Lorking and Lorking (Costs)

[2009] FamCA 713

FAMILY COURT OF AUSTRALIA

LORKING & LORKING (COSTS) [2009] FamCA 713

FAMILY LAW – COSTS – Offer of settlement

Family Law Act 1975 (Cth)

APPLICANT: Ms Lorking

RESPONDENT: Mr Lorking

FILE NUMBER: SYC 4778 of 2007

DATE DELIVERED: 6 August 2009

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Justice Fowler

HEARING DATE: By written submissions

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Millar

COUNSEL FOR THE RESPONDENT: Mr Livingstone

Orders

1. I dismiss the orders for costs sought by the wife in her Application in a Case filed 11 June 2008.

2. I make no order as to the costs of the present application.

IT IS NOTED that publication of this judgment under the pseudonym Lorking and Lorking (Costs) is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 4778  of 2007

MS LORKING

Applicant

And

MR LORKING

Respondent

REASONS FOR JUDGMENT

Introduction

1. Before the Court is an Application by the wife for an order for costs of the hearing of this matter which took place over the period 2 to 4 March 2009 and for the costs of her application for costs.

2. In his Response to that application the husband has sought an order that the wife’s application be dismissed and save for an order that the husband’s costs of that costs application be paid by the wife as to part.  He does not seek any order for costs.

Background Facts

1. There were defended proceedings before me seeking alterations of property interests.  Initially the proceedings had two respondents to them namely the husband and the husband’s mother against whom orders were sought.

2. The proceedings were settled as between the wife, the husband and the husband’s mother as to claims against the husband’s mother on 11 February 2009 by orders made on that date as follows:

   “1.      In these Orders, the following definitions apply:

   1.1“The [S] property” means the property at [S], in the State of New South Wales, being all the land in folio identifier […], registered in the name of the husband and the wife as tenants in common in equal shares;

   1.2“The [M] property” means the property at [M], in the State of New South Wales, being all the land in folio identifier […], registered in the name of the husband and the wife as tenants in common in equal shares;

   1.3“The [M property] loan” means the loan from Westpac Banking Corporation in the names of both parties, secured by way of mortgage on the title of the [M] property and the [S] property.

   As between the Husband, Wife and Second Respondent

   2.There be a declaration that the second respondent is the beneficial owner of 48.8% of the [S] property.

   3.There be a declaration that the applicant wife and the second respondent husband hold 48.8% of the [S] property on trust for the Second Respondent and are liable to pay to the Second Respondent a sum equivalent to 48.8% of the gross proceeds of the sale of the [S] property less the cost of sale as is provided by these Orders.

   4.The husband and the wife forthwith take all necessary steps to discharge mortgage […] registered over the [S] property and for the release of that property as security of any loan to Westpac Banking Corporation (“Westpac”) with the intent that the said property shall be free of encumbrance and for the purpose of this Order the parties shall ensure that the said mortgage shall be discharged on or before 28 February 2009.

   5.The parties do all acts and things and sign all documents necessary to sell the [S] property and by way of consequential arrangements that shall be made for the purpose of effecting the sale:

   5.1The husband and the wife will list the [S] property for sale by private treaty not later than 28 February 2009 with such agent as the parties may agree to appoint and in default of agreement as to the agent by 28 February 2009, such agent as the President of the Real Estate Institute of New South Wales (or the President’s nominee) shall appoint (“the agent”) and the costs of and incidental to such appointment shall be borne equally by the husband and the wife.

   5.2The sale price at which the [S] property shall be listed shall be such price as may be mutually agreed upon by the husband and the wife in consultation with the solicitor for the Second Respondent and in the absence of agreement reached by 28 February 2009, shall be the price nominated and the fair market value thereof by a valuer (other than a valuer in the employ of the agent) appointed by the President for the time being of the Australian Institute of Valuers (New South Wales branch) (“the valuer”), and the costs of and incidental to such appointment and valuation to be borne equally by the husband, the wife and the Second Respondent.

   5.3The valuer shall, if requested by either the husband, the wife or the Second Respondent at a date three calendar months after the date upon which the [S] property is first listed pursuant paragraph (sic) to 5.1 hereof and thereafter at three calendar monthly intervals until the home is sold, nominate a sale price other than the originally nominated sale price.

   5.4The husband and the wife will accept the advice of the agent in relation to the method of sale and method of advertising for the [S] property, and will keep the Second Respondent informed in relation to method of sale and the advertising.

   5.5The husband and the wife will appoint Mr. Peter Dobrich, solicitor, of […] in the state of New South Wales to undertake the conveyance of the [S] property.

   5.6The [S] property is to remain on the market until sold.

   6.Upon the sale of the [S] property pursuant to these Orders the husband and the wife shall do all acts and things necessary to cause the proceeds of the sale to be paid and distributed in the following manner and priority:

   6.1In payment of all legal costs, commissions, and agent expenses (including advertising expenses) in relation to the sale;

   6.2In reimbursement to either party of any sale costs paid in advance by that party;

   6.3In adjustments of rates and other outgoings;

   6.4In payment to the Second Respondent of a sum equivalent to 48.8% of the balance remaining after the payments referred to in Orders 6.1 – 6.3 (the “48.8% Share”), unless the Husband and Wife have been, despite taking all necessary steps under Order 4, unable to procure the discharge of the mortgage registered over the [S] property, in which case following the payments referred to in Orders 6.1 – 6.3, the priority for the payment of the balance of the proceeds of sale shall be:

   (a)in payment of the minimum sum required by Westpac to discharge the mortgage over the [S] property;

   (b)in payment to the Second Respondent of the 48.8% Share (or such proportion of the 48.8% Share as remains available for payment, if any);

   (c)payments in accordance with Orders 6.5 and 6.6 below;

   6.5In payment of the then remaining balance (if any) to the [M property] loan or in the event that a new loan is established pursuant to Order 4 herein prior to settlement of the sale of the [S] property, then to that loan;

   6.6In the event any amount then remains, in payment to the husband and the wife of the balance in equal shares.

   7.The husband and wife shall pay and bear in equal shares all costs associated with obtaining the release referred to in Order 4 hereof.

   8.The Court notes that:

   8.1subject to and conditionally upon the due receipt of the payment to the Second Respondent of the 48.8% Share the Second Respondent hereby releases the husband and the wife from any further claims at law or in equity or pursuant to any statute or otherwise which she has or may have against the husband and/or the wife.

   8.2The husband and the wife hereby release the Second Respondent from any further claims at law or in equity or pursuant to any statute or otherwise (including but not limited to the provisions of Deed between the parties on or about 5 March 2000 and the document entitled Agreement made between the parties also on or about 5 March 2000) which they have or may have against the second respondent.

   9.That the Second Respondent’s Application for Interim Costs be withdrawn and dismissed.

   10.That each party pay their own costs in relation to the proceedings involving the Second Respondent.

   As between the Husband and the Wife

   11.The Court further notes that, pending further order and following the expiry of the current lease on the property at [Unit 14] in February 2009 the husband and the wife agree that the wife will have exclusive use and occupation of that property.”

3. On the hearing of the balance of the application orders were made dividing the property as between the husband and the wife in the proportions of 54% to the wife and 46% to the husband.

4. The application of the wife for an order for costs seeks on her submission in reply the payment of those costs as assessed.

5. The wife relies in support of her application on an offer made to settle the proceedings prior to the hearing before me.

6. On 13 June 2008 an offer was made by the wife to the husband and the husband’s mother to settle the issues between them, the terms of which the wife asserts were more favourable to the husband than the result.

7. There appears some issue as to the effect but in any event the offer is close to the result.  The wife asserted at the time of the offer that it would yield a division of the net assets after the payment of the husband’s mother’s claim of 57% to the wife and 43% to the husband.

8. The offer was to lapse if not accepted within one month and the offer was conditional on its acceptance by the husband’s mother who by then had a case guardian appointed.

9. There is no evidence before me that the offer was accepted by the case guardian on behalf of the husband’s mother and there is no evidence that the husband was in any way empowered to accept the offer on his mother’s behalf in the circumstance of that appointment.

10. Clearly, therefore, the offer which was made was not capable of acceptance by the husband alone.  There is no evidence before me that it was accepted by the case guardian of the husband’s mother before the offer lapsed.

11. Accordingly I reject the submission that by reason of the offer an order for costs ought to be made in favour of the wife.

12. If it be thought otherwise I would not in any event on the facts of this case make an order for costs, for the reasons set out below.

Section 117 considerations

1. The Court has a broad discretion as to the orders that it makes for costs and that discretion is set out in section 117(2) of the Family Law Act 1975 (“the Act”). In the consideration of the exercise of that discretion I am obliged to consider the matters set out in section 117(2A) of the Act. Those matters are set out in the following sub lettered sub sections of that section namely:

   (a)the financial circumstances of each of the parties to the proceedings

2. On the basis of the evidence before me at the time of hearing and the provisions of the order that I made, either party would have the capacity to meet an order for costs.  Clearly as a result of the orders I made the financial position of the wife was superior to that of the husband.

   (b)whether any party to the proceedings is in receipt of legal aid and, if so, the terms of the grant of that assistance to that party

3. There is no evidence that either party is in receipt of legal aid.

   (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

4. In this regard Mr Livingstone in his submissions raises a number of issues as to the wife’s conduct during the proceedings as did the wife concerning the husband’s conduct.

5. The wife complains of a failed application to “add back” certain monies spent by the wife on her daughter, not being a daughter of the husband but a member from time to time of his household, and the husband’s application for an order for the sale of a property rather than a transfer of the property to the wife.

6. So far as the first of these matters is concerned, the failure to adopt a particular technique for coming to a conclusion as to what is just and equitable between the parties in the property proceedings and how it is to be implemented does not necessarily mean that the submission that that technique should be adopted was unreasonable.

7. That the Court applied a different approach to it and took it into account in a different way does not mean that the application of the husband in this case was unreasonable given that “adding back” is a technique argued for by many litigants and applied by some of my judicial brethren.

8. That it does not find favour with me because I do not believe it is the function of the Court to divide non existent assets does not mean that raising it with the Court in the circumstances was unreasonable.

9. I note the submission concerning a failed application at the last minute for an order for sale of a property and note that it took some time during the proceedings but not much.  I do not upon a consideration of the conduct of both parties find that that fact is determinative of an entitlement to an order for costs alone or in combination with any other of the wife’s submissions.

10. The husband points to the findings of the Court as to the manner in which the wife conducted herself as a witness and they are set out in my judgment.  They are matters which would mitigate the effect of the matters referred to in the preceding paragraph.

11. The husband points to the failure of the wife’s submission that a possible prospective entitlement of the husband to a share in his mother’s estate upon her death (she then living) should be taken into account by reason of it being highly speculative is a matter which I will take into account in the exercise of my discretion in this matter.

12. In general, the husband also points to other findings unfavourable to the wife and then discusses her evasive conduct in the witness box and the nature of certain inaccurate evidence which she permitted to be put before the Court.  In his submission the husband acknowledges that his performance as a witness was not beyond reproach but says that by comparison it was superior to that of the wife.  I agree that this was so.

    (d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court

13. There is no procedural inadequacy alleged by either party which would be determinative of whether an order should be made, and none is alleged in submissions made to me on this issue.

    (e)whether any party to the proceedings has been wholly unsuccessful in the proceedings

14. No party has been wholly unsuccessful in the proceedings.

    (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

15. I refer to my findings on this subject already made.

    (g)such other matters as the Court considers relevant

16. The application of the husband for an order for costs of these proceedings is dependent on the failure of the wife in relation to the application.

17. I do not think that the application was unreasonably made although she has not succeeded and I propose to dismiss her application.

18. I propose in the exercise of my discretion to make no order that the wife pay the husband’s costs of and incidental to her application for costs.

I certify that the preceding thirty-two (32) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Fowler.

Associate:

Date:  6 August 2009