Griffiths & Griffiths (No 2)
[2022] FedCFamC1F 379
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Griffiths & Griffiths (No 2) [2022] FedCFamC1F 379
File number(s): PAC 3392 of 2020 Judgment of: WILSON J Date of judgment: 27 May 2022 Catchwords: FAMILY LAW – NATIONAL ARBITRATION LIST – COSTS – applicant’s application for indemnity costs – costs to be paid pursuant to s 117(1) of the Family Law Act and not otherwise. Legislation: Family Law Act 1975 ss 117(1), 117(2A). Cases cited: Agosti & Agosti [2021] FedCFamC1F 72
Fitzgerald v Fish (2005) 33 Fam LR 12
Griffiths & Griffiths [2022] FedCFamC1F 219
In the Marriage of Hogan (1986) 10 Fam LR 681
Division: Division 1 First Instance Number of paragraphs: 21 Date of last submissions: 14 March 2022 Date of hearing: 6 May 2022 Place: Melbourne Solicitor for the Applicant: John Hall Lawyers Solicitor for the Respondent: Watts McCray (NSW) Pty Ltd ORDERS
PAC 3392 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR GRIFFITHS
Applicant
AND: MS GRIFFITHS
Respondent
ORDER MADE BY:
WILSON J
DATE OF ORDER:
27 MAY 2022
THE COURT ORDERS THAT:
1.Pursuant to s 117(1) of the Family Law Act each party must bear his and her own costs of the proceeding, the arbitration and this costs application.
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 Griffiths & Griffiths is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
WILSON J
INTRODUCTION
These reasons address –
(a)the husband’s application for the wife to pay his costs and disbursements assessed on an indemnity basis from 24 February 2020 to 3 December 2021 in the sum of $139,418.95;
(b)the husband’s application for the wife to pay his costs on this costs application; and
(c)the wife’s application for the dismissal of all of the husband’s costs applications.
The wife requested all questions of costs to be deferred until the determination of the wife’s application to review the arbitral award.
On 6 May 2022 I handed down judgment on the wife’s review application, dismissing it and all grounds of review.[1]
[1]Griffiths & Griffiths [2022] FedCFamC1F 219.
In essence, in support of the husband’s indemnity costs application he contended that –
(a)the wife had conducted her case in this proceeding is such manner as to warrant the imposition of a costs order against her; and
(b)the wife ought to have accepted the offer in the letter dated 24 February 2020 and her refusal to accept that offer was unreasonable in the circumstances, thereby attracting an indemnity costs order.
The wife contended that the husband’s costs applications should be dismissed.
These reasons explain why in my view each party’s cost of the proceeding including of the arbitration as well as this costs application must be borne by him and her under s 117(1) of the Family Law Act.
The husband invoked s 117(2A)(c) of the Family Law Act arguing that the conduct of the parties was relevant. It is well established[2] that only one subsection of s 117(2A) needs to be engaged in order to enliven a consideration of s 117(2).
[2] Fitzgerald v Fish (2005) 33 Fam LR 12.
The husband cited as the relevant conduct the wife’s failure to comply with certain orders. In written submissions prepared by the husband’s solicitors dated 17 March 2022, it was stated that the husband relied on his affidavits made 23 December 2021 and 14 February 2022 to make good his costs arguments. The husband’s submission said very little about the ground for the costs application relating to the wife’s conduct. However, in the husband’s 23 December 2021 affidavit he deposed to the following matters –
(a)on 20 August 2020 his Honour Judge Myers in the Federal Circuit Court of Australia (“FCCA”) (as it then was) made orders for the parties to appoint a single expert to value antique furniture, chattels and bric-a-brac yet the wife proposed instead that a letter from her solicitor would suffice for the estimated value of the antiques;
(b)the wife refused to sell a parcel of land in a manner that corresponded with orders made on 17 February 2021; and
(c)the wife refused to sell antiques thereby requiring the husband to engage a valuer whose valuation was later used.
The husband deposed to conduct in which the wife engaged allegedly grounding his costs application in his 14 February 2022 affidavit. Relevantly synthesised, he deposed to the following –
(a)between 4 March 2020 and 9 July 2020 the husband corresponded with the wife with a view to resolving their dispute prior to instituting this proceeding;
(b)on 9 July 2020 the husband’s solicitors served process on the wife’s solicitors;
(c)he deposed to the difficulties in valuing antiques as is addressed above; and
(d)only after the husband brought an application for orders for the appointment of a trustee for the sale of antiques did the wife agree to obtaining a report from N Company.
The wife made an affidavit on 27 January 2022 in relation to her conduct of this litigation. In it she deposed to the following –
(a)the husband arranged for her access to joint accounts to be blocked following separation;
(b)the husband told the wife he would block access to the former matrimonial home;
(c)she disputed delaying in selling the Suburb G property; and
(d)that property was eventually sold for $2,255,000 being almost half a million dollars more than the valuation of $1,760,000.
The foregoing allegations and counter allegations were not subjected to testing for the purposes of this costs application with the consequences that I was no better appraised of the details of the facts underpinning the allegations than were the allegations themselves.
It is fair to say that the wife’s applications to this Court subsequent to the registration of the arbitral award have been singularly unsuccessful.
The husband placed considerable store in his contention that indemnity costs were payable by reason of the wife’s unreasonable refusal to accept the 24 February2020 offer. In written submissions filed on behalf of the husband dated 17 March 2022, it was put that the wife sought a division of assets in an amount corresponding to 60% in her favour yet the arbitral award awarded a different amount.
It became necessary to examine the terms of the letter from the husband’s solicitors to the wife date 24 February 2020. In it the husband’s solicitors proposed –
(a)the wife repay the J Town offset account of $100,000;
(b)the husband receive the property at O Street Suburb M refinanced into his sole name, together with the property at P Street J Town, his superannuation, B Pty Ltd, boats, machinery, cryptocurrency and the funds in the CBA account;
(c)the wife receive commercial property on H Street Suburb G, K Street Suburb L, antiques, the Griffiths Family Trust and cash then held by her, her Company Q shares, her car and her superannuation entitlements;
(d)the E Loyalty Program be placed in trust for family use;
(e)the everyday offset account proceeds be applied towards reducing then closing the Suburb M home loan; and
(f)the CBA everyday offset account be applied towards reducing then closing the J Town home loan.
The husband’s solicitors wrote with emphasis in bold lettering that the proposal outlined in their 24 February 2020 letter represented a proposal of settlement on the basis that the wife received 54% of the net asset pool.
After the wife retained solicitors, on 6 March 2020 they wrote to the husband’s solicitors indicating that they would respond to the 24 February 2020 proposal as soon as possible. No evidence emerged that the wife’s solicitors responded to the 24 February 2020 proposal. It seemed that litigation then before his Honour Judge Myers proceeded, ultimately leading to the case being referred to arbitration and being concluded by the arbitral award. The husband relied on the proposition that the arbitrator ultimately made orders for a 50% alteration of the parties’ property interests, and in view of the fact that the 24 February 2020 proposal represented a 54% division of net assets to the wife, had she accepted the proposal the outcome would have been more favourable to her than was the outcome following the arbitration and, in participating in the arbitration, she incurred costs as well as putting the husband to costs.
In her affidavit made 27 January 2022 the wife disputed the assertion by the husband that his 24 November 2020 proposal represented a 54% division of net assets. She deposed to the husband unilaterally attributing values to items of property which amounts were not agreed. She said the husband had been derelict in his disclosure obligations so she was unable to assess whether the husband’s proposal was just and equitable. She deposed to the husband’s proposal equating in percentage terms to 49.4% of net assets in her favour.
As has already been recorded, the arbitrator made orders giving effect to a 50% alteration of property interests.
Based on the foregoing analysis, to my mind it cannot be said that the husband’s assessment was necessarily correct when he argued that his proposal represented a 54% alteration of property interest in the wife’s favour. She calculated the proposal (equally imprecisely it seemed to me) as being valued at 49.4% and the arbitrator ordered a 50% division to each party. I am unable to see how it can be reliably contended by the husband that some entitlement to indemnity costs axiomatically follows from the wife’s contesting the claims in the arbitration having regard to the fact that the proposal put even prior to the commencement of the proceeding was very much in the range of a 50% division.
It must not be overlooked that authority binding on me[3] requires any cost order made in pursuance of s 117(2) upon demonstration of one[4] of the matters in s 117(2A) to be just. I am of the view that an indemnity costs order would not be just. I do not regards the wife’s conduct in the case to be such as to deviate from the principle in s 117(1) nor do I construe the proposal dated 24 November 2020 to have been such as to notify the wife in unmistakable terms that indemnity costs would be sought unless the proposal were given serious attention. In Agosti & Agosti,[5] I surveyed the learning in relation to indemnity costs applications based on an unreasonable rejection of a settlement proposal. In my view, the wife’s approach towards the husband’s 24 November 2020 proposal could not be properly described as unreasonable.
[3] In the Marriage of Hogan (1986) 10 Fam LR 681.
[4] Fitzgerald v Fish (2005) 33 Fam LR 12.
[5] [2021] FedCFamC1F 72.
In those circumstances I order each party’s costs of the proceeding including of the arbitration as well as this costs application to be borne by him and her under s 117(1) of the Family Law Act.
I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wilson. Associate:
Dated: 27 May 2022
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