Gethings & Gethings

[2021] FedCFamC1F 320

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Gethings & Gethings [2021] FedCFamC1F 320

File number(s):

SYC 2564 of 2020

Judgment of:

WILSON J

Date of judgment:

17 December 2021

Catchwords:

FAMILY LAW – ARBITRATION – COSTS – costs ordered under s 117(1).

Legislation:

Family Law Act 1975 s 117

Cases cited:

Agosti & Agosti [2021] FedCFamC1F 72

Calderbank v Calderbank [1975] 3 All ER 333

Stewart v Atco Controls Pty Ltd (in liq) (2014) 252 CLR 307

Division:

Division 1 First Instance

Number of paragraphs:

15

Date of hearing:

1 December 2021  

Place:

Melbourne

Counsel for the Applicant:

Mr D. Dura

Solicitor for the Applicant:

Willis & Bowring Solicitors

Counsel for the Respondent:

Mr N. Ford

Solicitor for the Respondent:

Owen Hodge Solicitors

ORDERS

SYC 2564 of 2020
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:	MS GETHINGS Applicant
AND:	MR GETHINGS Respondent

ORDER MADE BY:	WILSON J
DATE OF ORDER:	17 DECEMBER 2021

THE COURT ORDERS THAT:

1.Each party bears his and her own costs including the costs of the arbitration in accordance with s 117(1) of the Family Law Act.

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 Gethings & Gethings is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

WILSON J

1. Following the publication of the arbitral award in this proceeding, registered by consent pursuant to my orders made 9 September 2021, the parties sought a determination in relation to costs.  The arbitrator made orders the effect of which was to alter the property interests of the parties as 50% each.  Prior to the publication of the arbitral award, the parties exchanged offers and counter offers of settlement.  The issue in this application is whether the arbitrator’s award was more favourable than the last iteration of the offeror’s settlement offer.

2. As is explained below, in my view, there is no reason for deviating from the costs provision found in s 117(1) of the Family Law Act.

   RELEVANT FACTUAL SETTING

3. By application in a case filed on 7 October 2021 the wife sought the following orders –

   1.That the Husband pay the Wife’s costs and disbursements incurred by her in the matter from 13 December 2018 assessed in accordance with the Family Court Scale.

   2.The Husband reimburse to the Wife half of the costs of the Arbitration.

   3.That the Husband pay the Wife’s costs of and incidental to this Application.

   4.To the extent that it is necessary, leave be granted to the Wife to file her Application out of time.  

4. In the arbitration, Ms Gethings, the wife, was the respondent.  In her affidavit made on 7 October 2021 in support of her costs application, the wife deposed to the following matters –

   (a)on 13 December 2018 the wife, through her solicitors, proposed settlement of the litigation on the basis that property interests were divided as to 54.5% to the husband and 45.5% to her;

   (b)that proposal either lapsed or it was rejected;

   (c)on 19 October 2020 the wife, through her solicitors proposed a resolution of the litigation on the basis that property interests were to be altered as to 50% each;

   (d)the 19 October 2020 proposal was expressed to remain open until 5 pm on 9 November 2020 after which time it would lapse;

   (e)the 19 October 2020 proposal lapsed;

   (f)on 28 July 2021 the wife, through her solicitors, proposed settlement on the basis that property interests were to be altered so that 55% of the assets went to the wife and 45% went to the husband;

   (g)that offer was expressed to be open until 5:00pm on 4 August 2021 after which time it would lapse; and

   (h)the 28 July 2021 offer was expressed to have been made pursuant to the principles enunciated in Calderbank v Calderbank.[1]

   [1] [1975] 3 All ER 333.

5. The arbitrator heard this case on 5 and 6 August 2021, final submissions being addressed on 6 August 2021 and the arbitrator published his award on 16 August 2021 with his customary exemplary speed and efficiency.

6. The husband sought orders for the dismissal of the wife’s costs application.  In addition, he sought orders that the wife pay his costs of defending the wife’s costs application.[2]  In opposing the wife’s costs application, the husband made an affidavit dated 29 October 2021.  To that affidavit the husband exhibited correspondence additional to the correspondence exhibited by the wife.  To more comprehensively record the exchange of correspondence on the subject of settlement proposals, in the passages below I have narrated the dates and details of each proposal, response and counter-proposal.  They unfolded as follows –

   [2] Paragraph 1 and 2 of the husband’s response to an application in a case filed on 29 October 2021.

   (a)first was the 13 December 2018 proposal from the wife which represented a division of assets corresponding to 55% to the wife and 45% to the husband;

   (b)in response was the husband’s solicitor’s proposal for the alteration of property interests on the basis of 62% to the husband and 38% to the wife by letter dated 11 July 2019;

   (c)then came the wife’s 19 October 2020 proposal (mentioned above) in which she proposed an alteration of property interests corresponding to 55% to the wife and 45% to the husband in the following terms –

   The percentage division that our client believes is appropriate, considering all of the contributions in a cohabitation of almost 22 years, is 45% to your client and 55% to our client, calculated on the basis that contributions during the marriage were equal and your client receiving an adjustment of 2.5% for his initial contributions.  Our client is of the view that the 75(2) factors should favour her to the extent of an adjustment of 7.5%, leading to the overall percentage division to be applied to the asset pool referred to above.

   (d)then followed the husband’s proposal by letter dated 12 November 2020 pursuant to which the husband put forward an alteration of property interests on the basis of 42.5% to the wife and 57.5% to the husband, the offer being expressed as made in accordance with Calderbank v Calderbank as well as Stewart v Atco Controls Pty Ltd (in liq);[3]

   (e)the husband’s proposal to the wife then followed dated 23 December 2020 which replicated his offer made on 12 November 2020;

   (f)the wife’s offer of 28 July 2021 (as aforementioned) next emerged pursuant to which the wife proposed property interests to be altered as to 55% to the wife and 45% to the husband; and

   (g)the husband’s 3 August 2021 proposal was the last by which the wife was to receive 45% and the husband to receive 55% by way of alternation of property interests.

   [3] (2014) 252 CLR 307.

   THE PARTIES’ SUBMISSIONS ON THE OFFERS

7. On behalf of the wife Mr Dura of counsel submitted that it was just in all of the circumstances to make a costs order under s 117(2) of the Family law Act and that the matters enumerated in s 117(2A) had been engaged, the most relevant of which was s 117(2A)(f).

8. Mr Dura narrated the evolution of the various offers which culminated in the final offer dated 28 July 2021 pursuant to which the wife offered to compromise this litigation upon receiving 55% by way of alteration of the parties’ property interests.  Mr Dura recognised that the arbitral award provided for a division of assets on an equal basis rather than on the basis of 55% to the wife.  Mr Dura submitted that when properly understood, the effect of the 28 July 2021 offer was an equal division of the parties’ property which, he contended, was precisely as the arbitrator ordered.  Mr Dura advanced a subsidiary consideration on costs, which was as follows –

   In the circumstances where the Wife has taken steps to resolve the proceedings, as far back as 13 December 2018, prior to the commencement of the proceedings by the Husband in 2020, and as each of the offers made by the Wife have been rejected by the Husband, the Court should exercise its discretion in finding that this factor alone warrants the making of an Order for costs as against the Husband.

9. The issue of Calderbank offers was the subject of my decision in Agosti & Agosti[4] which I brought to the parties’ attention and invited submissions from the parties about it.  Mr Dura addressed its application with particular reference to the wife’s 28 July 2021 offer submitting that the balance sheet propounded in that proposal was identical to the balance sheet adopted by the arbitrator.  Mr Dura submitted that from 13 December 2018 the wife had repeatedly put forward proposals to resolve this litigation which the husband either ignored or in respect of which the husband made unrealistic counterproposals which, Mr Dura said, should be factored into any examination of and decision about costs. 

   [4] [2021] FedCFamC1F 72.

10. Mr Ford of counsel for the husband advanced a collection of submissions in relation to costs which Mr Ford said did not point to costs being awarded in favour of the wife. So far as the terms of s 117(2A)(f) was concerned, Mr Ford recorded in percentage terms how each offer unfolded to reveal the following –

    (a)55/45 division on 13 December 2018;

    (b)38/62 division on 11 July 2019;

    (c)40/60 division on 15 November 2019;

    (d)55/45 division on 19 October 2020;

    (e)42.5/57.5 division on 12 November 2020;

    (f)42.5/57.5 (reversed division) on 23 December 2020;

    (g)55/45 division on 28 July 2021; and

    (h)45/55 (reversed division) on 3 August 2021.

11. Mr Ford contended that neither party postulated a resolution on the basis of a 50% division. Mr Ford challenged Mr Dura’s submission that in one offer, the effective proposal was a 50% division. Mr Ford submitted that the wife had failed to make out a case for a costs order being made under s 117(2) that deviated from the presumption as to costs reposed in s 117(1), namely that each party should bear his or her own costs.

12. In my view, a costs order under s 117(2) should not be made. The exchange of offers and count-offers was appropriate as well as consistent with the philosophy embedded in the Family Law Rules then in operation, to the effect that the parties should make genuine attempts to resolve their litigation.  I take the view that at no stage did the wife, in terms, propose a resolution on the basis that the parties should alter their property interests on a 50/50 basis, as the arbitrator found.  That was curious because the parties had no trouble at one time in offering then counter offering a division of such a precise percentage as 42.5/57.5 or at another stage of 45/55 in both directions.  Very sensibly, the arbitrator found in the middle at 50% each. 

13. I see no basis for deviating from the costs provisions found in s 117(1).

14. As for the debate about costs itself, that too will be ordered under s 117(1). This litigation must end. The arbitrator found that it was just and equitable to alter property interests on an equal basis. Costs must be borne individually, including the costs of the arbitrator.

15. I dismiss the wife’s application for costs of the proceeding and I dismiss the husband’s applications for costs in relation to the costs debate.

I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wilson.

Associate:

Dated:       17 December 2021