Fancham & Ayrus (No 2)
[2023] FedCFamC2F 461
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fancham & Ayrus (No 2) [2023] FedCFamC2F 461
File number(s): DGC 3572 of 2019 Judgment of: JUDGE O'SHANNESSY Date of judgment: 21 April 2023 Catchwords: FAMILY LAW – property – costs application – heard in chambers – whether a costs order should be made – where husband had made offer to settle – where wife’s offer to settle was unrealistic – failure to disclose – part costs awarded to husband. Legislation: Family Law Act 1975 (Cth), s 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), r 12.13
Cases cited: Alston & Alston [2021] FedCFamC1A 96
Fancham & Ayrus [2022] FedCFamC2F 1431
Griffiths & Griffiths (No 2) [2022] FedCFamC1F 379
Pennisi & Pennisi (1997) FLC-92-774
Division: Division 2 Family Law Number of paragraphs: 47 Date of last submission/s: 20 February 2023 Date of hearing: Written submissions only Place: Melbourne Solicitor for the Applicant: Lardners Solicitors Solicitor for the Respondent: Guthrie & Associates ORDERS
DGC 3572 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR AYRUS
Applicant
AND: MS FANCHAM
Respondent
order made by:
JUDGE O'SHANNESSY
DATE OF ORDER:
21 April 2023
THE COURT ORDERS THAT:
1.From the Wife’s part or share of the proceeds of sale of the real property situate at and known as B Street, Suburb C in the State of Victoria, being the whole of the land more particularly described in Certificate of Title Volume … Folio …, at settlement, the Wife pay to the Husband on account of costs:
(a)The sum of $2,987 on account of the order of 31 August 2020;
(b)The sum of $15,101.75 on account of costs from 1 September 2020.
2.All applications be otherwise dismissed.
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).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish 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 Fancham & Ayrus (No 2) has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE O’SHANNESY
INTRODUCTION
The question I must decide in this matter is whether there should be an order for costs pursuant to section 117 of the Family Law Act 1975 (Cth) (‘the Act’) arising from the conclusion of the proceedings.
Having initially been listed as a two day matter, this matter was heard over five days, being 28 October 2020, 17 May 2021, 20 May 2021, 11 and 12 August 2022. On the first day of the Final Hearing, during the Wife’s cross-examination the Husband collapsed due to a medical crisis and was subsequently taken to hospital for emergency treatment by ambulance. First aid was administered by his counsel and following 45 minutes of CPR, the Husband underwent two surgeries. Following apparent stabilisation of the Husband’s health, the Final Hearing resumed over a number of days with closing submissions made by via written final submissions.
On 24 October 2022, I delivered my reasons (‘the first judgment’) as Fancham & Ayrus [2022] FedCFamC2F 1431 (not anonymised) and made final orders (‘the Final Orders’). These reasons should be read in conjunction with the first judgment. Although in dispute, I determined that the parties had cohabitated, off and on, from 2012 until December 2018, about 6 ½ years.
The Final Orders provided, amongst other things, for the back of the B street property (‘the Property’) to be sold within 60 days, being 23 December 2023. By agreement the parties organised the auction for February 2023. It is agreed that the property sold for $1,952,000, being some $552,000 higher than the value agreed and adopted at final hearing.
The Final Orders outlined that, after paying costs, commissions and expenses of the sale, reimbursement to the parties of any agreed moneys spent in preparing the Property for sale and discharging encumbrances on the property, the remaining funds from the sale of the property be were to be split as follows:
·Firstly, 47.67% to the Husband;
·Secondly, 52.33% to the Wife;
·Provided that from the Wife’s share the following be transferred to the Husband:
·$4,976.45 for the Wife’s part cost of the property valuations contained in Notation B of the Final Orders;
·A sum equal to any unpaid rates or outgoing of the B Street property incurred following 31 December 2018; and
·The sum required to discharge any caveat or other encumbrance lodged over the Property upon authority from the Wife.
COSTS APPLICATION
On 22 November 2022 the Husband filed an Application in a Case seeking that the Wife pay the Husband’s legal costs in the sum of $33,190.50, with such payment to be made contemporaneously with the distribution of the sale proceeds of the Property. The Husband sought that the Wife pay the costs of and incidental to the application in a proceeding filed 19 June 2020 in the sum of $2,987.00 which amount was included in the overall amount of $31,190.50.
On 12 December 2022 I made Orders in chambers for the Wife to file and serve any affidavit in support and/or written submissions by 14 January 2023 concerning the Husband’s application for costs. The Husband was to file and serve any written submissions in reply by 28 January 2023. I made an order that the application would be determined in chambers.
On 24 January 2023 the parties requested a change to the filing deadlines pursuant to the orders made 12 December 2022. Such change proposed meant that the Wife was to comply by 10 February 2023 and the Husband by 24 February 2023. In this email, solicitor for the Wife identified that the Property was to go to auction in February 2023 and “Counsel felt it was appropriate for that factual aspect of the matter to be crystalised in their submissions.” On this basis, I made further orders that day for the parties to file the further documents as they sensibly requested.
The Wife filed submissions on 13 February 2023. The Husband filed his submissions on 17 February 2023, but filed further submissions on 20 February 2023 having identified a drafting error. The Husband’s solicitors sought leave to rely on the amended submissions filed 20 February 2023 and I grant such leave. The parties did not seek to address me further and relied on the written submissions and, I infer, consented to my dealing with the matter in chambers on their written submissions.
APPLICABLE LAW
Pursuant to Rule 12.13 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (‘the Rules’) a party may apply, via an Application in a Proceeding, for an order that another person pay their costs, at any stage during proceedings or within 28 days after a final order is made. The Husband made his application on 22 November 2022, being 29 days after the Final Orders were made. Sensibly no point has been taken.
Costs in this matter are determined by application of section 117 of the Act, which reads as follows:
117 Costs
(1)Subject to subsection (2), subsections 45A(6) and 70NFB(1) and sections 117AA and 117AC, 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 opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A), (5) and (6) 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.
(Notations omitted)
Husband’s case
The context to the application is the whole of the reasons in the first judgment, but I refer to the following in particular:
23.Notwithstanding the claimed disparity of direct initial financial contribution (69/31), and before the gift from the Husband’s mother was taken into account, the Wife pressed that she should be regarded as contributing about 43% overall with a 5% adjustment pursuant to section 75(2). She argued that this would take account of a number of matters including the Husband’s likely inheritance from his deceased mother of about half of $875,000. The end result the Wife contended for was that overall she should receive 48% of the existing assets, the pool being all of the assets of both of the parties as at the time of hearing (but not including the Husband’s inheritance). The effect was said to be that the Wife would retain the former matrimonial home (agreed value at trial of $1,400,000) and pay to the Husband the sum of $67,000.
…
25.The Wife found it difficult to make any concession that she perceived would favour the Husband’s case. For example, about how the Husband had expended monies or superannuation or income that he brought into the relationship on either the front or back of the [B Street] property or of the other properties acquired. The Husband said this expenditure was corroborated by an examination of banking records. The Wife’s own examination of those banking records was some time before the trial, limited to a couple of hours, and I find not a detailed and careful examination necessary if a proper contradiction of the Husband’s assertions was to be made. I find the Wife failed to, or was slow to, concede the Husband’s work and expenditure on the various properties. This was not because his assertions were contradicted by her examination or knowledge of contemporaneous banking and other records, but because it appeared to her not to suit her case to make such concessions. This goes to the reliability of the Wife’s evidence.
…
113.Hence, in proportional terms the Wife’s initial contributions are about 22.55% and the Husband’s initial contributions about 77.45% of the parties’ initial and extraneous contributions.
…
117.Taking account of all of the parties contributions over the whole of the relationship and between separation and final hearing, I assess the Wife has having contributed in the proportion of 21% and the Husband is having contributed in the proportion 79%.
…
It was common ground that each party should retain his or her “keep” in the pool of about $3,000,000 and that the “swing” of the case was how the Property was to be divided. The Property had an agreed value of $1,200,000 at the state of the final hearing and of $1,400,000 by the end of the case after receipt of an updated valuation. The Wife’s case throughout was that she retain her “keep” and the whole of the Property, and make a modest payment to the Husband. At the start of the case she said the payment should be of a sum equivalent to 10% of the value of the Property, and by the end of the case a payment equivalent to about 5% of the value of the Property.
The Husband’s application for costs is based upon the following matters:
·Costs for the Husband’s Application in a Proceeding filed 19 June 2020 seeking disclosure and retrospective valuation orders heard on 31 August 2020, in which he said his application was wholly successful. Each party’s costs were fixed in the sum of $2,987.00 and reserved to the Final Hearing;
·A failure of the Wife to wholly comply with financial disclosure pursuant to the 31 August 2020 interim orders, causing the Husband, at his expense, to issue subpoenas to Commonwealth Bank, Westpac and ANZ bank to obtain information as to the Wife’s debts. Also he says, it caused him to have to issue a subpoena to the Wife’s judgment debt solicitor, and a subpoena to the Wife’s superannuation fund to obtain the Wife’s statutory declaration of financial hardship.
·The Husband’s Calderbank offer dated 28 August 2020 (‘the Husband’s first offer’). In this offer, the Husband was to transfer the Property to the Wife in return for a payment of $600,000 to the Husband. In the alternative, he offered that the Property be sold and the net proceeds be divided equally. At the agreed value of the property at that time of $1,200,000, that would have equated to a split of roughly $588,000 each, after a 2% adjustment for costs of the sale.
·The Husband’s written offer of settlement on 4 December 2020 (‘the Husband’s second offer’), made in the interregnum before the resumption of the final hearing (after the Husband had suffered a medical episode during the first day of hearing). That offer was for the Husband to transfer the Property to the Wife with a payment of $660,000 to the Husband, or alternatively, the Property be sold and the net proceeds be divided 55/45 in the Husband’s favour.
·These offers, he said, should be compared to the final orders where the Property was to be sold and the proceeds divided 52.33% to the Wife and 47.67% to the Husband.
The Husband’s evidence is that in response to his first offer, on 4 September 2020 the Wife countered by offering in writing to retain the Property in return for a payment to the Husband of $213,000 (‘the Wife’s offer’). This was equivalent to about 18% of the single expert value of the Property at that time. That was the only offer of settlement the Wife made. Also on 4 September 2020, the Wife filed an amended application seeking orders to retain the Property and pay the Husband the significantly lower amount of $114,722. On the third day of the Final Hearing, the Wife relied on an outline of case proposing to retain the Property and pay the Husband $66,910, about 5% of the single expert revised valuation of $1,400,000.
Ultimately I ordered that the Husband receive 47.67% and the Wife receive 52.33% of the remaining funds from the sale of the Property. The Husband argues that this division, applied to the initial valuation of the Property at $1,200,000 would have resulted in a payment to him of around $560,600, being roughly $12,000 shy of the alternative sale and split proposal of the first proposal in a pool of $3m to $3.5m. Further, the Husband argues that in the context of the total property pool, there is a 1.1% difference in the Husband’s first offer against the Final Order made.
The Husband set out his costs calculated on scale (not his actual costs) incurred since his first offer as follows:
Date Description Amount September-October 2020 Preparation for final hearing – 2 day matter $6,277.00 17 May, 20 May, 11 August, 12 August Preparation for final hearing – each additional hearing day after 2nd hearing day – 4 days @ $1,334: $5,336.00 27 October, 17 May, 20 May, 11 August, 12 August 2021 Daily hearing fee – for a full day hearing @ $2,357 with advocacy loading 50% 5 days @$3,535.50 per day $17,677.50 28 October 2020 Daily hearing fee – short mention @ $321 with advocacy loading 50% ie $481.50 $481.50 26 March 2021 Daily hearing fee – short mention @ $321 with advocacy loading 50% ie $481.50 $481.50 Plus costs sought pursuant to hearing on 31 August 2020 $2,987.00 Total $33,190.50 The calculation of those costs on scale was sensibly not disputed.
Wife’s case
In her response, the Wife sought that the Husband’s application be dismissed, and sought that each party bear their own costs.
The Wife’s case is that the circumstances of this case do not justify a departure from section 117(1) of the Act. The Wife relied on the authority of Griffiths & Griffiths (No 2) [2022] FedCFamC1F 379 (‘Griffiths’), specifically:
[20][i]t must not be overlooked that authority binding on me requires any cost order made in pursuance of s 117(2) upon demonstration of one of the matters in s 117(2A) to be just.
And also Pennisi & Pennisi (1997) FLC-92-774 (‘Pennisi’) at 85,547:
… it is not the law that an offer of greater or equivalent value to that which results from the Court will lead to an order for costs in favour of the offeror … We would also add that just because an offer is marginally less than the amount ordered by a Court does not mean that it is not a factor to be taken into account in determining whether costs should be awarded …
The plain words [of s 117(2A)(f)] do not limit a Court’s attention to offers which are greater than the amount awarded. Nor does the paragraph state what consequences flow from whether the offer is greater or lesser than the amount awarded, or how much that is the case. Words of limitation should not be imported into the provision and nor should it be read as though offers in proceedings under the Act carry the same consequences as payments into Court in common law matters.
We do however, consider that the closer the offer is to the award when the offer is under the amount awarded by the Court, the more weight that should be given to this factor in considering the question of costs. The principle must not, however, be rigidly applied. Offers must be seen in the context of the case and the extent of the offeree’s knowledge of the parties’ financial circumstances while the offer is live. In the family law jurisdiction, it is not uncommon to find relationships where one party, often the wife, has significantly less grasp of the parties’ financial arrangements, or the financial circumstances are so complex that it would be premature to accept an offer. There are also cases where the contents of the offer are in themselves the subject of disputed value and legitimate subject matter for determination. These and other features of the context of offers must be taken into account when considering whether it was reasonable or not to accept an offer, no matter how close to the ultimate result the offer may be.
Pennisi was cited with approval by the Full Court in Alston & Alston [2021] FedCFamC1A 96 (‘Alston’) at [101]. I adopt the observations of application of section 117 of the Act in Griffiths, Pennisi and Alston.
In the Wife’s written submissions filed 13 February 2023, the Wife argues that the terms of the Husband’s offers are relevant to the question of costs:
9.… the Wife submits that the specific features of those offers and the context in which they were made are important in any assessment of whether or not it was reasonable not to accept this offer. This is consistent with Pennisi & Pennisi … which notes the importance of taking into account the specific details of offers made, regardless of how close the offer may be to the ultimate result.
Husband’s offer – Wife to receive 50% of [the Property] sale proceeds
10.The Husband’s offer was made on Friday 28 August 2020 and was open until 9am on Monday 31 August 2020. The Husband clarified an error to a key term of the offer, namely the division of the [B] Street property sale proceeds in the event of a sale, at 4:59pm on Friday 28 August 2020. In other words, the Husband’s offer as first put remained open for a period of less than one business day. The Husband’s offer, as corrected, was not open to the Wife during business hours at all.
11.The Full Court in Alston & Alston [2021] FedCFamC1A 96 at paragraph 106 refers to a useful summary of the principles of Calderbank offers. In that context, “[t]he factors relevant to the question whether a rejection of an offer is unreasonable include whether the offeree had an adequate opportunity to enable it to consider and deal with the offer”. In putting an offer that lapsed within less than one business day, the Husband would have been well aware that he was not providing any adequate opportunity for the Wife to consider or deal with his offer, nor could she receive any meaningful legal advice in relation to his offer. The Wife submits that an offer put in those terms does not properly form the basis of an order for costs.
Hence the Wife argues that the Husband’s first offer cannot reasonably form the basis of a costs order given her limited opportunity to obtain legal advice in the very short time frame permitted under the offer. The offer was sent in the afternoon of Friday 28 August 2020, with a key clarification sent at 4:59pm on that day, and required a response by 9am on Monday 31 August 2020.
The Wife argues that in the Husband’s first proposal he proposed to retain the B Street property at a value of $650,000, despite the property being valued at $700,000. Similarly, she says that the Husband proposed to retain Property Q at a value of $50,000 despite being valued at $130,000. She argues that, given the Husband’s ‘keep’ was some $130,000 less than the single expert valuations, she did not consider the Husband’s first proposal as reasonable.
The Wife concedes that the Husband’s offers were only slightly less than the ultimate percentage split would have equated to considering the Property’s value of $1,200,000 in 2020. She adds:
17.… that given the quantum of the sale proceeds were not known to either party at the time the offer was open that this exercise is less relevant as it did not form part of the terms of the offer pursuant to s117(1)(f).
With respect to the Wife’s offer to retain the Property, she argues that this proposal was not put to the Husband in percentage terms and to do so now would not be consistent with section 117(1)(f) (offers in writing). She argues that the change in value of the Property means that the Husband’s failure to accept her offer does not constitute circumstances that would justify an order for costs, particularly as judgment represents a more favourable outcome for both parties than her offer.
The Wife further argues that the Husband’s second offer, made during the course of the Final Hearing, was made prior to the parties obtaining updated values of the parties’ real properties in May 2021, and was conditional upon her demonstrating that she had formal borrowing approval or sufficient funds to make the payment to the Husband (‘the condition’). She argues that such proposal was less favourable to the Wife than the Husband’s first proposal, and that in the event she could not demonstrate she could raise the payment, the Husband offered a 55/45 division in his favour of the sale proceeds of the Property. I ultimately found it was unrealistic for the Wife to attempt to raise a sum equivalent to 47.67% of the value of the Property and it had to be sold.
The Wife argues that both on a percentage basis and a dollar value basis, the judgment in this matter resulted in her receiving more of the pool than either offer put by the Husband. In the Wife’s written submissions, she submits a fair analogy with Griffiths:
34.In Griffiths & Griffiths (No 2) [2022] FedCFamC1F 379, the Court considered a costs application by the Husband against the Wife. A real property was sold for “$2,255,000, being almost half a million dollars more than the valuation of $1,760,000”. One basis for the Husband’s application for costs was that the arbitrator awarded 50% of the assets to the Wife, being less favourable than an offer he made for the Wife to receive 54% of the assets. The Wife disputed the Husband’s characterisation of the earlier offer and contended that it would have resulted in her receiving 49.4% of the net assets rather than 54%. The Court indicated that it did not consider the Wife’s conduct in the case (including in rejecting the Husband’s offer) “to be such as to deviate from the principle in s 117(1)” and “could not be properly described as unreasonable”.
The Wife argues that in those circumstances the context of the Husband’s offers outweigh a departure from section 117(1).
APPLICATION OF SECTION 117
Turning to section 117 of the Act, I must give weight to the starting position or default position that each party should bear his or her own costs and I do. I must consider, and I do consider, the matters under section 117(2A) of the Act. The following headings relate to those subsections listed under section 117(2A) of the Act.
The financial circumstances of each of the parties to the proceedings
Neither party argues that they will be considerably impacted by any costs orders, although the Wife argues that she would be more impacted given her current working status as earning less than the Husband.
Both parties are soon to receive a significant sum from the proceeds of sale of the Property, being substantially more than the valuation at final hearing. Both parties can afford the costs sought.
Legal aid
Neither party is in receipt of legal aid.
The conduct of the parties to the proceedings
I am satisfied that the Wife failed to provide financial disclosure as was required of her (see discussion below under “Husband’s interim application costs”) both prior to the disclosure orders of 31 August 2020 and after those orders were made. I am satisfied the Husband failed to make full and frank disclosure of all relevant information about his mother’s estate.
Whether the proceedings were necessitated by the failure to comply with an order of the court
The Husband argues that the Wife did not comply with disclosure obligations as ordered on 31 August 2020 (see discussion below under “Husband’s interim application costs”). The interim application leading to the 31 August 2020 orders was necessitated by the Wife’s failure to make timely full and frank disclosure.
Whether any party to the proceedings has been wholly unsuccessful in the proceedings
Neither party was wholly unsuccessful in the proceedings, in that the Wife received a property settlement. However it was always common ground she would receive a property settlement and the end result was far from the case pursued by the Wife.
Whether any party has made an offer in writing to settle the proceedings
The Husband made two offers, both of which contained elements that roughly aligned with the 47.67/52.33 split of the Final Orders. On the agreed value of the property at that time of $1,200,000, the Husband’s alternate offer would have equated to a split of roughly $646,000 to the Husband and $553,000 to the Wife. The primary proposal in the Husband’s second offer was $660,000. If the property had sold for the amount agreed in the final hearing, being $1,400,000, a 47.67/52.33 split would have seen a payment of approximately $654,400 to the Husband, only slightly less than the amount proposed in the Husband’s second offer.
However, the updated value was only ascertained in May 2021. If the 47.67/52.33 split was ordered with the $1,200,000 value of that time, the payment to the Husband would have been around $560,600, being $40,000 less than the Husband’s first offer and almost $100,000 less than the Husband’s second offer. I do not consider these offers to be far away from the outcome of the Final Orders.
I also consider the Husband’s conduct with regard to his first offer. The timeframe of reply was unreasonable. On 31 August 2020, the day the response was due from the Wife, the parties had a hearing on an application in a case filed by the Husband and so the Wife’s lawyers would have also been preparing for that hearing as well as considering that offer. However, it was open to the Wife to consider the Husbands offer in a timely manner and, if she chose, put his expired offer or a version of it back to him. The Wife was able to make her own offer a week later with the benefit of having the Husband’s offer the week before.
The fact that the Husband’s first offer included valuations of the B property and Property Q at $130,000 less than the single expert valuations, although relevant, is not determinative. The parties are entitled to disagree with a single expert. It is helpful if the process of how the offer was arrived at is shown in detail. But parties do not have to agree with how an offer is formulated. This is not a case of assets not being disclosed or not taken into account in an offer. An important aspect of an offer is the bottom line, the conclusion, the end result. The Husband’s offers were not unreasonable: they were in the ballpark.
The Wife made one offer, being the Wife’s offer discussed above, which I find was unreasonable and very wide of a reasonable or just and equitable outcome given the 6 ½ year relationship and the very disparate direct financial contributions of the parties.
Other matters relevant
The Property sold for $1,952,000 on or around February 2023. Minus costs of the sale, a 47.67/52.33 split would amount to approximately $930,500 to the Husband and $1,021,500 to the Wife before costs of sale. Both parties are in receipt of significantly more in dollars than they would have received on any of the three offers. Of the $552,000 additional amount earned by the sale over the agreed value of $1,400,000 at final hearing, the Husband will receive approximately $263,000.
Husband’s interim application costs
On 19 June 2020, the Husband filed an application in a proceeding seeking disclosure, property valuations and costs of that application. The Wife sought to dismiss that application and sought indemnity costs. The application was heard on 31 August 2020 before another Judge, where orders were made that largely adopted the Husband’s minute of orders sought as to disclosure and reserving costs to the final hearing, fixed at $2,987.
The Husband now seeks that figure be reimbursed to him by the Wife. He argues that he had written to the Wife seeking such disclosure and valuations by agreement in May 2020 and that he was “wholly successful” in obtaining such orders at the hearing.
The Wife argues that the reason the Husband’s interim application was disputed was that they were unnecessary and that similar orders for disclosure and valuations had already been made by consent on 10 December 2020. She also argues that on 31 August 2020, the Husband sought orders that the B street property be sold and it was not ordered, and hence “neither party was wholly successful”.
I find that neither party was wholly successful in that application. However, the Wife did not comply with her disclosure obligations as ordered in the earlier December 2019 orders. Further, her compliance with the August 2020 orders was such that the Husband had to issue subpoenas to several financial institutions in order to ascertain her financial records. It was necessary that the Husband sought such disclosure in an interim application. The documents and information should have been disclosed by the Wife. In these circumstances, the costs fixed and reserved of $2,987 should be paid to the Husband.
CONCLUSION
On the balance of the factors discussed above, I find that the Husband’s application for costs should succeed in part. I am satisfied that it is appropriate to depart from the starting position of no costs orders of section 117(1). The principle reasons are:
·Because the end result sought by the Husband, although a little ambitious, was not unreasonable;
·The second offer of the Husband was very close to result or the percentage determined;
·The Wife’s one offer was unrealistic;
·The result the Wife sought was, at all times, unrealistic given the clear evidence of the amount to the Husband’s direct financial contributions and the length of the relationship;
·Costs are compensatory;
·The Husband did not provide the entire or full story about the issue of the grant of probate relating to his mother’s estate (that arose after final separation). It was necessary for the Wife to call the Husband’s sister as a witness and provide the emails to get to the bottom of that. The requirement of full and frank disclosure of all relevant financial information is a fundamental and foundational requirement for the division of property of married or de facto couples. Because of the manner in which the Husband disclosed information about the estate and failed to disclose his real attitude to concluding the administration of the estate, in the exercise of my discretion, I am not prepared to grant all of the cost sought.
In all of the circumstances it is appropriate that one half of the costs of the proceeding sought be made to the Husband (calculated as $33,190.50 less $2,987 being $30,203.50 at 50% is $15,101.75). Hence I will order that from the Wife’s part or share of the proceeds of sale of the Property at settlement, the Wife pay to the Husband on account of costs;
(a)The sum of $2,987 on account of the order of 31 August 2020;
(b)The sum of $15,101.75 on account of costs from 1 September 2020.
Those are my reasons.
I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment of Judge O'Shannessy. Associate:
Dated: 21 April 2023
0
3
0