Kyle & Kyle
[2022] FedCFamC1F 251
•27 April 2022
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Kyle & Kyle [2022] FedCFamC1F 251
File number(s): SYC 4454 of 2018 Judgment of: WILSON J Date of judgment: 27 April 2022 Catchwords: FAMILY LAW – ARBITRATION – costs application – offers of compromise – Agosti & Agosti considered – application dismissed. Legislation: Family Law Act 1975 (Cth) s 117(1)-(2) Cases cited: Agosti & Agosti [2021] FedCFamC1F 72
In the Marriage of Hogan (1985) 10 Fam LR 453
Division: Division 1 First Instance Number of paragraphs: 19 Date of last submissions: 29 March 2022 Date of hearing: On the papers Place: Melbourne Counsel for the Applicant: Mr D. Dura Solicitor for the Applicant: Karras Partners Lawyers Counsel for the Respondent: Mr S. Schonell Solicitor for the Respondent: The Norton Law Group ORDERS
SYC 4454 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR KYLE
Applicant
AND: MS KYLE
Respondent
ORDER MADE BY:
WILSON J
DATE OF ORDER:
27 APRIL 2022
THE COURT ORDERS THAT:
1.The wife’s application in a proceeding filed 1 March 2022 is dismissed.
2.Each party must bear her and his own costs of the proceeding, the arbitration and this application under 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 Kyle & Kyle is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
WILSON J
By orders made 11 March 2022 the parties were invited to make submissions on costs and I indicated that a decision on costs would thereafter be made on the papers. These are my reasons for ordering that each party bears his and her own costs of the proceeding, of the arbitration and of this application.
Each party propounded opposing costs applications. In the wife’s application in a proceeding filed 1 March 2022, she sought the following orders –
(1)That the Husband pay the Wife's costs and disbursements incurred by her in the matter from 23 March 2021 assessed in accordance with Schedule 3 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021.
(2)The Husband reimburse to the Wife half of the costs of the Arbitration.
(3)That Husband pay the Wife's costs of and incidental to this Application.
In the husband’s response to the wife’s application in a proceeding, he sought the following orders –
(1)That the Application in a Proceeding filed by the Wife on 22 February 2022 be dismissed.
(2)That the Wife pay the Husband’s costs of and incidental to this Application.
Expressed most basically, the wife sought an order for the husband to meet costs in the manner set out in her application in a proceeding because –
(a)the husband’s conduct warranted the imposition of a costs order under s 117(2) of the Family Law Act;
(b)the husband had been errant in his compliance with his duties of disclosure; and
(c)the award of the arbitrator was more favourable than were offers of compromise between the parties.
In written submissions dated 24 March 2022 the wife’s counsel put his client’s contentions in emphatic terms. Mr Dura of counsel wrote as follows –
Given the limited property of the parties in this matter, the Wife's limited income earning capacity post-separation, the Wife's inability to access any of the property of the parties for her own benefit subsequent to the parties' separation in December 2017 while the Husband controlled the property and having made steps to resolve the matter approximately 3 years ago by making offers, all of which she has achieved the same or a better result, and finally having to wait 4 years since her separation from the husband to obtain her property entitlements, this Court should find overwhelmingly that there are circumstances that justify the making of an Order for costs against the Husband.
Conversely, Mr Schonell of counsel for the husband summarised his submissions in the following manner–
It is submitted that in this case there are no circumstances that justify the Court making an order that the Husband pay Wife’s costs [sic].
RELEVANT FACTUAL SETTING
The parties lived together for about 14 years, according to the arbitrator. They have two children together, a 14 year old and a 12 year old.
The arbitrator made orders the effect of which was to alter property interests of the parties as to 45% to the husband and 55% to the wife.
In her affidavit made in support of this costs application the wife deposed to various offers of settlement. She mentioned her 16 March 2021 offer. However, that offer did not include superannuation nor the husband’s tax liability. In Agosti & Agosti[1] I surveyed the authorities where an offer of compromise was defective in that it did not address the whole substratum of the litigation between parties.
[1] [2021] FedCFamC1F 72.
In my view, the wife’s 16 March 2021 offer of compromise, even if accepted, would not have resolved the entire dispute between the parties. It could not be seriously considered as an offer of compromise against which the award was to be contrasted for the purpose of considering whether a better outcome had been achieved by the offer or the award.
The wife then contended that the husband’s disclosure was defective with the consequence that that her legal costs increased. Her narrative of her complaints about the husband’s defective disclosure commenced in mid-August 2018, almost four years ago. Some disclosure was provided by the husband in early October 2018, she said. By February 2019 the wife’s solicitors wrote to the husband’s solicitors threatening to cancel the mediation unless disclosure issues were addressed. She said incomplete disclosure followed.
Events between February 2019 and September 2020 were not the subject of evidence by the wife. Instead, the next event in her narrative was late September 2020 when a conciliation conference was scheduled. By 28 September 2020 the wife sought further disclosure. The husband’s solicitors wrote to the wife’s solicitors seeking disclosure. It seemed that deficiencies in disclosure were mutual.
Certain disclosure was provided on 12 November 2020.
The issue of the single expert was unresolved by late 2020.
By early 2021 a conciliation conference was held before a senior registrar of the Court (in its earlier emanation).
The wife then asserted that the husband delayed in expeditiously settling his interest in the Suburb B property after agreeing to do so in late February 20221. A different dispute arose in relation to the sale of the husband’s interest in that property. By July 2021 a consent position was reached pursuant to which the proceeds of the sale of the Suburb B property were to be held and not disbursed.
The husband made an affidavit on 22 March 2022. In it he asserted that he is better off following the arbitral award than he would have been had he accepted the wife’s 16 March 2021 offer of compromise. In his affidavit he also deposed to events pursuant to which he denied causing this litigation to be protracted. He denied any defects in his disclosure. He provided information about the single expert. He also explained the circumstances surrounding the release of funds from the sale of the Suburb B property.
Self evidently, the factual contests raised by the wife were disputed by the husband. In order for me to definitively state where the truth lay, it would necessary to hear cross-examination about all disputed issues. That would only serve to prolong this dispute between the parties, add to their costs, increase the quantum of unrecoverable outlays and intensify the existing hostility between the parties. The arbitrator’s award reflects a near-half division of assets. In my view, an order for costs would unfairly tip the balance in favour of the wife. I take the view that the wife’s offer of compromise was defective. I am unable to definitively say that this litigation was prolonged exclusively by the husband’s conduct. I am unable to say that the wife’s conduct has not contributed to the prolongation of this litigation. It would not be just, as authorities have considered,[2] to make a costs under s 117(2) say, to impose a costs burden in the manner sought by the wife.
[2] See for example In the Marriage of Hogan (1985) 10 Fam LR 453.
Each party must bear her and his own costs under s 117(1) of the Family Law Act.
I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wilson. Associate:
Dated: 27 April 2022
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