Greyson & Maher (No 2)

Case [2023] FedCFamC1F 34

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Greyson & Maher (No 2) [2023] FedCFamC1F 34

File number(s): MLC 14284 of 2020
Judgment of: MCNAB J
Date of judgment: 7 February 2023
Catchwords: FAMILY LAW – PROPERTY – Costs Application – Application for Indemnity Costs – Application for indemnity costs dismissed – Effect of Calderbank offers – Conduct of the applicant in denying the length of a de facto relationship until the day of trial – Failure to make timely disclosure of assets – Party-Party costs in a fixed sum ordered.
Legislation:

 Family Law Act 1975 (Cth) s117

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 4.2.2, 12.08, 12.13, 12.17

Cases cited:

 Bashour v Australia and New Zealand Banking Group Limited [2017] FCA 163

Bele & Vaughan (Costs) [2012] FamCAFC 198

Browne & Green [2002] FamCA 791

Calderbank v Calderbank [1975] 3 All ER 333

Fleming v Fleming (Review of Costs) [2009] FamCA 552

Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435

I, In the Marriage of (No 2) (1995) FLC 92-625

Kannis v Kannis [2002] FamCA 1150

Magna Alloys & Research Pty Ltd v Coffey (No 2) [1982] VR 97

Medlon & Medlon (No 6) (2015) 54 Fam LR 1

Prantage & Prantage [2013] FamCAFC 105

Redmond & Redmond (Costs) [2014] FamCAFC 55

Taronite v Mabra (Costs) [2017] FCWA 72
Division: Division 1 First Instance
Date of hearing: On the Papers
Place: Melbourne
Number of paragraphs: 38
Date of last submission/s: 23 December 2022
Counsel for the Applicant: Mr Puckey KC
Solicitor for the Applicant: Taussig Cherrie Fildes
Counsel for the Respondent: Dr Ingleby
Solicitor for the Respondent: Sage family Lawyers

ORDERS

MLC 14284 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MR GREYSON

Applicant
AND:

MS MAHER

Respondent

order made by:

MCNAB J

DATE OF ORDER:

7 FEBRUARY 2023

THE COURT ORDERS THAT:

1.Within one hundred and eighty (180) days of the date of this order, the respondent pay the applicant a lump sum of costs fixed at SEVENTY-FIVE THOUSAND DOLLARS ($75,000).

2.That the applicant’s application that the respondent pay costs on an indemnity basis is 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 the pseudonym Greyson & Maher has been approved pursuant to s 121(9)(g) of the

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AGLC
Greyson & Maher (No 2) [2023] FedCFamC1F 34
Case
[2023] FedCFamC1F 34
Decision Date

CaseChat Overview and Summary

The case involves an application for costs by the applicant, Greyson, against the respondent, Maher. The matter concerns the division of property following the breakdown of their de facto relationship. The primary dispute is over the equitable distribution of the property located at B Street, Suburb C, and the financial implications for both parties. The case was heard in the Family Court of Australia.

The legal issues the court had to address included whether the court should award indemnity costs to the applicant based on the principles outlined in section 117(2) of the Family Law Act 1975 and Rule 12.17(1)(b) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021. The court had to consider the conduct of both parties, their financial circumstances, and the various offers of settlement made during the proceedings. Specifically, the court had to determine if the respondent's refusal to seriously consider the applicant's proposals for an equal division of the property, and the subsequent outcome of the trial, justified awarding indemnity costs to the applicant.

The court found that while the applicant's position from the outset was for an equal division of the B Street property and the orders made reflected the applicant's initiating application, the circumstances did not justify awarding indemnity costs to the applicant. The court noted that the applicant had not provided an itemised accounting of his costs or a copy of any cost agreement, which were necessary for the court to properly assess the costs. Furthermore, the court considered the financial circumstances of the respondent, who had limited income and faced the prospect of homelessness if required to pay indemnity costs. The court also took into account that the proceedings were relatively straightforward, with no significant interlocutory applications or disputes over the value of the property. Therefore, the court concluded that the circumstances did not warrant an award of indemnity costs.

In conclusion, the court refused to make an order that the respondent pay the applicant's costs on an indemnity basis, finding that the circumstances did not justify such an award. The court's decision was based on the lack of detailed cost information provided by the applicant, the financial hardship it would cause the respondent, and the relatively straightforward nature of the proceedings.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

The orders reserved costs and made provision for the parties to file submissions regarding costs and for the matter to be determined on the papers. JUDGMENT The matter was listed for 27 October 2022 and ran for two days. Reasons for judgment was delivered on 28 November 2022 with the applicant to receive 50% of the B Street, Suburb C property, with the parties to draft a minute of orders with a mechanism giving effect to that order. Final orders were made on 1 December 2022. The respondent had the option of adhering to the order through: (1)Paying the applicant a sum of $1,100,000, either through sale of the property or otherwise, which is equivalent to 50% of the value of that property; or(2)Transfer the property to the de facto husband and he pay her $1,100,000. These orders were made in circumstances where the applicant was seeking an equal division of the property from the outset of the matter, while the respondent initially sought no adjustment, with the affect that she retain the B Street property in her sole name, and at the time of trial the respondent sought a further payment of approximately $700,000 in her favour. The judgment determined and the final orders operated on the basis that the B Street property was the only property of the relationship. On 23 December 2022, the respondent emailed the applicant and the court to notify that she had secured finance in order to pay the applicant $1,100,000 without selling the B Street property. APPLICATION FOR COSTS The applicant seeks an order that the respondent pay his costs of $368,761.59, being his actual costs incurred from 23 December 2020 to the conclusion of the trial, excluding costs relating to this application. The applicant sets out the relevant principles relating to a cost application, stating that an award for indemnity costs may be made per s 117 (2) of the Family Law Act 1975 (Cth) (“the Act”), and Rule 12.17 (1)(b) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Rules”). The applicant does not include an itemised accounting of his costs, nor does he provide a copy of any cost agreement. The applicant submits that the court ought to consider awarding costs on an indemnity basis on the following grounds:(1)Both parties have substantial assets to use as a resource as a result of the court’s orders;(2)The applicant’s position from the outset was for an equal division of B Street, and the respondent refused to seriously consider the proposal;(3)The orders made reflect the orders sought by the applicant in his Initiating Application;(4)The applicant submits that a number of offers of settlement were made, all of which proposed to the respondent a greater sum than the entitlement ordered by the court. These offers, set out in the applicant’s submissions (and annexed) are:•In an email sent to the respondent on 4 November 2019 marked “without prejudice”, the applicant offered to sell the [B Street] property cooperatively and divide the proceeds equally.•On 23 December 2020, the applicant filed his Initiating Application containing proposed orders to divide the proceeds of the sale of the [B Street] equally.•In an email sent to the respondent on 1 December 2021 marked “without prejudice”, the applicant offered to underwrite a fixed cash settlement of $1.35m to the respondent (fixed at the request of the respondent, irrespective of the sale price of [B Street] with a reserve of $2.2m) equating to a little over 61% to the respondent. This offer was open for acceptance until 3 December 2021. •In an email sent to the respondent on 23 December 2021 marked “without prejudice”, the applicant offered to “meet” the respondent’s request for a fixed cash settlement of $1.5m from [B Street]. That offer equated to a little over 68% of [B Street] to the respondent. The monies were to be paid with the first $500k within 30 days of court orders, with the property to be transferred once the monies were received, and a further 500k by 30 July 2022. •In a letter sent to the respondent’s solicitors 9 February 2022 marked “without prejudice”, the applicant offered the respondent 55% of the value of [B Street], by either cash payment or division of sale proceeds. This letter was explicitly an offer of settlement under Division 4.2.2 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, and specified that:•within 14 days of the offer, the property be made available for inspection;•within 28 days, the applicant declare in writing whether he intends to acquire the property;•within 60 days of exercising that option, the applicant pay the respondent the sum of $1,210,000 and the respondent transfer the property to the applicant;•If the applicant does not exercise the option to acquire the property, it be sold with the proceeds to be divided 45:55 in favour of the respondent, net of fees and costs. This offer specified that it was made in accordance with Calderbank v Calderbank [1975] 3 All ER 333 and Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435, and that if the offer is not accepted and the outcome is equal or more favourable to the applicant, he will seek costs on an indemnity basis from the date of rejection. •In a letter sent to the respondent’s solicitors 24 May 2022 marked “without prejudice” and referring to division 4.2.2 of the rules, the applicant offered the respondent a sum certain of $1.275m (equivalent to approximately 58% of [B Street]) in respect of the [B Street] property. This letter referred to prior negotiations in which the respondent had agreed on the sum of $1.5m, but had then reneged and made the offer of $1.8m to be paid to her, then $1.675 at a later point. Both of these were rejected by the applicant, and as a consequence of increasing costs, he reduced his previous offer of $1.5m to $1.275m in exchange for the transfer of [B Street] to be paid as follows:•$275,000 within 60 days;•$500,000 within 120 days; and•$500,000 by no later than 1 December 2022.Failing the applicant making these payments, the respondent sell [B Street] and any outstanding payment be given to the respondent, with the balance to the applicant. This offer repeated that it was made in accordance with Calderbank v Calderbank and Hazeldene’s Chicken Farm, and that if the offer is not accepted and the outcome is equal or more favourable to the applicant, he will seek costs on an indemnity basis from the date of rejection. •In a letter sent to the respondent’s solicitors 15 July 2022 marked “without prejudice” and referring to division 4.2.2 of the rules, the applicant offered to sell the [B Street] property and divide the proceeds 52.5% in favour of the respondent. This offer repeated that it was made in accordance with Calderbank v Calderbank and Hazeldene’s Chicken Farm, and that if the offer is not accepted and the outcome is equal or more favourable to the applicant, he will seek costs on an indemnity basis from the date of rejection. (5)The applicant submits that given the timing of his offers of settlement (being made early in the proceedings) and the outcome of the trial, the whole of his costs should be subject to cost orders; and(6)In the alternative, if indemnity costs are not awarded, he seeks party-party costs of $245,841.

Ratio Decidendi

Legal Principle Established

The respondent submits that if the court grants such an order as sought by the applicant, she would be required to immediately sell her home, and would have limited prospects of acquiring a primary place of residence. Her 2021 taxable income was $62,243 and she submits being required to pay indemnity costs as sought would put her at risk of being homeless. CONSIDERATION Under rule 12.13(4) of the Rules:A party applying for an order for costs on an indemnity basis must inform the court if the party is bound by a costs agreement or costs agreements in relation to those costs and, if so, the terms of the costs agreement or costs agreements. The applicant has not provided a copy of any cost agreement, nor an itemised account. In these circumstances and for the reasons outlined below, I will not make an order that the respondent pay the applicant’s costs on an indemnity basis. The applicant has not provided any summarised breakdown as to how the costs of about $370,000 have been incurred in relation to a two-day trial where it appears that there was never any dispute about the value of the principal asset. Further, there has not been substantial time taken up with interlocutory applications. The court's power to award costs are subject to the operation of sections 117(1), (2) and (2A) of the Act. Those sections provide:(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. The starting point provided by s 117 (1) of the Act is that each party shall bear their own costs. Section 117 (2) provides that the court may make an order for costs which it considers just when the circumstances justifying doing so.