Gaspaldi and Gaspaldi

[2007] FamCA 342

FAMILY COURT OF AUSTRALIA

GASPALDI & GASPALDI [2007] FamCA 342

FAMILY LAW - COSTS – Offer of Settlement made by the wife on 1 July 2004 which provided her with approximately the same amount as received in the final division of property in November 2006 – Interaction between s 117(2A)(f) and s 117C - Husband to pay wife’s costs of proceedings since 1 July 2004

Family Law Act 1975

Brown v Green (2002) FLC ¶93-115

APPLICANT: MR GASPALDI

RESPONDENT: MRS GASPALDI

FILE NUMBER: CAF 80 of 2004

DATE DELIVERED: 5 March 2007

PLACE DELIVERED: Canberra

JUDGMENT OF: Faulks DCJ

HEARING DATE: 5 March 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Gill

SOLICITOR FOR THE APPLICANT: Dobinson Davey Lawyers

SOLICITOR FOR THE RESPONDENT: Ms Gesini of Farrar, Gesini and Dunn

Orders

1. The husband will pay the wife’s costs of and incidental to the property proceedings between the parties as and from 1 July 2004 to be agreed or taxed.

2. The application about stay of the payment of matters under the property orders is adjourned to 10 am on 22 March 2007. I give leave to make an oral application in relation to a stay in respect of the costs order which is also adjourned to 22 March 2007 at 10 am.

3. Any additional material on which the husband seeks to rely in his application for a stay will be filed on or before noon on 15 March 2007. 

4. It is noted that the wife in response may not be able to provide significant notice to the husband of any material in reply to that material filed by him by 15 March 2007 as aforesaid.

5. I reserve the costs of today.

IT IS NOTED IN CONNEXION WITH THESE ORDERS that the judgment of the Honourable Deputy Chief Justice Faulks delivered this day will for all publication and reporting purposes be referred to as Gaspaldi v Gaspaldi.

FAMILY COURT OF AUSTRALIA AT CANBERRA

FILE NUMBER: CAF 80 of 2004

MR GASPALDI

Applicant

And

MRS GASPALDI

Respondent

REASONS FOR JUDGMENT

1. In relation to the question of costs, the application before me is that of the wife, who, along with the husband, is the beneficiary of orders made by me on 29 November 2006. As a consequence of those orders, the husband was ordered to pay to her the sum of $350,000. In this regard the wife’s application in relation to costs seeks to overcome the primary prescription set out in s 117 of the Family Law Act 1975 (the ‘Act’) that each party will bear his or her own costs. It is suggested that I should make an order under s 117(2A) because of one particular matter, that is, and I quote:

   (f)   whether either party to the proceedings has made an offer in writing to the other party in the proceedings to settle the proceedings and the terms of any such offer.

2. It was asserted during the course of the wife’s application that she had made an offer of settlement in these proceedings which was in terms that the husband pay her $350,000.  That offer was made according to the letter which is Annexure A to her affidavit in support of her application on 1 July 2004. 

3. The husband says in these proceedings that notwithstanding the apparent coincidence of the offer to settle and the final result, that I should first look to the terms of the offer and note that it did not include, on the wife’s part, a proposal that the loans for the ANZ Bank and the loan to her parents should be the subject of an indemnity by her.  These totalled about $40,000 and were in her name alone.  In my opinion this objection, as I indicated to Counsel, is spurious.  The loans were in her name - there is no reason for her to indicate that she had given indemnity in relation thereto.  It could not reasonably be asserted that the husband misunderstood the nature of the offer in this regard, and in any event as it will be apparent when I refer to other matters, he made no attempt (and it is confirmed by his own Counsel), to clarify the offer or to seek to make a counter-offer which could have included the proposition that those matters should be the subject of an indemnity.  I reject that argument.

4. Second, I was referred to Brown v Green (2002) FLC ¶93-115 at paragraph [57]. I was referred to the following statement by their Honours in the Full Court:

   We think that whilst s 117(2A) does not provide any direct guidance to where weight should be given in any one particular case, it is very important for the Court to give proper consideration to written offers of settlement that have been made.  The insertion of s 117C into the legislation is a clear indication of the desire of Parliament to enable parties to avoid unnecessary litigation by indicating to the other party an appropriate basis upon which litigation can be settled. 

5. Although that part was not highlighted in the copy of the case that was handed up to me by Counsel in my opinion, the following is significant.  The paragraph goes on to read:

   The failure to heed a reasonable offer in circumstances where there is an adequate knowledge of the parties at the time the offer was made to give it a proper consideration, is something to which very significant weight indeed ought normally to be given.  It is clearly a circumstance that would justify the making of an order for costs in favour of the husband.

6. The importance of the insertion of s 117C into the Act and the requirement that if a written offer is made to settle the proceedings it should be taken into account in determining offers of cost is demonstrated by the case of Brown v Green (supra) to which I referred.  It suggests that parties should have an opportunity to avoid unnecessary litigation by indicating to the other party an appropriate basis on which litigation can be settled. 

7. It is asserted on behalf of the husband in this matter that he was unaware that the basis of settlement because he had put forward, in the course of conciliation proceedings, a different value for some of the items in the pool of property – different that is from that which was found by me in the course of the hearing.

8. In my opinion, if a party is given by the other party, a basis upon which litigation can be settled and he or she is uncertain or unwilling to settle on that basis but is willing to settle on a similar or roughly approximate basis, then he or she has an obligation properly to respond to the offer in a sensible way.  To suggest that simply because the values that are attributed to items as they are finally found is different from the values as he or she knew them at the time is, in my opinion, a spurious attempt to find a way of moving away from the fact that an offer was made to settle long before the matter came on for hearing. 

9. In my opinion this ground also fails.  I add that in my opinion, if there was any doubt in the mind of the husband as to the value of the offer then it was up to him to seek to clarify, and up to him to put a counter-offer.  Neither of these he did.  In addition, I point out that it is not agreed that the items, and their consideration as the conciliation conference were the same as in the document handed up to me in the course of evidence in these proceedings. 

10. It was further asserted on behalf of the husband in these proceedings to modify the offer for settlement that this was made at a time where there were children’s issues to be resolved. In this regard the children’s issues were then at large and were not resolved for about a year afterwards.  Initially, the husband sought that the children live with each of the parties on an equal basis as to time, in other words, week and week about.  The final order made and agreed between the parties about a year after this offer was made, was in similar terms.

11. In my judgment I declined to make any adjustment to the provision of property between the parties as a result of the where the children live because it seemed to me that it was inappropriate to do so, given the way in which the parties had quite properly agreed that their time should be spent.  Those matters alone would seem to put to an end to any reasonable claim by the husband to oppose the order for costs. However, it should be said that when the offer was made the wife’s application to the Court was that the children would live primarily with her. 

12. Hence perhaps could be said that the husband might have assessed the offer from the wife on the basis that the wife was perhaps inflating her potential share of the proceedings because the children might have made a difference in her favour in the final division of property (if the Court were to make an order that was consistent with what she had been asking the Court to make).  However, again, even if this were so, it was open to the husband to clarify the terms of the offer and he did not do so.  In my opinion that objection also fails.

13. I was also drawn to the circumstances of the parties post-separation and post‑judgment more importantly.  In this regard I was directed to material that had been filed by the husband in support of his application coincident to this application that there should be a stay in the payment of the balance of the money due under the judgment appending the resolution of the appeal against the orders that were made. 

14. I summarise without attempting to do justice to the more complicated nature of the submissions made on behalf of the husband that the effect of the husband’s having to pay out the appropriate [judgment ordered] additional sum to the wife (to that which she has already paid) would be to preclude him from engaging in his current share or option trading activities as he wants to do.

15. It appears, although it is not clear to me from the evidence before me, that his payment out of this sum of money from those assets presently available to him, or which could reasonably be liquidated, would reduce his net liquid worth below a figure of $500,000 which he asserts is necessary to enable him to engage in trading naked call options, naked put options and naked “collars”.  These, it is asserted, constitute a major part of his activities which produce, he says, an income of about $50,000 a year.

16. I have been asked to adjourn the proceedings in relation to this aspect of the share trading for some time, however, in relation to the question of costs it seems to me that the argument advanced in relation to this is not in any way prohibitive of an order for costs, nor does it suggest, in that he should not otherwise meet his commitment for costs.  Ultimately if he has to liquidate his house, he liquidates his house – if that is what is necessary to achieve the division that is required.

17. It may be of course that he succeeds on appeal and there is a difference in the overall division of property and a different result is achieved.  However, in the circumstances as they exist, it seems to me that none of the reasons so far advanced would cause me to move from the acceptance of the proposition of the offer to settle for a figure or for better than a figure that was finally awarded in judgment should provide an order for costs in favour of the wife.

18. Finally it was suggested that there was a discrepancy in the judgment between the amount involved in the trust account and the amount involved in some of the assets in the sense that there was a double-counting.

19. It is asserted, that money that had been in the trust account, was otherwise in the asset pool of the parties.  It appears that if this was so and I pass no comment as the matter is subject to appeal, then the difference would be that the pool of property was increased by a total of $30,000 or thereabouts of which the wife's share would be about $10,000.  In my opinion, the difference occasioned by this would not cause me to change my view that the husband should pay the wife's costs.

20. In my opinion, irrespective of whether the offer to settle was for $10,000 more than the final figure or for the final figure itself is, in the circumstances of this matter, irrelevant.  In my opinion, the husband should pay the wife’s costs of and from the offer of settlement which is 1 July 2004.

I certify that the preceding twenty (20) paragraphs are a true copy of the reasons for judgment of the Honourable Deputy Chief Justice Faulks

Associate: 

Date: