Hadaway and Hadaway

[2014] FamCA 612

FAMILY COURT OF AUSTRALIA

HADAWAY & HADAWAY [2014] FamCA 612

FAMILY LAW – COSTS – Application for costs by both the husband and the wife in relation to final property orders – where both parties made prior offers of settlement – where there is no immediate justifying circumstances that favours one party over the other – no justifying circumstance for departure from the general principle in s 117 – both applications for costs are dismissed

Family Law Act 1975 (Cth) s 117

In the Marriage of Marinko (1983) 8 FamLR 849

APPLICANT: Ms Hadaway

RESPONDENT: Mr Hadaway

FILE NUMBER: (P)SYC 7594 of 2011

DATE DELIVERED: 5 August 2014
(In Chambers)

PLACE DELIVERED: Newcastle

PLACE HEARD: Newcastle

JUDGMENT OF: Cleary J

HEARING DATE: Written submissions

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Kennedy

SOLICITOR FOR THE APPLICANT: Clinch Long Letherbarrow

SOLICITOR FOR THE RESPONDENT: Barkus Doolan Family Lawyers  (Ms Winning)

Orders

1. Leave is granted to the husband to apply for costs out of time.

2. The application of the wife for costs filed 16 December 2013 is dismissed.

3. The application of the husband for costs filed 1 April 2014 is dismissed.

4. No orders as to costs.

IT IS NOTED that publication of this judgment by this Court under the pseudonym  Hadaway & Hadaway has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: (P)SYC7594 of 2011

Ms Hadaway

Applicant

And

Mr Hadaway

Respondent

REASONS FOR JUDGMENT

Introduction

1. These are applications by the wife Ms Hadaway and the husband Mr Hadaway for costs arising from proceedings before me in April, June and July 2013.

Orders made

1. Judgment was delivered on 19 November 2013.  The final property orders provided for:

   a)Sale of the family home with division of the net proceeds 62.5 per cent to the wife and 37.5 per cent to the husband.

   b)Retention of own superannuation funds by each party and personalty (Orders 24 and 25).

   c)Spousal maintenance for two years @ $500 per week.

2. The ultimate adjustment of interests in property amounted to approximately 60 per cent to the wife and 40 per cent to the husband plus spousal maintenance.

3. On 16 December 2013 an Application in a Case (costs) was filed with a supporting affidavit by the wife.

4. On 1 April 2014 the husband filed a Response to the application seeking leave to apply for costs out of time, dismissal of the wife’s application and costs for himself.  The husband also filed a supporting affidavit.

5. On 16 April 2014 the wife filed a further affidavit in response.   

6. On 16 May 2014 the wife lodged written submissions.[1]

   [1]Exhibit 20

7. On 17 June 2014 the husband lodged written submissions.[2]

   [2]Exhibit 21

8. On 2 July 2014 the wife lodged written submissions in response to those of the husband.[3]

   [3]Exhibit 22

Application of the wife

1. In support of her application, the wife relied on the following matters:

   1.        Offer to settle[4]

   [4]Affidavit of wife filed 16/12/2013, Annexure ‘B’

   On 10 April 2012 at a conciliation conference, the wife put forward an offer as follows:

   (i)division of non-superannuation assets 62/38 in her favour;

   (ii)each to retain his and her own superannuation benefits;

   (iii)weekly maintenance until the end of 2016 @ $500 per week.

   The wife asserts that her offer equated to an adjustment of 60.8 per cent of the net marital asset pool (as ultimately determined by me) to her.

   2.         Mediation Position Paper[5]

   The wife proposed:

   (i)a cash payment to her of $1.4 million;

   (ii)each party to retain own superannuation;

   (iii)with minor variations, each party to retain personalty and realty in their possession.

   The wife asserts that her offer equated to an adjustment of 59 per cent of the net marital asset pool to her.

   [5]Affidavit of wife filed 16/12/2013, Annexure ‘C’

Application of the husband

1. In support of his application, the husband relied on the following matters:

   1.        Conciliation Conference 10 April 2014[6]

   The husband asserts that the parties formulated Heads of Agreement at the conciliation conference.  Subsequently, proposed Consent Orders[7] were forwarded to the wife’s solicitors.

   By 25 May 2012 there were further negotiations and agreement by the husband to matters raised by the wife.

   2.        Mediation 19 September 2012

   The husband asserts that the parties reached agreement at mediation[8] and proposed consent orders were forwarded to the wife’s solicitor.

   It is apparent that there were ongoing negotiations about property issues in 2012, which hovered on the brink of settlement, but the matter did not resolve.

   [6]Affidavit of husband filed 01/04/2014, Annexure ‘A’

   [7] Affidavit of husband filed 01/04/2014, Annexure ‘B’

   [8]Affidavit of husband filed 01/04/2014, Annexure ‘F’

2. The wife’s costs, incurred with three different firms are:

13/03/2013 and following

November 2012 – March 2013

June 2011 – October 2012

Counsel’s fees:

-    $23,237

-    $  5,950

Expert Fees

Total

$115,411

$  33,656

$ 29,029

$188,096

$ 29,187

$ 11,425

$228,708

1. The husband’s costs are $177,913.

The law

1. The general principle enunciated in s 117 of the Family Law Act 1975(Cth) is that each party to proceedings shall bear his and her own costs.

2. If the Court is of the opinion that there are circumstances that justify the making of an order for costs, then in considering what order, if any, should be made, the Court must have regard to the factors set out in s 117(2A) of the Act before deciding whether to award costs.

3. It is not immediately apparent that there are justifying circumstances for one party or the other.  However I have considered the relevant factors in coming to that conclusion.

(a)     The financial circumstances of the parties

1. The husband has a significantly greater income and earning capacity than the wife.  It was not in dispute.  An order for spousal maintenance was made on that basis.

2. There is authority for such a disparity to be a justifying factor for a costs order.

3. In the Marriage of Marinko[9] is authority for the proposition that the Court should take into account the end result of the orders and not just the position at trial.

   [9](1983) 8 FamLR 849

4. The wife is presently supported by rental income and spousal maintenance with a contribution to the costs of providing for the children through child support payments from the husband.  She was not in paid employment and not intending to be.

5. As a consequence of the sale of the former family home, the wife is in a superior net asset position to that of the husband.

6. However the income of the husband is such that he has the capacity to borrow to generate wealth.  It is likely he will or already has borrowed to acquire stable accommodation for himself and the children.  It is a matter I take into account together with his immediate obligation to pay spousal maintenance and an ongoing obligation to pay child support.

7. Further, there was an unexpected benefit for both parties in the former family home selling for $300,000 more than was predicted by the agreed value.

8. Accordingly, I do not consider that the financial circumstances of the parties justifies an order for either party against the other.  

(b)      Receipt of legal aid

1. Not relevant.

(c)      Conduct of the parties

1. Neither party makes a complaint about the other in relation to conduct.

2. I take conduct into account as a positive factor of orderly and timely preparation by both parties.

(d)     Failure to comply with previous orders

1. Not relevant.

(e)      Whether a party to the proceedings has been wholly unsuccessful

1. Quite properly, neither party submits that this ground applies.   

(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

1. It is this ground which each party relies on.

2. Each party submits that genuine offers to settle were made by that party in good faith from early in 2012.  I accept that they did.  Each party refers to the other “reneging.”  I do not accept the terminology.  In this jurisdiction, a matter is not resolved until orders are made.

3. Each party simply made a decision not to proceed with a particular proposal.  They took their chances with a Court determination as they are entitled to do.

4. On the analysis of each party the proposals for settlement of financial matters being made were well within the range of the ultimate result.

5. Towards the end of 2012 negotiations began about the children.

6. In relation to the children, the parties were struggling with uncertainties about the best interests of the children, one of whom was three when the matter was heard. 

7. The recommendations of the Chapter 15 expert relied on by the husband were not simply implemented, nor were the proposals of the mother.  The parties had resolved all the parenting matters they could.

8. On 5 December 2012 there was an informal mediation.  The husband put a formal offer to settle in respect of all issues in dispute. 

9. It was a serious detailed offer.  He asserts that the property adjustment was 61.4 per cent to the wife.  That offer was rejected.

10. Proposals were put on various bases; that the family home be sold, acquired by the wife and retained by the husband.  There were also variations on spousal maintenance sought and offered, including no spousal maintenance to be paid.

11. Accordingly I conclude that there is no justifying circumstance for departure from the general principle and make orders dismissing both applications.

I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cleary delivered in Chambers on 5 August 2014.

Associate: 

Date:  5 August 2014