DANVERS & DANVERS (No.2)

[2018] FCCA 2547

FEDERAL CIRCUIT COURT OF AUSTRALIA

DANVERS & DANVERS (No.2) [2018] FCCA 2547

Catchwords:
FAMILY LAW – Applicant seeking costs - offers made prior to the hearing – whether it is appropriate to exercise discretion to make a costs order against a party – where the failure of a party to accept the offers was unreasonable – costs order made.

Legislation:

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

Applicant: MR DANVERS

Respondent: MS DANVERS

File Number: BRC 2053 of 2015

Judgment of: Judge Egan

Hearing date: 9 February 2018

Date of Last Submission: 9 February 2018

Delivered at: Brisbane

Delivered on: 9 February 2018

REPRESENTATION

Applicant: Self-represented

Respondent: Self-represented

IT IS ORDERED ON A FINAL BASIS:

1. That the wife pay to the husband such costs of and incidental to the property proceedings incurred by Mr Danvers from 4 February 2016 until the date of trial being 30 August 2016, such costs to be assessed in accordance with Schedule 1 of the Federal Circuit Court Rules 2001.

2. That the amount of such assessed costs are to be paid to the husband from the wife’s forty-five percent (45%) share of the net proceeds of sale of the Property A Property.

IT IS NOTED that publication of this judgment under the pseudonym Danvers & Danvers (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRC 2053 of 2015

MR DANVERS

Applicant

And

MS DANVERS

Respondent

REASONS FOR JUDGMENT

1. I have before me an application in a case filed 20 March 2017 by the applicant husband.  The applicant seeks payment of his legal costs.  The substance of his claim is as set out in his affidavit filed on 20 March 2017.  It is clear from that affidavit that the application relates to the question of resolution of property issues, which were in dispute between him and his former wife, and did not relate to parenting issues, which had been resolved as at August 2016.

2. Mr Danvers today confirmed that his application related to costs of the property proceedings, which he alleges were thrown away, because his former wife failed to accept an offer made by him prior to the court hearing on property on the basis that the orders ultimately made by Judge Baumann, as he then was, were not as favourable to the wife as offers which had been made by the husband prior to property proceedings being determined finally by his Honour.  The affidavit of the husband records that there were a number of offers made in an endeavour to settle the property issues between the parties.

3. Conveniently, those offers have been set out in correspondence from his lawyers, HopgoodGanim, to the lawyers for his former wife, namely, John Nagel & Co Lawyers.  Those letters from HopgoodGanim to Mr Nagel are annexed to his affidavit and are dated 4 February 2016, 19 April 2016, 9 August 2016 and 16 August 2016.  None of the offers put forward in each of those letters was ever accepted by the wife and the matter proceeded to trial on 30 August 2016 before Judge Baumann.

4. The offer contained in the letter from HopgoodGanim to John Nagel & Co dated 4 February 2016, relevantly, provided that Ms Danvers receive seventy-three per cent (73%) of the net proceeds of sale of the former matrimonial property situated at Property A.  There were other aspects to the offer, which did not substantially affect the entitlement of the wife to seventy-three per cent (73%) of the net proceeds of sale of the Property A property, a property which had been ascribed a value of $570,000 by his Honour Judge Baumann, and a property which was only encumbered to the extent of approximately $70,000.

5. The second offer, contained in the letter of 19 April 2016, was to the effect that the wife would receive seventy per cent (70%) of the net proceeds of sale of the Property A property.  The third offer contained in the letter from HopgoodGanim to John Nagel & Co dated 9 August 2016 was substantially better than the earlier two offers, in that such offer contemplated that Ms Danvers would receive seventy-five per cent (75%) of the sale proceeds from the Property A property, she would retain the benefit of a Motor Vehicle 1, and she would also receive one hundred percent (100%) of the husband’s superannuation entitlement, which was valued by his Honour Judge Baumann in the amount of $95,896.

6. In the fourth offer, conveyed by letter dated 16 August 2016 from HopgoodGanim to John Nagel & Co, it was proposed that property rights and interests be settled by payment to the wife of seventy-five percent (75%) of the net proceeds of sale of the Property A property, one half of the husband’s superannuation entitlement, as well as a partial property settlement of $25,000.  Each of the above offers were substantially better than what the wife received pursuant to the order of Judge Baumann made on 15 June 2017.

7. Relevantly, his Honour, in paragraph 3(d), set out the property pool, and in paragraph 4 ordered that the wife would be entitled to an amount of $348,752 based upon a 45 per cent share in the asset pool.  On the basis that the Property A property has a net value of $500,000, as would seem to be the case, then payment to the wife of the sum of $348,000 is about a sixty-five percent (65%) division in her favour in respect of such property.  As I have already set out, each of the offers made by the husband, through his solicitors, was better than such apportionment, even if one only takes into account the Property A property. In relation to the offers made on 9 August 2016 and 16 August 2016, the apportionment ordered by the court falls far below what was offered by the husband, through his solicitors.

8. When examining whether it is appropriate in the exercise of one’s discretion to make a costs order against any party to any proceeding, it is relevant to have regard to the factors set out in section 117(2A) of the Family Law Act 1795 (Cth).  I shall do so by reference to the following subparagraphs of such section:

   a)The asset pool, as found by his Honour Judge Baumann, was not extensive in terms of the number of assets or the amount of liabilities.  The parties’ respective financial positions were set out in financial statements which were filed in the proceedings, and demonstrated that each of them had their financial challenges.

   b)The husband is unemployed at the present time, and the wife is also not employed.  Had it been the case that the wife had accepted the husband’s offer back in February of 2016, then much cost, inconvenience and court time would have been spared.  She chose not to accept that offer, and costs have been thrown away as a result.  Her own financial circumstances, and the financial circumstances of the husband, have been adversely affected by her decision not to accept the early February 2016 offer.

   c)The husband, in making the offers referred to above, genuinely attempted to resolve the issues between the parties, without success.  He should be commended for having made the offers, albeit, that they were unsuccessful.

   d)Neither party was successful in the family property proceedings, which were tried by Judge Baumann.  The husband submitted that he ought to be entitled to a seventy-five percent (75%) apportionment of property and the wife submitted that she should obtain substantially more than a forty-five percent (45%) apportionment (as found by his Honour to be just and equitable).

   e)The offer made by the wife, through her solicitors, to HopgoodGanim by way of settlement, by letter dated 5 August 2016, required the transfer to the wife of the Property A property free from encumbrance, as well as other proposals for settlement, which substantially increased the amount of her proposal.

9. Both parties have informed me that the former matrimonial home situated at Property A has only recently been listed for sale.  I find that the failure on the part of the wife to accept the offers of settlement made by the husband was unreasonable, and that unnecessary costs have been incurred by the husband because of the wife’s intransigence in that regard.  The husband concedes that the amount of costs, as set out in his affidavit, totalling in excess of $100,000, cannot be recovered by him, because much of that related to parenting issues.  I’m not satisfied that I am in a position to make a fixed costs order in this matter.

I certify that the preceding nine (9) paragraphs are a true copy of the reasons for judgment of Judge Egan

Date: 21 September 2018