Munton and Munton [No 2]

[2018] FCWA 48

JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA

ACT: FAMILY LAW ACT 1975

LOCATION: PERTH

CITATION: MUNTON and MUNTON [No 2] [2018] FCWA 48

CORAM: DUNCANSON J

HEARD: WRITTEN SUBMISSIONS

DELIVERED : 5 APRIL 2018

FILE NO/S: PTW 5578 of 2015

BETWEEN: MS MUNTON

Applicant

AND

MR MUNTON

Respondent

Catchwords:

COSTS - Party wholly unsuccessful in aspects of the case - Offers - Contribution to costs in fixed amount

Legislation:

Family Law Act 1975 (Cth) s 117

Category: Reportable

Representation:

Counsel:

Applicant	:	Ms T Farmer
Respondent	:	Mr N Marsh

Solicitors:

Applicant	:	Lewis Blyth & Hooper
Respondent	:	Swan River Law

Case(s) referred to in decision(s):

Browne v Green (2002) FLC 93-115

Collins and Collins (1985) FLC 91-603

Fitzgerald v Fish (2005) 33 Fam LR 123

I and I (No 2) (1995) FLC 92-625

WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT - PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED

1On 30 May 2017 I delivered reasons for judgment in proceedings between the wife, [Ms Munton] and the husband, [Mr Munton].

2I did not make orders at that time. I gave the parties an opportunity to consider the findings with a view to submitting a joint minute of proposed orders to give effect to my reasons.

3The parties were unable to agree a joint minute. The matter came before me on 3 November 2017 and I made orders on that date.

BACKGROUND

4At trial the wife proposed that the husband transfer to her the [Sunny Drive] property and she transfer to him her interest in the [Cloudy Drive] property, the [Cranberry Grove] and [Darley Dale] properties. The [Greenfield Drive] property would be sold. The wife sought a splitting order of the husband's GESB superannuation such that she receive 100 percent thereof or in the alternative the Darley Dale property be sold and the proceeds divided to effect the percentage division sought.

5At the conclusion of the trial the wife sought a percentage division of between 55 and 60 percent of the parties' property to her. The property to be divided would include the husband's inheritance and other property which he sought to exclude, but exclude the capitalised value of his pension.

6The husband proposed to transfer the Sunny Drive property to the wife and she should transfer the Cloudy Drive property to him. He also proposed that the Greenfield Drive property be sold.

7The husband proposed that the wife transfer to him the Cranberry Grove property. He further proposed that she pay him a sum from her "undisclosed money" such that there be an equal division of the parties' property. Alternatively she should transfer the Darley Dale property to him or it be sold with the net proceeds divided to achieve an equal division. The husband proposed each party retain their superannuation entitlements and he retain his pension.

8In seeking an equal division of the parties’ property, the husband proposed that his inheritance, his camper trailer and the capitalised value of his pension be excluded from that property.

9I found that the total value of the parties' property amounted to $2,544,447. I included the husband's inheritance and his camper trailer.

10The capitalised value of the husband's pension was excluded by agreement at the commencement of the trial.

11I did not find that the wife was hiding money and I therefore did not find that she had "undisclosed funds". I found both parties to be truthful witnesses.

12In my reasons I determined that the overall distribution of property should be 52% to the wife and 48% to the husband.

13Taking into account assets and liabilities to be retained by each of the parties I ordered that the husband pay to the wife the sum of $398,913.

THE ORDERS SOUGHT

14The orders sought by the wife are contained in her submissions as to costs filed 1 December 2017. She seeks an order that the husband pay her costs in the sum of $58,852 being $41,781 for solicitor's fees, $2,551 for disbursement costs (excluding mediation costs) and $14,520 for counsel's fees.

15The husband requests that the wife pay $38,000 to him to assist with payment of his legal costs. This request is contained within a letter filed 2 January 2018 containing his reasons for rejecting the order sought by the wife.

THE LAW

16Section 117(1) of the Family Law Act 1975 (Cth) ("the Act") provides that, subject to s 117(2), each party to proceedings shall bear his or her own costs. Section 117(2) provides that if the Court is of the opinion there are circumstances that justify it in doing so, the Court may, subject to s 117(2A), make such orders as to costs as it considers just. Section 117(2A) provides as follows:

In considering what order (if any) should be made under subsection (2), the court shall have regard to:

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

(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;

(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;

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

(e)whether any party to the proceedings 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; and

(g)such other matters as the court considers relevant.

17The Full Court of the Family Court of Australia in Collins and Collins (1985) FLC 91-603 described the discretion conferred by s 117 as being a "broad" one, and noted that the s 117(2A) factors are not to be read in a restrictive way. The Full Court said in I and I (No 2) (1995) FLC 92-625 at 82,277, the relevant matters in s 117(2A) "must all be taken into account and all balanced in order to determine whether the overall circumstances justify the making of an order for costs". The Full Court in Fitzgerald v Fish (2005) 33 Fam LR 123 also made clear that any one of the factors referred to in s 117(2A) may be the sole foundation for an order for costs.

18It is necessary for me to take into account all of the relevant matters in s 117(2A) and balance them to determine whether the overall circumstances justify making an order as to costs.

Section 117(2A)(a)

19The parties' financial circumstances are as set out in my reasons. Both parties are in a positon to meet a costs order should one be made.

Section 117(2A)(b)

20Neither party to the proceedings is in receipt of assistance by way of Legal Aid.

Section 117(2A)(c)

21This concerns the conduct of the parties as litigants in these proceedings.

22The wife submits the husband did not make full and frank disclosure of his financial affairs. She further submits he failed to engage in the proceedings for many months resulting in a springing order for her to proceed on an undefended basis.

23The husband says the wife ignored his requests for mediation and his attempts at negotiation.

Section 117(2A)(d)

24Not applicable.

Section 117(2A)(e)

25An aspect of the proceedings in respect of which the husband was wholly unsuccessful was his attempt to exclude his inheritance and his camper trailer from the property to be divided. The inheritance comprised a Commonwealth Bank account holding $94,000 and [shares] worth $129,450. The camper trailer was valued at $2,500.

26I did not exclude those items, I found they were property in which the husband had an existing interest and I took account of the source of funds in the bank account, the shares and acquisition of the camper trailer when considering the parties' contributions.

27At trial the husband asserted the wife had undisclosed funds or cash reserves held on her behalf by her father. She was cross-examined at length about this. I accepted her explanations and rejected the husband's assertion. In this aspect of the case too, the husband was wholly unsuccessful.

28Following the delivery of my reasons the parties were unable to agree a joint minute of proposed orders. A further hearing was necessary on 3 November 2017. At the hearing the husband sought to re-agitate issues determined at trial for example his inheritance and the wife's "missing cash". He also sought to raise matters which were not the subject of evidence at trial. In these respects the husband was again wholly unsuccessful.

29The husband's position with respect to these matters caused the wife to be put to additional expense.

30This is a circumstance justifying an order for costs.

Section 117(2A)(f)

31In Browne v Green (2002) FLC 93-115 at [57], the Full Court emphasised the importance of offers. 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. It is clearly a circumstance that would justify the making of an order for costs in favour of the husband.

32In her submissions the wife refers to a history of offers made during the period from December 2013 to date of trial. She annexes to her submissions a number of offers made by her together with responses and counter offers received from the husband. I have considered these offers very carefully. It is not possible for me to analyse each offer to ascertain its reasonableness and the wife's submissions do not assist me in that respect.

33The earlier offers refer to percentage divisions, but do not contain the values to be attributed to all of the property that it is proposed to divide.

34It was not until May 2016 that the valuations of the parties' respective superannuation interests were obtained.

35The subsequent offers of both parties do not contain values of all items of property, and it is not clear if the capitalised value of the husband's pension is included in the total of the property to which the proposed percentages are applied. For example a letter dated 16 June 2016 from the wife's solicitors to the husband does not contain values although it refers to a schedule of assets and liabilities which did not form part of the wife's submissions. It may be that it is merely an omission but in any event, for reasons set out below, I am unable to ascertain the reasonableness or otherwise of this offer.

36In a letter dated 6 September 2016 from the wife's solicitors to the husband the wife offers to retain the Sunny Drive property, the funds in her sole Commonwealth Bank account, her GESB and West State superannuation funds and the husband's GESB West State superannuation fund.

37She proposes that the husband retain all of the other properties, bank accounts in his name, his pension, his motor vehicle, camper trailer and household contents.

34She proposes a cash adjustment then be made to effect a 50/50 split of the parties' property.

35The wife offers to exclude from the asset pool the husband's inheritance, being $94,000 in the bank account and the shares.

36On the face of it this appears to be an offer containing an outcome more favourable to the husband than that ordered by me because:

•upon the offer the percentage division is an equal one, whereas I ordered a percentage division, 52% to the wife and 48% to the husband; and

•the husband’s Commonwealth Bank account $94,000 and his shares $129,450 were excluded and would not have been taken into account in calculating the percentage division, whereas I included them.

37The husband responded at length to the wife's solicitor's letter maintaining that the wife was dishonest and had hidden funds and he sought payment of a share from her "secret superannuation account".

38I am unable to ascertain from the content of the letter dated 6 September 2016 what values were attributed to the items of property, whether the capitalised value of the husband's pension was included in the overall total and therefore what the outcome of an equal division would be.

39I assume the capitalised value of the husband's pension was included in the property to be divided because it was not until commencement of trial that both parties agreed with the approach not to treat the value ascribed to the husband's pension as an asset in that amount.

40I take this into account when considering whether it was reasonable or not for this offer to be accepted because the inclusion of the capitalised value of the pension would have the effect of significantly increasing the total value of the property to be divided in comparison to the value of the parties' property as I found it to be.

41Although it appears both parties made several attempts to settle the matter prior to trial, I am not persuaded that the offers are of sufficient clarity to amount to a circumstance which justifies the making an order for costs in favour of a party.

Section 117(2A)(g)

42No other matters are relevant.

CONCLUSION AS TO COSTS

43The husband's lack of success in significant aspects of the case is a circumstance justifying an order for a contribution by him to the wife's costs. I intend to fix the sum to be paid by the husband, to avoid the expense and further work involved in an assessment of costs by a registrar.

44The amount which the husband should contribute to the wife's costs should go some way to compensate her for costs incurred in parts of the proceedings in relation to which he was wholly unsuccessful.

45In the exercise of the broad discretion which I have I intend to order that the husband pay to the wife the sum of $7,500. I consider this to be an order which is just in the circumstances.

THE ORDERS

1The husband shall contribute to the wife's costs in the sum of $7,500 payable within 42 days.

2The applications of the parties for costs are otherwise dismissed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Family Court of Western Australia.

RM
ASSOCIATE

13 APRIL 2018