F and F (No.2)
[2004] FMCAfam 290
•29 June 2004
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| F & F (No.2) | [2004] FMCAfam 290 |
| FAMILY LAW – COSTS – Application for a costs order following property proceedings – financial circumstances of the parties, the conduct of proceedings by the wife and settlement offers by the parties considered – the wife did not conduct the proceedings improperly and did no worse than the best offer made by the husband – application for costs refused. |
Family Law Act 1975 (Cth), ss.117, 117AA, 118
F & F – Property settlement [2004] FMCAfam 75
| Applicant: | KJF |
| Respondent: | VEF |
| File No: | PAM981 of 2002 |
| Delivered on: | 29 June 2004 |
| Delivered at: | Sydney |
| Hearing date: Date last submissions received: | No oral hearing 28 June 2004 |
| Judgment of: | Driver FM |
REPRESENTATION
| Solicitors for the Applicant: | Mr T Reeve |
| Counsel for the Respondent: | Mr D Roberts |
| Solicitors for the Respondent: | Richardson Burgin Steer |
ORDERS
The application for costs is dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PARRAMATTA |
PAM981 of 2002
| KJF |
Applicant
And
| VEF |
Respondent
REASONS FOR JUDGMENT
Introduction and background
On 1 April 2004 I gave judgment in the principal proceedings between these parties: F & F – Property settlement [2004] FMCAfam 75. I made orders for an adjustment of property interests between the applicant husband and the respondent wife. On 20 April 2004 correspondence dated 19 April 2004 from the applicant husband’s solicitors was received in the Parramatta registry of the Family Court of Australia. I note that another copy of the letter was received in the New South Wales District Registry of the Federal Court on 1 June 2004. That copy is dated 15 March 2004, however neither copy of the letter came to my attention until the husband’s solicitors wrote to my associate about it on 28 May 2004.
The correspondence amounts to an application for costs arising out of my earlier judgment. On 7 June 2004 my associate, by letter, advised the legal representatives of the parties that I would consider the application without a further oral hearing and give judgment on it. Written submissions on behalf of the wife were filed in my chambers on 28 June 2004.
Consideration
The applicant husband bases his costs application upon s.117 of the Family Law Act 1975 (Cth) (“the Family Law Act”), settlement offers made by him and by the respondent wife and the conduct of the proceedings on behalf of the wife. Section 117(1) of the Act provides that subject to sub-section (2) and ss.117AA and 118, each party to proceedings under the Act bears his or her own costs. Sections 117AA and 118 are not presently relevant. Section 117(2) empowers the Court to make a costs order in some circumstances. Section 117(2A) sets out a number of matters relevant to a consideration of whether a costs order should be made. These include the financial circumstances of the parties, the conduct of the parties to the proceedings in relation to the proceedings and whether either party has, in accordance with s.117C or otherwise, made an offer in writing to the other party in the proceedings to settle the proceedings and the terms of any such offer.
As to the financial circumstances of the party, it is apparent from my earlier decision that neither party is impecunious. The income of the husband is rather greater than that of the wife. However, both have access to reasonable financial resources.
I do not accept that the conduct of the proceedings by the wife merits a costs order. The wife did not conduct the proceedings improperly. It is correct, as is pointed out on behalf of the husband, that there was a lack of attention to detail in the wife’s financial statement. This is lamentably common. I did not consider that the wife’s lack of full and frank disclosure was so serious as to merit special comment in my principal judgment and I do not consider it so serious as to merit a costs award against her.
The settlement offers made by the husband and the wife are relevant. On 12 July 2002 the husband offered to pay the wife $310,000 in return for the transfer of her interest in the former matrimonial home. On 4 August 2003 the husband offered to settle the matter on the basis of the sale of the former matrimonial home with an assumed sale price of $805,000 and a division of the net proceeds of sale, 65 per cent to the wife and 35 per cent to the husband. On 25 August 2003 the wife offered to settle the proceedings on the basis of the sale of the former matrimonial home with the wife to receive 75 per cent of the net proceeds of sale and the husband to receive 25 per cent. I note that the wife had made an earlier offer, on 24 April 2003, to settle for 60 per cent of the net sale proceeds of the home and 50 per cent of the accumulated superannuation of the parties.
The outcome of the proceedings before me was that I ordered the sale of the former matrimonial home with the net proceeds to be divided 55 per cent to the wife and the balance to the husband. However, I also ordered a division of the husband’s superannuation. In that judgment I noted that the wife had filed an amended response on 19 February 2004 and stated that the outcome of the judgment was that the wife had achieved an outcome more favourable than that sought in the amended response. As is now pointed out on behalf of the husband and the wife, that statement by me reflected a misreading of paragraph 8 of the amended response. I accept that it was probably incorrect for me to say that the wife had done better than the result sought in her amended response. However, that error does not have any particular impact upon my principal judgment and I do not think it has any significance in relation to costs, provided that the wife did no worse than the offers made by the husband.
I do not understand it to be suggested on behalf of the husband that the wife had done worse than his first offer. The second offer was more generous than the first offer. The husband’s solicitors calculate the value of the first offer at $481,000 (65 per cent of $805,000, less $65,000 due under the mortgage). In my judgment, I attached a dollar value to the wife’s share of the net proceeds of the sale of the former matrimonial home, following sale expenses of $15,000 at approximately $400,000. The husband had made no allowance for sale expenses in the valuation of his second offer. In addition, I made a splitting order in respect of the husband’s superannuation using a base amount of $86,500. It follows, in my view, that the wife has done no worse than she would have done had she accepted the husband’s second offer.
The husband submits that the wife would have been better off had she accepted his second offer because the result would have been achieved earlier and she would have received the whole of her entitlement in cash rather than in deferred superannuation. He submits that she would also have saved legal costs thrown away. I do not think that the third argument adds anything to the first. Obviously, if the matter had been settled prior to a hearing, legal costs would have been saved. However, I do not regard that as a sufficient basis for a costs award in circumstances where in dollar terms the wife has achieved an outcome no worse than the offer made. Further, I do not accept that the wife would have been better off by receiving a cash outcome rather than a benefit in future superannuation payments. As I observed in my principal judgment, at paragraph 33, the wife will need income in her retirement. A share of a future indexed pension in retirement is, in my view, potentially of more value than a cash payment now when the wife already enjoys a reasonable income and access to substantial cash resources.
In my view, the basis for a costs order has not been established. I will therefore dismiss the husband’s application.
I certify that the preceding ten (10) paragraphs are a true copy of the reasons for judgment of Driver FM
Associate:
Date: 29 June 2004
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