings. A consideration of what is intended by the term “wholly unsuccessful” has been the subject of judicial consideration. In Parke & the Estate of the late A Parke [2016] FLC 93-748 the Full Court considered the decision in Bant & Clayton (Costs) [2016] FamCAFC35 at [18] and went on to say as follows:
36.We are of the opinion that so far as the criteria in s 117(2A)(b) – (f) are concerned, these are matters which are limited to the appeal proceedings because in each case, those sections refer to “the proceedings”. However, other matters, so long as they are relevant may be considered by reason of the provision of s 117(2A)(g) which does not contain the limitation of “the proceedings”.
As discussed, following the first trial between 27 April 2020 to 1 May 2020 judgment was delivered on 17 June 2020. The proceedings were bifurcated and the only aspect for consideration was the status of the financial agreement entered into by the parties dated 21 July 2005.
At [193] of Daily & Daily (2020) 61 Fam LR 75 (“the 2020 judgment”) I found as follows:
In circumstances where I cannot be satisfied that the wife received the advice as required under s 90G(1)(b) of the Act, there has not been compliance with the section and subject to a consideration of the provisions of s 90G(1A) of the Act I have determined that the agreement is not binding on the parties.
However, for the reasons that appear in the 2020 judgment at paragraphs [194] to [221] I applied the provisions of s 90G(1A) and found that it would be unjust and inequitable if the agreement was not binding.
I did however then consider that there was merit in the applicant’s further claim pursuant to s 90K(1)(d) of the Act concerning a material change in circumstances relating to the care, welfare and development of a child and as a result of which the applicant would suffer hardship if the Court did not set the agreement aside.
The respondent was successful in his appeal and on 9 December 2020 the appeal was allowed and the proceedings were remitted for rehearing.
In Daily & Daily (2020) FamCAFC 304 the Full Court considered the utility of a rehearing and expressed the following concern in their judgment:
39.As we raised with the parties on the hearing of the appeal, a central aspect of this matter which gives us considerable disquiet about an order for rehearing of the proceedings, is whether the subject agreement will ultimately be found to be void for uncertainty. As already noted, at [315] of his Honour’s reasons the primary judge expressed reservations about whether the provisions of the agreement “are capable of clear understanding”. We share those reservations. At the least, the proper construction of the financial agreement must be identified so as to be able to determine what assets the parties are to receive under it, a finding necessary for the consideration of the issue of hardship.
The remitted hearing was heard between 14 and 18 February 2022 and then 12 August 2022. The applicant’s position was that the financial agreement should be set aside. That outcome was opposed by the respondent.
On 31 March 2023 I ordered as follows:
1.Pursuant to s 90K(1)(d) and/or s 90KA of the Family Law Act 1975 (Cth), the financial agreement entered into between the parties dated 21 July 2005 be set aside.
2.The matter be listed for further submissions on the question of the quantum of damages on a date to be determined in consultation with the parties.
Whilst the respondent successfully appealed the subsequent determination as to the quantum of damages that should be awarded, he was unsuccessful in respect of the finding that the financial agreement entered into between the parties dated 21 July 2005 should be set aside.
In that respect, it is arguable that the second hearing could be considered as a separate and stand alone proceeding in which the respondent was wholly unsuccessful in resisting the orders sought by the applicant. Moreover, given the consideration by the Full Court as to the question of whether the agreement would be found to be void for uncertainty, it could not be said that the respondent was not properly alerted to a difficulty with the financial agreement if not the potential for it to be set aside if the Court found that hardship had been established and/or that it was void for uncertainty.
The respondent relied upon a Further Amended Initiating Application filed 13 August 2021 which sought the following orders:
1.A declaration that the financial agreement made between the applicant and the first respondent on 21 July 2005 is binding on the parties or that it would be unjust or inequitable if the said agreement was not binding on them and that the said agreement be enforced as if it was an order of the Court.
2.In the event that the said agreement is not binding on the parties then the second respondent pay damages costs and interest to the applicant for breach of contract and/or negligence, in accordance with the [respondent]’s Statement of Claim against the second respondent annexed hereto and marked with the letter “C”.
Having regard to the schedule of fees billed as annexed to the applicant’s affidavit, the fees charged on a party/party basis between 7 June 2021 when the applicant received the respondent’s Amended Initiating Application and to the date of the perusal of the judgment on 30 March 2023 is in the sum of $37,734.92. In addition, Senior Counsel’s fees are as follows:
January/February 2022 preparation of matter for trial $19,800 14 – 18 February 2022 attendance upon hearing $33,000 14 – 18 February 2022 preparation of written submissions $13,200 12 August 2023 attendance upon further hearing $1,980 TOTAL $67,980
Even on the most generous assessment of the costs incurred by the applicant limited strictly to the reasonable confines of work done in relation to the 2022 hearing, the total fees including counsel fees almost equal the amount remaining in the Westpac account.
Whether either party to the proceedings has made an offer in writing to the other party
In Robinson & Higginbotham (1991) FLC 92-209 at 78,417 Nygh J considered the focus of s 117(2A)(f):
…when one looks at paragraph (f) it is quite clear that the purpose of that provision is to ensure that offers to settle, if made seriously, are considered seriously, to ensure that the costs of litigation is avoided, the workload of this court is lightened and one other consideration is certainly that a party with greater wealth is not placed in a position whereby he or she can wear out the other by simple attrition.
The terms of a settlement must be clear and be able to be given proper consideration. Offers should be seen in the context of the case.
Nygh J considered that a proper interpretation of s 117(2A)(f) of the Act does not exclude a consideration of offers reasonably made but subsequently withdrawn. If an offer is reasonable, then it should be given serious consideration.
The Court is required to consider the circumstances of each case and whether at the time that the offer was made the financial circumstances of the parties were such that the offeree was able to properly consider the merits of the offer.
The applicant’s affidavit sets out the history of offers exchanged between the parties. Whilst the history of offers passing between the parties commenced on 25 September 2018, no offer was predicated on the basis that the financial agreement was not binding and should be set aside.
On 6 May 2019, the applicant’s offer was that she receive a settlement sum of $650,000 (in addition to the $250,000 that the respondent had paid her on 31 December 2018), her personal superannuation entitlements and the retention of other assets. The applicant’s proposal was rejected and by offer made 31 October 2019, the respondent offered the following:
(1)That the applicant retain the $250,000 that she had received on 31 December 2018;
(2)That the applicant retain her personal superannuation entitlements;
(3)That the applicant retain her personal assets; and
(4)That the applicant be relieved from the various debts alleged by the respondent arising out of the children’s attendance at their school.
On 20 March 2020, the applicant proposed a settlement sum of $650,000, the retention of her personal superannuation entitlements, motor vehicle and other assets and that the parties enter into a Binding Child Support Agreement such that the respondent would be obliged to meet the costs of the children’s attendance at their school.
On 22 December 2020 the applicant offered to resolve matters on the following basis:
(1)That she receive a settlement sum of $695,000.
(2)That she receive a superannuation split in the sum of $200,000 from the respondent’s superannuation entitlements.
(3)That the parties retain their own superannuation entitlements, motor vehicles and other personal assets.
(4)That the parties bear their own costs of and incidental to the proceedings.
The offer made on 20 December 2020 was withdrawn on 10 March 2021 with a slightly revised offer that the applicant receive the sum of $695,000 from the sale of the former matrimonial home from funds held in the Westpac Bank Account.
Consequent upon the respondent filing an Amended Initiating Application on 31 May 2021, the applicant made the following offer:
(1)That she receive a settlement sum of $650,000.
(2)That each party retain their superannuation entitlements, motor vehicles and other personal assets.
(3)That neither party receive or be paid any spousal maintenance.
On 11 April 2022, the respondent made the following offer:
(1)That the applicant receives a settlement sum of $500,000, subject to $150,000 being assigned to a child maintenance trust.
(2)That each of the parties retain their personal superannuation and other property.
(3)That there be no spousal maintenance paid to either of the parties.
(4)That there would be no future child support payments paid by either of the parties.
Consequent upon judgment being delivered, on 1 August 2023 the applicant made the following offer:
(1)That she receives the sum of $741,634 (with the respondent to retain the balance of that account).
(2)That each of the parties retain their superannuation and other entitlements.
(3)That the respondent retain the entirety of any damages awarded to him from his claim against the second respondent.
(4)That there be no order for costs.
(5)That the parties enter into a Binding Child Support Agreement wherein periodic child support is reduced to nil, the respondent is to meet 100 per cent of the children’s education expenses, the applicant to contribute towards 50 per cent of private health insurance premiums for the children.
As matters have transpired, the determination of the Full Court in Daily & Daily [2024] FedCFamC1A 185 is such that the applicant is entitled to the settlement sum of $741,634 with each party to retain their entitlements and personal property without claim from the other.
The respondent’s solicitor acknowledged the applicant’s seventh offer but considers that it was not able to be accepted by the respondent because it contained a condition relating to child support.
Whilst the offer made on 8 April 2022 would have resulted in a significantly better outcome for the respondent particularly given the proceedings, I accept that it being forwarded via a text message was unsatisfactory.
Having said that, there is some uncertainty as to whether the offer was not accepted because of it being form and format or rather because of the terms were not acceptable to the respondent. It is noted that his response on 11 April 2022 was made soon thereafter.
I consider that the applicant’s offer of 1 August 2023 should have been given proper consideration by the respondent even though there was a reference to child support. The obvious response should have been to accept the applicant’s offer but without a resolution of child support issues generally or the need for the parties to enter into a Binding Child Support Agreement.
Any other relevant matters
As discussed, a consideration of other relevant matters is not confined by any of the restrictions in s 117(2A) (a) to (f).
In the circumstances of this case, the overarching consideration has been whether the financial agreement should be declared as binding as sought by the respondent or that it be set aside as sought by the applicant. The setting aside of the BFA was resisted by the respondent. He was unsuccessful in resisting the applicant’s orders for property settlement and as such I consider that sufficient circumstances exist for a cost order to be made in favour of the applicant.
The quantum of costs assessed in favour of the applicant is $105,569 however I bring to account the financial circumstances of each of the parties in the exercise of my discretion pursuant to s 105 of the Act. In those circumstances, I bring to account that the respondent has outstanding legal fees in the sum of $70,000.
I also have regard to the substantial legal fees of the applicant outstanding to her former solicitors. The amount remaining will assist the respondent in being able to pursue the balance of the litigation.
I make orders as appear at the commencement of these reasons.
I certify that the preceding ninety-two (92) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Berman. Associate:
Dated: 20 December 2024
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