KD v GB
[2014] WASCA 165 (S)
•2 APRIL 2015
KD -v- GB [2014] WASCA 165 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2014] WASCA 165 (S) | |
| THE COURT OF APPEAL (WA) | |||
| Case No: | CACV:35/2013 | ON THE PAPERS | |
| Coram: | BUSS JA NEWNES JA MURPHY JA | 2/04/15 | |
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Appellant pay respondent's costs of appeal from date settlement offer lapsed | ||
| B | |||
| PDF Version |
| Parties: | KD GB |
Catchwords: | Family law Appeal dismissed Costs of appeal Settlement offer by respondent not accepted Whether circumstances justify order that appellant pay respondent's costs of appeal Family Court Act 1997 (WA), s 237 Turns on own facts |
Legislation: | Family Court Act 1997 (WA), s 237 |
Case References: | Browne and Green (2002) 170 FLR 411; (2002) 29 Fam LR 428 K v R [2010] WASCA 237 KD v GB [2014] WASCA 165 Penfold v Penfold [1980] HCA 4; (1980) 144 CLR 311 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : KD -v- GB [2014] WASCA 165 (S) CORAM : BUSS JA
- NEWNES JA
MURPHY JA
- Appellant
AND
GB
Respondent
ON APPEAL FROM:
Jurisdiction : MAGISTRATES COURT OF WESTERN AUSTRALIA
Coram : MAGISTRATE A MORONI
Citation : [2013] FCWAM 34
File No : (P)PTW 3144 of 2008
Catchwords:
Family law - Appeal dismissed - Costs of appeal - Settlement offer by respondent not accepted - Whether circumstances justify order that appellant pay respondent's costs of appeal - Family Court Act 1997 (WA), s 237 - Turns on own facts
Legislation:
Family Court Act 1997 (WA), s 237
Result:
Appellant pay respondent's costs of appeal from date settlement offer lapsed
Category: B
Representation:
Counsel:
Appellant : No appearance
Respondent : No appearance
Solicitors:
Appellant : Calverley Johnston Lawyers
Respondent : O'Sullivan Davies Lawyers
Case(s) referred to in judgment(s):
Browne and Green (2002) 170 FLR 411; (2002) 29 Fam LR 428
K v R [2010] WASCA 237
KD v GB [2014] WASCA 165
Penfold v Penfold [1980] HCA 4; (1980) 144 CLR 311
1 JUDGMENT OF THE COURT: On 4 September 2014, we dismissed an appeal from a decision of Magistrate Moroni in the Magistrates Court, exercising its jurisdiction under pt 5A of the Family Court Act 1997 (WA) (the Act) to alter property interests arising out of a de facto relationship. We made orders for the filing and service of affidavits and submissions on the question of costs, a question that was to be determined on the papers.
2 The parties complied with those directions, but owing to a clerical error in the Court of Appeal office the papers were not drawn to the attention of the court. Regrettably, as a result the decision on costs has been delayed for longer than it should have been.
Background
3 After the breakdown of a de facto relationship lasting some 10 years, the appellant had sought a property settlement order pursuant to s 205ZG of the Act. The principal issue at trial was the respective contributions of the parties to the assets of the relationship. The magistrate found that the appellant had brought into the relationship assets with a value of $270,000 and had taken out of it assets worth probably double that value. His Honour found that the respondent had brought into the relationship a farm machinery business, valued at trial at $239,350, and the land on which it stood, valued at trial at $700,000, which he still had at the time of trial. However, by the time of trial the farm machinery business and the land were the only substantial surviving assets of the relationship, the appellant having dissipated almost all of the assets of the relationship that she had taken when cohabitation ceased.
4 Having regard to the contributions that the magistrate found the respondent had made to the property taken out of the relationship by the appellant, an amount previously paid to the appellant, and assets taken out of the relationship by the appellant, his Honour assessed the contribution of the appellant to the assets of the relationship as having a value equal to 10% of the value of the land and business, which he calculated to be an amount of $93,935. He ordered the respondent to pay that amount to the appellant, less the sum of $8,800 which the respondent had previously paid.
5 The appellant appealed to this court, contending that his Honour erred in assessing the amount properly due to her and that his Honour should have found she was entitled to the sum of $375,525; that is, an additional amount of $281,590. The appellant's principal contention was that in determining the contributions of the parties to the assets of the relationship the magistrate had incorrectly applied an asset by asset approach or a hybrid approach, rather than a global approach. In addition, the appellant challenged certain findings of fact the magistrate had made as to the parties' respective contributions to the relationship assets.
6 We found that the appellant had failed to make out any of the grounds of appeal: KD v GB [2014] WASCA 165. On the appellant's primary ground, we accepted that the magistrate had not adopted a global approach but concluded that in the circumstances of the case, including the absence of proper valuations of the critical assets and liabilities at the commencement and at the termination of cohabitation, his Honour was not in error in the approach he took or in the result at which he arrived. We also concluded that none of the challenges to the magistrate's findings of fact had been made out. The appeal was accordingly dismissed.
7 The respondent now seeks an order that the appellant pay his costs of the appeal. The appellant resists the making of such an order.
The relevant principles
8 The power of this court to make an order as to costs is governed by s 237 of the Act: K v R [2010] WASCA 237 [149]. Section 237 provides, relevantly, as follows:
(1) Subject to subsection (2) and sections 205SB and 242, each party to proceedings under this Act is to bear the party's own costs.
(2) If, in proceedings under this Act, the court hearing the proceedings is of the opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (3), (5), (6A) and (6) and in accordance with any relevant rules, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court thinks just.
(3) In considering what order (if any) should be made under subsection (2), a court must have regard to -
(a) the financial circumstances of each of the parties to the proceedings; and
(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; and
(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; and
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of a court; and
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings; and
(f) whether a party to the proceedings has made an offer in writing to another 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.
It is an accurate description of s 117 (1) to say that it expresses a general rule, provided that it is firmly understood that the sub-section is not paramount to s 117 (2). As sub-s (1) is expressed to be subject to sub-s (2) the former must yield whenever a judge finds in a particular case that there are circumstances justifying the making of an order for costs.
Sub-section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional or special onus on an applicant for an order for costs. Consequently, with respect to their Honours in the Family Court, we do not agree with the suggestion made in the judgment under appeal that an order can only be made under s 117(2) in 'a clear case' (315).
10 Their Honours' comments apply equally to s 237 of the Act.
Disposition of the application
11 In this case, the position in relation to each of the factors that fall for consideration under s 237(3) is as follows:
(a) there cannot be any doubt that the respondent is in a better financial position than the appellant. In his affidavit in support of this application, the respondent values his net assets at approximately $633,817, plus the value of the business. The respondent has not ascribed a value to the business but says that he has substantial debts to service and that the business is running at a loss. It appears from the affidavit that the respondent's weekly income is sufficient to meet his weekly expenditure.
In her affidavit, the appellant says in respect of her assets and liabilities that, putting aside superannuation of $64,417.58, she has a deficit of $29,877.52, a deterioration from her financial position at the time of trial. According to the appellant, she earns approximately $250 per week from an online eBay store, which is not enough to meet her living expenses. The appellant says that her savings continue to decline as she pays her debts and meets the shortfall between her income and weekly expenditure, such that she will have to consider voluntary bankruptcy if she is unable to increase her income. The appellant says that while she is a qualified teacher she has not worked full-time as a teacher for some 14 years. The appellant does not say to what extent she has worked as a teacher or what (if any) enquiries she has made as to the prospects of full-time employment as a teacher.
(b) Neither party was in receipt of legal aid.
(c) It was submitted by the respondent that it is a relevant consideration that certain of the grounds of appeal were conceded to be without merit or not pursued, and that argument was put on the appeal which required an amendment of the grounds of appeal, for which leave was granted but which was never made. It was also submitted that on the hearing of the appeal submissions were made which were not capable of being supported by the evidence.
(d) It was not suggested that there was a failure by either party to comply with orders of the court.
(e) As mentioned earlier, the appellant was wholly unsuccessful on the appeal.
(f) There was an exchange of settlement offers before the hearing of the appeal. By an email dated 19 November 2013, the respondent, by his solicitors, offered to settle the appeal on the basis that he pay to the appellant the sum of $50,000 and each party bear their own costs. That offer was expressed to be open until 25 November 2013. Some six months later, by a letter dated 11 April 2014, the appellant, by her solicitors, offered to settle for the sum of $180,000, to be paid within 60 days, with each party to bear their own costs.
12 In our view, there are circumstances that justify an order for costs in favour of the respondent. There are two factors of particular significance.
13 First, the appellant was wholly unsuccessful on the appeal. It was an appeal that raised no question of law of any difficulty or complexity but simply turned on the application of well-established principles to the facts of the case.
14 Secondly, the appellant continued to pursue the appeal even after receiving the respondent's offer of settlement of 19 November 2013, an offer that was, in the circumstances, a generous one. At the time the offer was made the appellant had in her possession all of the material necessary to enable her to make a realistic assessment of it. She chose to reject it. The appellant's offer of 11 April 2014, on the other hand, was not by any measure a reasonable offer. While the fact that the respondent made an offer which exceeded the result the appellant achieved on the appeal is not of itself decisive, it is something to which 'very significant weight indeed ought normally be given': Browne and Green (2002) 170 FLR 411; (2002) 29 Fam LR 428 [57].
15 The fact that the respondent is in a better financial position than the appellant is a relevant factor but it is not a factor of great weight in circumstances where the appellant has put the respondent to substantial costs by pursuing an entirely unsuccessful appeal and has done so despite a reasonable offer of settlement by the respondent. According to the respondent, he has incurred total legal costs to date of $44,305.91 in the appeal, of which $15,985.31 was incurred after his settlement offer lapsed on 25 November 2013.
16 We should say for completeness that, having regard to the appeal as a whole, we do not consider that the matters relied upon by the respondent under s 237(3)(c) are of any significant weight. It was not suggested that there were any other relevant factors to be considered.
Conclusion
17 In the circumstances, the appropriate order is that the appellant pay the respondent's costs of the appeal from 25 November 2013, to be taxed.
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