G and G
[2005] FCWA 6
•17 JANUARY 2005
JURISDICTION:
FAMILY COURT OF WESTERN AUSTRALIA
| ACT: | FAMILY LAW ACT 1975 |
| LOCATION: | PERTH |
| CITATION: | G and G [2005] FCWA 6 |
| CORAM: | THACKRAY J |
| HEARD: | 29 OCTOBER & 6 DECEMBER 2004 |
| DELIVERED: | 17 JANUARY 2005 |
| FILE NO/S: | PT 2131 of 2003 |
| BETWEEN: | G |
Applicant/Wife
AND
G
Respondent/Husband
Catchwords:
COSTS - offers of settlement - failure to make reasonable offer - failure to comply with order in interim proceedings - costs fixed to save expense of taxation
Legislation:
Family Law Act 1975, s 117(1), s 117(2A)
Category: Not Reportable
Representation:
Counsel:
| Applicant | : | Ms C Crawford |
| Respondent | : | Ms B Lane |
Solicitors:
| Applicant | : | Carr & Co |
| Respondent | : | O'Sullivan Davies |
Case(s) referred to in judgment(s):
Collins & Collins (1985) FLC 91-603
1 I am required to determine the wife’s application for costs.
Background
2 The proceedings commenced in April 2003 and proceeded to trial in July 2004. The Court was required to determine both financial and child welfare issues. The trial lasted for nine days. Judgment was delivered in October 2004.
3 Oral and written submissions were made in relation to the wife’s application for costs. I reserved my decision on 6 December
The law
4 S 117(1) of the Family Law Act 1975 provides that, subject to subsection (2), each party to proceedings shall bear his or her own costs. Subsection (2) provides that if the Court is of the opinion there are circumstances that justify doing so, the Court may, subject to subsection (2A), make such orders as to costs as it considers just.
| 5 | Subsection 117(2A) provides as follows: “In considering what order (if any) should be made under sub- section (2), the court shall have regard to-- (a) the financial circumstances of each of the parties to the proceedings; | |||||||
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(g) such other matters as the court considers relevant.”
6 The Full Court in Collins & Collins (1985) FLC 91 - 603 confirmed that the discretion conferred by s 117 is a broad one and that the factors contained in s 117(2A) are not to be read in a restrictive way.
7 I will now refer briefly to each of the factors.
Section 117(2A)(a)
8 The financial circumstances of the parties are set out in my judgment. As a result of my judgment, the wife received assets worth $383,486 and the husband received assets worth $255,657. Included in the assets, however, were legal fees added back of $36,500 for the husband and $42,254 for the wife. Legal fees outstanding were ignored in the assessment of the parties’ financial positions.
9 The husband has an earning capacity in excess of $105,000 per annum. The wife presently earns a little more than $20,000 per annum. In addition, however, she receives a part-pension and family allowance, together with a substantial payment of child support from the husband. These payments significantly reduce the disparity in their disposable incomes. However, the wife has greater expenses than the husband because she has to maintain not only herself but also K.
10 In his written submissions in opposition to the application for costs, the husband drew attention to the fact he had much more valuable assets than the wife at the commencement of cohabitation. He noted that the wife’s share of the assets increased significantly more than his share during the relationship. I regard that proposition as irrelevant in determining the issue of costs.
11 Neither of the parties could be described as wealthy. Although they have some assets, they are not of great value. The husband has a good income, but he has to pay a significant amount of child support.
12 I am not satisfied any disparity in the parties’ respective financial positions is a matter relevant to the issue of costs.
Section 117(2A)(b)
13 Neither party was in receipt of legal aid.
Section 117(2A)(c)
14 The wife places reliance on the refusal of the husband to allow her mother or sister to accompany her to the conciliation conference. Whilst I sympathise with the wife, I do not consider the husband’s actions were so unreasonable as to be taken into account in determining costs. The husband was well aware that the wife’s family was hostile towards him. He may have legitimately thought the prospects of a resolution of the matter were greater in their absence. Although the wife does have a serious disability, she is able to make herself understood and is able to take part in discussions without the involvement of an interpreter.
15 The wife also relies on the husband’s refusal to adjourn the conciliation conference in the face of the wife’s concerns about the state of readiness of the matter. As subsequent events showed, the proceedings were highly unlikely to have been resolved at the conciliation conference, regardless of the state of readiness. I do not consider the husband was unreasonable in requesting the conference date remain, particularly in light of the notorious delays in relisting of conferences.
16 Both parties (particularly the wife) are critical of the other party for the manner in which the proceedings were conducted, alleging inappropriate conduct in relation to valuation issues and disclosure of documents. Whilst I do not necessarily consider every aspect of the proceedings was conducted as it should have been, considered overall I was not satisfied the conduct of either party was such that it was appropriate to take into account in the determination of costs. I should also say the parties (and their advisors) are to be congratulated for ensuring so many issues, particularly valuation issues, were ultimately resolved without the Court being required to make any determination.
Section 117(2A)(d)
17 The wife seeks costs relating to interlocutory proceedings concerning the return of baby furniture and items used by K. The husband was ordered to return those items “reasonably required” by K. He returned a handful of items but retained many others. The wife then made another application for the return of further items. The husband then agreed to return numerous additional baby items. Although I found at trial that the wife had sufficient items for K “to get by”, I do not consider the husband by any means returned all of the items “reasonably required” by K.
18 The husband acknowledged at trial it was not appropriate for him to have acted as he did immediately following separation, when he removed K’s possessions from the home. He did not need the items he removed as he stored them at his sister’s place before putting them into a storage facility. I consider the husband’s failure to comply with the order requiring the return of items reasonably required by K to be a relevant consideration in determining the issue of costs of that part of the proceedings.
Section 117(2A)(e)
19 I am not satisfied either party was wholly unsuccessful. The orders I made in relation to child welfare issues more closely approximated the orders sought by the wife, but the husband obtained benefits pursuant to my judgment that were not offered to him by the wife. Nor was the husband entirely unsuccessful in relation to the financial proceedings. The wife sought a distribution of assets 70:30 in her favour, whereas the order of the Court was 10% more favourable to the husband.
Section 117(2A)(f)
20 The wife made three proposals for settlement, but essentially relied upon only two of them. On 5 May 2004 she proposed a division of assets 55:45 in her favour
and on 9 July 2004 (shortly before the trial) she filed an offer to divide the property equally. The order of the Court was that the property was to be divided 60:40 in favour of the wife. On a percentage basis, the wife therefore did significantly better at trial.
21 The husband made an offer of settlement on 2 September 2003 (withdrawn in October 2003), pursuant to which he would pay the wife $27,000 and allow her to have $30,000 from his superannuation entitlements. This was well below the amount the wife ultimately received ($100,000 cash and $106,635 from superannuation).
22 Although the wife did much better in percentage terms than she had offered to accept in her last two offers, the make-up of those offers needs to be considered. Pursuant to the offer of 5 May 2004, the wife would have received $140,000 cash and $50,000 superannuation. Pursuant to the offer of 9 July 2004, the wife would have received $133,000 cash and $40,000 superannuation.
23 It follows from the judgment that I consider on a percentage basis the wife’s last two proposals were generous to the husband. However, she wanted her settlement more heavily weighted towards cash, rather than taking superannuation, which was not going to be of any use to either party for a very long time. I nevertheless consider the offers of settlement are a relevant consideration because they demonstrate: -
(a)
a strong willingness on the part of the wife to compromise and;
(b)
a preparedness to accept a percentage of the property that would surely have been seen as being at the low end of the scale of likely outcomes.
24 On the other hand, the husband’s offer of settlement, in my view, was well outside the range of likely outcomes. Had he made a realistic counter-offer, in which he could have suggested a greater weighting of the wife’s settlement towards superannuation and a lesser proportion taken in cash, it may have been possible for the matter to be settled. However, in the face of an unrealistic offer (which was fairly promptly withdrawn), the wife was left with no alternative than to litigate her claim.
Section 117(2A)(g)
25 Counsel for the wife argued that the length of cross- examination of her client was not justified. She drew attention to the fact that the wife was cross-examined for about three days, whereas the husband was cross-examined for about half that time. However, there is much merit in the propositions advanced in response to this claim in paragraph 10 of the husband’s written submissions. In particular, the wife’s serious hearing disability slowed down the conduct of the cross-examination considerably.
26 Both parties were subjected to a painstaking cross- examination by the other party’s counsel. It may have been that counsel for the husband could have asked fewer questions than she did, but I am not satisfied the conduct the cross-examination was such that it would be appropriate to take that matter into account in determining costs. My impression was that both parties had a very keen eye for detail. Both counsel may have had legitimate concerns their clients would be critical if they did not pursue each and every matter in dispute.
Conclusion
27 I do not consider an order for costs in relation to the child welfare issues is warranted. Notwithstanding the criticisms I made of both parties, I am satisfied each parent was motivated by what they regarded as being in K’s best interests. Although the orders more closely approximated those sought by the wife, I did not consider the husband was unreasonable in making his application.
28 Insofar as property matters are concerned, I consider the husband should meet the wife’s costs associated with the enforcement of the order made on 1 May 2003 requiring him to return all items “reasonably required” for K. This involved the wife filing an Amended Form 3 on 10 June 2003 and an affidavit in support (see paragraphs 95 to 103 of the affidavit sworn 10 June 2003). It is noted also that the wife’s solicitors had to correspond with the husband’s solicitors seeking the return of the items. He did not take up the opportunity to agree to her proposals until after she commenced the enforcement proceedings.
29 Insofar as the substantive proceedings are concerned, the most significant factor in support of the wife’s application for costs was the increasingly reasonable offers of settlement made by her. The offer of 5 May 2004 would have resulted in her receiving $190,000 in cash and superannuation and the offer of 9 July 2004 would have resulted in her receiving $173,000 in cash and superannuation. As a result of the judgment of the Court, she received a total of $206,635. In considering the wife’s offers, I also take into account the husband’s failure to make a realistic offer of settlement.
30 Taking all of these matters into account, I consider the husband should pay the wife’s costs of the property settlement proceedings from 12 July 2004 (the time of the final offer) until the conclusion of the trial.
Quantum
31 Counsel for the wife strongly urged me to fix the costs, rather than requiring the costs to be taxed. Counsel for the husband disagreed. I accept the submissions of counsel for the wife that it is desirable for the matter to be brought to an end promptly, without all of the additional costs and aggravation associated with a taxation of costs.
32 Counsel for the wife provided a schedule of costs, which she conceded had not been prepared on the item basis set out in the scale. Instead it was prepared on an hourly basis. I accept the submission of Counsel for the wife that in all probability the costs would be greater than those shown on the schedule if calculated in accordance on the normal scale.
33 The schedule indicates that in the period from 12 July to 19 July 2004 the wife incurred costs of $1,372. During the course of the lengthy hearing, her solicitor’s costs were $2,619 and her barrister’s fees were $22,275. I consider all of these fees to be reasonable. I also note it is agreed approximately 25% of the costs were related to the financial issues.
35 I therefore propose to order the husband to pay the following
amounts:
(a)
$500 by way of contribution to the costs of the proceedings relating to the return of K’s items;
(b)
$6,500 by way of contribution to the costs of the financial proceedings.
Order
1. The husband shall contribute to the wife’s costs in the sum of $7,000 payable within 60 days.
I certify that the preceding [34] paragraphs are a true copy of the reasons
for
judgment delivered by this Honourable Court
Associate
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