Ferguson & Strickland
[2022] FedCFamC1F 516
Federal Circuit and Family Court of Australia
(DIVISION 1)
Ferguson & Strickland [2022] FedCFamC1F 516
File number(s): PAC 1229 of 2021 Judgment of: WILSON J Date of judgment: 21 July 2022 Catchwords: FAMILY LAW – NATIONAL ARBITRATION LIST – COSTS – application for costs – scale cost orders made. Legislation: Family Law Act (1975) Cth ss 75(2) and 117(2A)(c). Cases cited: Agosti & Agosti [2021] FedCFamC1F 72
Calderbank v Calderbank [1975] 3 All ER 333
Cutts v Head [1984] 1 All ER 597
Kyle & Kyle [2022] FedCFamC1F 251
Division: Division 1 First Instance Number of paragraphs: 20 Date of last submission/s: 11 July 2022 Date of hearing: On the papers Place: Melbourne Solicitor for the Applicant: Matthews Folbigg Pty Ltd Solicitor for the Respondent: Byron & Associates ORDERS
PAC 1229 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS FERGUSON
Applicant
AND: MR STRICKLAND
Respondent
order made by:
JUDGE
DATE OF ORDER:
21 JULY 2022
THE COURT ORDERS THAT:
1.The husband must pay the wife her costs in the scale amount of $21,590.57.
2.The wife’s solicitors must apply the sum of $18,318 from their trust account in satisfaction of costs ordered by these reasons.
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 the pseudonym Ferguson & Strickland has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
WILSON J
Following the making of the award in this proceeding on 17 March 2022, the wife has applied for an order that the husband pay her costs either in the sum of $36,674.74 on an indemnity basis or $21,590 on scale. The wife contends that s 117(2A)(c) of the Family Law Act has been engaged.
As these reasons explain, I agree that an order should be made that the husband pays the wife her costs in the scale amount of $21,590.
The arbitrator determined that the wife should receive 70% of the asset pool and that the husband should receive 30% of the asset pool, superannuation being treated as part of the overall pool of assets and not as a separate pool. In paragraph 89 of the arbitrator’s award, erroneously described as “this judgment”, the arbitrator pronounced that orders were made in accordance with the “minute”, also erroneously described by the phrase “the court orders” in accordance with paragraphs 1-14 of the arbitral award.
Throughout the arbitrator’s reasons,[1] the arbitrator was critical of the husband’s deficiencies in disclosure.
[1] For example, paragraphs 36-37 and 39-41.
The arbitrator determined that the parties’ total net assets including superannuation was $617,166. The arbitrator assessed contributions at 55% to the wife and 45% to the husband. In accordance with an agreement expressed to the arbitrator, pursuant to s 75(2) of the Family Law Act the arbitrator made a further adjustment of 15% in favour of the wife bringing the overall percentage adjustment to 70% in favour of the wife.
In pressing for a costs order, the wife contended that the husband’s conduct throughout this litigation had been such as to warrant making an order against him. She cited in support –
(a)failing to comply with orders previously made; and
(b)failing to diligently discharge the duties imposed on the husband in relation to disclosure.
The wife made two affidavits in support of her costs application, one on 28 April 2022 and the other on 11 July 2022. In her application in a case dated 28 April 2022 the wife sought costs in the sum of $26,566 and not indemnity costs so one wonders why the wife’s tender bundle included a schedule of costs assessed on an indemnity basis. Turning first to the wife’s 28 April 2022 affidavit, the following were the more significant matters to which the wife deposed when seeking an order for costs on two bases, namely –
(a)on 8 December 2021 being the date on which the arbitration was fixed for hearing the arbitration was adjourned because the husband had failed to disclose his shareholding in B Pty Ltd and his interest in a self-managed superannuation fund necessitating an adjournment and the subsequent issue of subpoenae; and
(b)the award was more favourable to the wife than were the terms of the wife’s offer to settle received 25 October 2021.
In the wife’s affidavit made 11 July 2022 she deposed to being unemployed when the arbitration was conducted although as at the date of her affidavit she deposed to working and earning up to $248 per week.
To my mind, the debate about whether the award represented a more favourable outcome to the wife than was the subject of her offer assumed greater importance in a consideration of costs than did the issue of the husband’s conduct. It is utile to first go to the offer dated 25 October 2021.
The offer was not expressed to have been made pursuant to decisions in Calderbank v Calderbank[2] or Cutts v Head.[3] It was not expressed to have been made without prejudice. That said, the solicitor for the wife in written submissions dated 11 July 2022 made no reference to authorities on a party bettering by the arbitral award the proposal earlier put by the offer, such offer either lapsing or being rejected. I examined the learning in detail in Agosti & Agosti[4] then in Kyle & Kyle.[5]
[2] [1975] 3 All ER 333.
[3] [1984] 1 All ER 597.
[4] [2021] FedCFamC1F 72.
[5] [2022] FedCFamC1F 251.
At all events, the 25 October 2021 proposal was in the following terms –
1.That the husband and the wife shall forthwith do all acts and things necessary to pay the net proceedings of sale –
a. As to the husband the sum of $50,000
b. As to the wife the then balance.
2.That each party retain for their sole benefit all right title and interest in all other assets, vehicles and monetary sums in their respective possession custody or control.
3.That each shall be solely responsible for all liabilities in their sole name.
4.That there be a superannuation split in favour of the wife as to the superannuation of the husband as to 60%.
We advise that this offer will remain open for acceptable for a period of 14 days.
No evidence existed to the effect that the husband responded to that offer within the 14 days stated or at all.
Turning next to the terms of the award when compared to the 25 October 2021 offer, paragraph 1(a) of the offer proposed payment to the husband of $50,000 from the proceeds of the sale of the Suburb C property. In the award, the husband was ordered to receive the lesser sum of $26,566. In other words, according to paragraph 1(a) of the proposal as contained in the 25 October 2021 offer, the husband would have been placed in a more advantageous position had he agreed to accept the payment to him of $50,000 as was proposed in the 25 October 2021 offer.
However, the 25 October 2021 proposal involved a second component, namely a splitting of superannuation as to 60% in favour of the wife. The award recorded that the wife sought 70% of the husband’s superannuation.[6] In other words, had the husband accepted the offer dated 25 October 2021, he would have been required to pay less to the wife in the form of a superannuation split.
[6] Paragraph 4 of the reasons for award.
As to both components of the 25 October 2021 offer, the husband would have been better off had he accepted the offer rather than proceeding to the arbitral hearing.
The wife addressed various other acts by the husband that she submitted supported the making of a costs order against him. Those included failing to comply with the filing directions, unilaterally putting the house for sale, failing to meet mortgage repayments and failing to pay a costs order for $550.
Each of those matters raised issues that may well have enlivened considerations going to a party’s conduct of the proceeding. The husband did not oppose any of the factual substratum which the wife submitted was applicable. However, having regard to my decision that the offer made 25 October 2021, had it been accepted, would have procured for the husband an outcome more advantageous than was the award, a jurisprudential basis under s 117(2A) exists to make an orders for costs under s 117(2) that deviates from the more usual order that each party bears his and her own costs under s 117(1).
As to the costs of the proceeding from 25 October 2021, in my view the wife should have her party/party costs in the sum of $21, 590.57.
In addition, the whole skirmish about costs was the subject of yet another proposal by the wife in which she offered to accept the sum of $10,000 to dispose of the costs application. She has ultimately succeeded in her claim to costs. The husband should have but failed to accept that offer as well. The offer was dated 2 May 2022. It lapsed by close of business on 4 May 2022.
The wife’s solicitor informed me that the sum of $18,318 remains in the trust account of the wife’s solicitors. That is insufficient to meet the totality of costs ordered. However that is the extent of funds available to meet the costs ordered. In those circumstances I order the wife’s solicitors to apply the sum of $18,318 from their trust account in satisfaction of costs ordered by these reasons.
I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wilson. Associate:
Dated: 21 July 2022
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