LANIGA & CARRON (No.2)

[2018] FCCA 3536

FEDERAL CIRCUIT COURT OF AUSTRALIA

LANIGA & CARRON (No.2) [2018] FCCA 3536

Catchwords:
FAMILY LAW – Costs – offer made by wife prior to commencement of proceedings – numerous subsequent offers to settle made by wife – all offers of the wife less in value to that which was ultimately ordered to be paid to the wife – offers rejected – husband self-represented and overwhelmed – order that husband pay wife’s costs as assessed on a party and party basis from date of first offer.

Legislation:

Family Law Act 1975 (Cth), ss.117(1), 117(2), 117(2A)

Cases cited:

Brown v Green (2002) FLC 93 – 115
Lennon v Lennon [2012] FamCA 116
Robinson v Higginbotham [1991] FLC 92 – 209

Penfold v Penfold (1980) 114 CLR 311

Applicant: MS LANIGA

Respondent: MR CARRON

File Number: BRC 9038 of 2016

Judgment of: Judge Egan

Hearing date: 17 October 2018

Date of Last Submission: 30 November 2018

Delivered at: Brisbane

Delivered on: 4 December 2018

REPRESENTATION

Counsel for the Applicant: Mr James

Solicitors for the Applicant: ABKJ Lawyers

Respondent: Self-represented

ORDERS

1. That the husband pay the wife’s costs of and incidental to the property proceeding, and of this application, to be assessed on a party/party basis, on the Family Court Scale of costs, as and from the date of the making of the first offer to settle on 29 April 2016.

IT IS NOTED that publication of this judgment under the pseudonym Laniga & Carron (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRC 9038 of 2016

MS LANIGA

Applicant

And

MR CARRON

Respondent

REASONS FOR JUDGMENT

Costs consideration

1. Judgment in this matter was handed down on 13 September 2018 in property proceedings between the applicant wife and respondent husband. The total asset pool was assessed as being in the amount of $1,343,539.00. Based on a 55/45% apportionment in favour of the wife, and taking into account the earlier distribution to the wife of the amount of $50,000, it was ordered that the wife receive the benefit of an adjustment order in the amount of $688,946.

2. By order of His Honour Judge Jarrett made on 17 October 2018, the husband was to make and file submissions as to costs by 30 November 2018, and the wife was to make and file any reply submissions by 7 December 2018.  Having read the husband’s submissions filed on 30 November 2018, it is clear that after the wife commenced property proceedings the husband wanted to control the tenor of any possible property settlement negotiations between the parties.  So much can be seen from a reading of paragraph 50 of the husband’s submissions where he said:

   50.  On 19 August 2016, I advised the wife that I could not consider or propose any settlement offer until our true financial position has been agreed to by both parties.  As it is clear from the wife’s failure to provide a full and frank disclosure detailed above, the wife had no intention of negotiating in good faith.

3. The husband purported to deal with the issue of offers made by the wife in paragraphs 45 – 58 of his submissions, but, relevantly, he made it clear in those submissions, as can be seen from the passage above, that he would not discuss any settlement proposal until the parties had agreed on the value of the matrimonial assets, a position which was never acceded to by the wife.  Having made that submission, presumably to justify his non-acceptance of any of the wife’s offers, he otherwise did not address the relevant, fundamental, and primary question as to why he did not accept any of the offers made by the wife. 

4. In those circumstances, and in the interests of saving the wife further costs, the wife is not required to reply to the husband’s submissions filed on 30 November 2018.  That is so not only in respect of the submissions made in paragraphs 45 – 58 of the husband’s submissions, but also as to the balance of the husband’s submissions, insofar as those submissions relate to the property proceedings, none of which were persuasive.  It is also of note that the husband failed to address the issue as to whether any costs order ought to be made either on the indemnity basis, as sought by the wife, or on some other basis.  To the extent that the husband failed to do so, the wife is not disadvantaged by not being required to make and file further submissions on costs in reply.  The wife’s earlier submissions clearly put the wife’s case in that regard.    

5. Section 117 of the Family Law Act 1975 (Cth) (“the Act”) does not prevent the making of a costs order in favour of a party in circumstances where a court is justified in doing so.[1]  

   [1]Lennon v Lennon [2012] FamCA 116 per Murphy J at [7] – [10] inclusive and Penfold v Penfold (1980) 114 CLR 311 at 315

6. Section 117(2A) of the Act sets out the matters which a court shall have regard to when making an order for costs, pursuant to section 117(2) of the Act, which it considers just in the circumstances.

7. Section 117(2A)(f) requires the court to have regard to “whether either party to the proceeding has made an offer in writing to the other party to the proceeding to settle the proceeding and the terms of any such offer”.

8. In this matter, the wife made a number of offers to settle the issues in dispute between the parties. Those offers have been set out in annexures to an affidavit of a solicitor named Michelle Felderhof filed on behalf of the wife on 11 September 2018. A summary of the offers made on behalf of the wife are as follows:

   a)On 29 April 2016 – that being a time prior to the commencement of the subject proceedings – a letter was sent by Ogge Law (the wife’s then solicitors) to the husband. That offer:

   i)Was based on an estimated property pool of $1,251,905.

   ii)Provided for a 55/45% apportionment in favour of the wife.

   iii)Provided for a property adjustment in favour of the wife to the value of $688,547.

   iv)Was not accepted by the husband.

   v)Was for a value less than that ultimately awarded to the wife by the court at judgment.

   b)On 6 July 2017 an email was sent by Adamson Bernays Kyle & Jones as the wife’s new solicitors to the husband setting out an offer which:

   i)Was expressed to be an offer made in accordance with the principles enunciated in the case of Calderbank v Calderbank.

   ii)Was expressed to be made in an endeavour to settle the proceedings on a final basis.

   iii)Was based upon the wife receiving 45% of the value of the net property pool which had been estimated as being of a value of $1,152,577.38.

   iv)Provided for the adjustment of property in favour of the wife to the value of $518,659.82.

   v)Was not accepted by the husband.

   vi)Was for a value less than that ultimately awarded to the wife by the court at judgment.

   c)On 22 February 2018 an email was sent by the wife’s solicitors to the husband proposing a settlement of the proceedings which:

   i)Was expressed to have been made pursuant to the principles enunciated in the case of Calderbank v Calderbank.

   ii)Was made with a view to settling all issues of property in dispute between the parties on a final basis.

   iii)Proposed a 47/53% adjustment of property in favour of the husband.

   iv)Stipulated that the offer was to remain open for a period of 14 days from the date of its sending.

   v)Was not accepted by the husband.

   vi)Was for a value less than that ultimately awarded by the court at judgment.

   d)On 21 May 2018, on an occasion on which the matter came before court, counsel on behalf of the wife, on instructions, presented three offers which:

   i)Respectively were for the payment of sums of money between $300,000 and $240,000 by the husband to the wife with a view to settling the proceeding on a final basis.

   ii)The proposed offer for payment to the wife by the husband of the sum of $240,000 represented an adjustment in favour of the wife of approximately 39% of the property pool.

   iii)Were not accepted by the husband.

   iv)Were each for sums less than that ultimately awarded by the court at judgment

9. In Robinson v Higginbotham [1991] FLC 92 – 209 at 78417 Nygh J said (Simpson and Smithers JJ concurring):

   … when one looks to paragraph (f) it is quite clear that the purpose of that position is to ensure that offers to settle, if made seriously, are considered seriously, to ensure the costs of litigation is avoided, the workload of this Court is lightened, and one other consideration is certainly that a party with greater wealth is not placed in a position whereby he or she can wear out the other by simple attrition.

10. In Brown v Green (2002) FLC 93 – 115 at [57] the Full Court said

    We think that whilst s 117(2A) does not provide any direct guidance to where weight should be given in any one particular case, it is very important for the Court to give proper consideration to written offers of settlement that have been made. The insertion of s 117C into the legislation is a clear indication of the desire of Parliament to enable parties to avoid unnecessary litigation by indicating to the other party an appropriate basis upon which litigation can be settled. The failure to heed a reasonable offer in circumstances where there is adequate knowledge of the parties at the time the offer is made to give it a proper consideration, is something to which very significant weight indeed ought normally be given...

Conclusion

1. It is clear that the wife had made genuine, but unsuccessful, attempts to settle the proceedings on a number of occasions, both before, and during the course of, the proceedings. Each of the offers made by the wife, as detailed above, were proposed settlements for the adjustment of property in her favour less than that which was ultimately ordered by this court.

2. Those offers should have been accepted by the husband. Had he done so, there would have been a substantial costs saving for the wife.

3. It is appropriate that, in all of the circumstances of this case, the husband be ordered to pay the wife’s costs assessed on a party/party basis pursuant to the Family Court’s scale of costs.

4. It was submitted on behalf of the wife that the husband ought to pay the wife’s costs of and incidental to the whole of the proceedings on an indemnity basis. However, it has not been demonstrated that the husband has been malicious in his rejection of the wife’s offers made to him. At trial, the husband impressed as someone who was overwhelmed by the breakup of his marriage, and by the subsequent court proceeding. The husband was at all times a self-represented litigant who did not have the benefit of sound legal advice. Though that is not always an excuse, I consider that the husband in this case ought to be given the benefit of the lesser of the two costs orders able to be made against him.

5. The court has taken into account, in that regard, the respective financial positions of each of the husband and the wife, as set out in the judgment, when arriving at its decision. The husband may have the liquid capital to pay a party/party costs order, but not enough to meet an order for the payment of costs assessed on an indemnity basis.  If ordered to pay costs on an indemnity basis, the husband might be required to sell the former matrimonial home, a scenario which may very well lead to further litigation resulting in the wife incurring further significant costs thereby.

6. In all respects, it is appropriate that the husband be ordered to pay the wife’s costs of the proceedings to be assessed on the Family Court scale of costs as and from the date of the making of the first offer to settle on 29 April 2016.

I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of Judge Egan

Date: 4 December 2018