Mallard and Mallard (Costs)

[2012] FamCA 523

FAMILY COURT OF AUSTRALIA

MALLARD & MALLARD (COSTS) [2012] FamCA 523

FAMILY LAW – COSTS –  Wife refused offer which was superior in benefit than the Orders made by the Court

Family Law Act 1975 (Cth)

APPLICANT: Mr Mallard

RESPONDENT: Ms Mallard

FILE NUMBER: SYC 6101 of 2007

DATE DELIVERED: 9 July 2012

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Fowler J

HEARING DATE: Dealt with by written submissions

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Tockar

SOLICITOR FOR THE RESPONDENT: Mr Meyer

Orders

1. The wife pay toward the husband’s costs of an incidental to the proceedings determined by the judgment of 16 November 2011 and of these proceedings for an order for costs the sum of $20,000, such sum to be a charge on the second payment due by the husband to the wife pursuant to the Orders of this Court made on 16 November 2011 and be paid by instalments of $1,000 per week after payment of the first $30,000 of that said sum of $50,000 being the balance payable under Order 3 of that date.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Mallard and Mallard (Costs) 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: SYC 6101 of 2007

Mr Mallard

Applicant

And

Ms Mallard

Respondent

REASONS FOR JUDGMENT

Introduction

1. Before the Court is an Application by the husband in these proceedings for orders for costs in relation to proceedings between the parties for alteration of property interests.  Those proceedings were determined by a judgment delivered on 16 November 2011 which should be read in association with this judgment as if incorporated herein.

2. The application is brought relying significantly on an offer made to resolve the matter prior to hearing which would have, if it had been accepted, provided the wife with a better result than she procured from the judgment.  There are however a number of matters for the Court’s consideration.

Background facts

1. The Background Facts relating to the marriage of the parties and the primary application are set out in the judgment referred to above and it is not intended to repeat them.

2. Although a subsequent Further Amended Application was filed, the husband seeks orders in accordance with his Amended Application in a Case filed on

   
   

   27 January 2012 in which the husband sought the following orders namely:

   1.That the Respondent Wife pay the costs of the Applicant Husband as and from the 13^th May, 2011 such costs of an incidental to the property settlement proceedings to be agreed or as taxed (sic) such proceedings being commenced by the Respondent Wife by her filing an application for  final orders on 29^th August 2007.

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 sections of that section namely:

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

1. In this case the financial position of the parties was the subject of discussion in the primary judgment.  The net asset pool was found at the amount of $2,572,324.  It was found that the earning capacity of the wife was significantly less than that which could be commanded by the husband.  The wife was found to have debts due to her parents and in relation to a mortgage on M Street which was procured to fund the proceedings before the Court.  The husband has contingent taxation liabilities and a liquidator’s claim.  They were not at the time of the judgment a crystallized liability of the husband.

2. The wife it seems will be unlikely, having regard to the evidence in the case, to be able to generate income from her property received as a result of the Orders of the Court.

3. The wife was actively seeking work at the time of the hearing but was unemployed.

4. The husband conceded that there was a need for an adjustment in favour of the wife albeit different to that made by the Court taking into account her inferior financial position.

5. There is no evidence that the inferior position of the wife has changed.  The wife would have a capacity to meet an order in the event that the monies required to be paid by the husband as part of the alteration of property interests were applied to that purpose.

(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

1. Neither 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

1. The wife admitted facts and then withdrew her admissions.  The argument on that application took but a small amount of time but time spent unnecessarily had attention been paid to the effect of a failure to deny.

2. The wife did not finally provide details of the order she sought until the hearing.

3. The wife is applauded in reducing the issues for consideration on the balance sheet but complaint is made that the timing was expensive for the husband it being only done on trial.

4. There is no doubt that proceedings can be better managed if the issues are reduced prior to trial.  The wife sought orders for lump sum maintenance even though there was no claim for spousal maintenance before the Court.

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

1. There is no submission made to this effect by the husband.

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

1. Neither party has been wholly unsuccessful in the primary proceedings but the wife was wholly unsuccessful in proceedings commenced by her to re-open her case after judgment was reserved.

(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. An offer was made by the husband on 31 May 2011 which offer was superior in benefit to the wife than the Orders made by the Court.

2. The wife asserts that her refusal of the offer was justified by reason of her inability to know the context in which the offer was made that is to say to have a full appreciation of the nature and value of the assets then held by the parties and so it was impossible for her to determine its fairness.

3. The offer of the husband mirrors the Orders made by the Court except that in lieu of receiving the sum of $300,000 as proposed by the offer she will only be entitled to a sum of $150,000.

4. It would seem that the refusal of the offer by the wife has bestowed upon the husband a benefit to the extent of $150,000 when compared to the amount to be outlaid under his proposal.

5. The husband has, it is asserted, since incurred legal fees in the sum of $181,174 but it is not known whether a formal assessment would vary that amount.  In any event, on the face of it, the husband has suffered a loss of $31,174.

6. The husband contends that after many years of litigation the wife was fully aware of all the financial circumstances and was in a position to make a considered decision on the offer.

7. The wife’s assertion to the contrary is not accepted as and from the filing of

   
   

   Ms W’s (the independent expert) affidavit on 19 July 2011.

8. The wife’s assertion that the evidence had to be tested by cross-examination before she could reasonably accept it is not accepted having regard to the opening of her counsel as to what was in issue at the time of the hearing.  There was little complaint about Ms W’s findings.

(g)    such other matters as the Court considers relevant

1. The wife’s claims, it was asserted, were at the outset unrealistic and having regard to the assets as found that appears to be so.  Her claim was valued at about $8,400,000 in her hands an amount many times larger than the asset pool as found.

2. However the Court will accept that at the outset there was a degree of ignorance of the husband’s position.  The offer of the husband did not have a prescribed time within which it was to be accepted.

3. Taking into account all those matters which by the Act I am required to take into account, and noting that whilst the applicant’s argument in relation to a proposal for settlement made by him is strong, it seems that he benefited to some extent by reason of its refusal by the wife. The making of an offer, whilst important, is not determinative of the exercise by the Court of its broad discretion having regard to the other matters it is required to take into account.

4. The Court proposes to make an order for costs but proposes to limit them as set out, which order in the exercise of my discretion I consider just and proper having regard to the matters referred to.

I certify that the preceding twenty-nine (29) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Fowler delivered on 9 July 2012.

Associate: 

Date:  9 July 2012