Panton and Panton

[2013] FCCA 2263

FEDERAL CIRCUIT COURT OF AUSTRALIA

PANTON & PANTON [2013] FCCA 2263

Catchwords:
FAMILY LAW – Property – treatment of increase in mortgage post-separation – inheritance – superannuation – pool larger than non-superannuation pool –treatment of addbacks – application for costs.

Legislation:

Family Law Act 1975, Pt.VIII, ss.4, 75, 79, 81, 117
Federal Circuit Court Rules 2001, sch.1

C & C (2005) FLC 93-220
Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143
Stanford & Stanford [2012] HCA 52
Bevan & Bevan [2013] FamCAFC 116
Bishop & Bishop (2013) FLC 93-553

Applicant: MS PANTON

Respondent: MR PANTON

File Number: CAC 304 of 2010

Judgment of: Judge Harland

Hearing date: 5 September 2013

Date of Last Submission: 10 December 2013

Delivered at: Darwin

Delivered on: 23 December 2013

REPRESENTATION

Counsel for the Applicant: Mr Howard

Solicitors for the Applicant: Armstrong Legal

Counsel for the Respondent: Self represented

ORDERS

ORDERS

THE COURT ORDERS:

1. That within 60 days of the date of these Orders the husband pay to the wife the sum of $80,657.14 (“the payment”) plus $8,124.50 for the wife’s costs.

2. That contemporaneously with the payment referred to in Order (1) the husband is declared to be the sole owner of the property situate at and known as Property M in the Australian Capital Territory (“the property”).

3. That if the whole of the payment has not been made within *60 days of the date of these orders:

   (a)Within 7 days of the date of these orders the husband and wife do all things necessary to effect the sale of the property situate at and known as Property M in the Australian Capital Territory (“the Property”).

4. That for the purpose of order (3)(a):

   (a)That failing agreement within 7 days from the date of these orders as to the real estate agent to be appointed the joint sales agent (“joint agent”) for the purpose of effecting the marketing and sale of the Property by private treaty, the wife’s nominated agent shall be appointed the joint agent;

   (b)That failing agreement within 7 days of the date of these orders as to the conveyancing solicitor to be appointed, the wife’s nominated conveyancing solicitor shall be appointed the joint conveyancing solicitor for the purpose of preparing necessary documents to progress the sale of the Property;

   (c)The market value of the Property is $440,000 or such value as determined by the joint agent taking into account advice from the agent;

   (d)If the Property is not sold within 3 months of the date of these orders or it the Property is sold and the sale subsequently does not proceed to completion the husband and wife do all things necessary to offer the property immediately for sale by public auction by the agent, the reserve price being the market valued determined in accordance with recommendations of the agent and failing agreement an updated valuation from an agreed valuer or failing agreement from (omitted] Valuations with the cost of the valuation to be shared equally and in the event the husband fails to provide the funds necessary for the valuation then the wife’s nominated valuer shall be appointed for the purpose of auction and the husband shall reimburse the wife an amount equivalent to his 50% share of the cost of the valuation;

   (e)The husband and wife execute all documents requested by the agent as auctioneers for sale of the Property by auction;

   (f)The husband and wife execute a contract sale;

   (g)The husband and wife cooperate in every way with the agent in relation to the auction of the Property including making the keys available for an inspection of the Property including making the keys available for inspection of the Property at times requested by the agent and ensuring that the Property is in a clean and tidy condition at the time of inspection by the prospective purchasers;

   (h)If the Property is not sold at the auction or within 21 days thereafter the husband and wife shall meet the market price and sell the Property at the best price then obtainable;

   (i)During the period that the Property is being offered for sale the husband shall allow prospective purchasers to inspect the Property at all reasonable hours by appointment.

   (j)That the husband and wife do all things necessary to cause the proceeds of the sale of the Property to be distributed as follows:

   (i)To pay all costs, commissions and expenses of the sale;

   (ii)To pay the usual rates adjustments;

   (iii)To pay the amount required to discharge the Mortgage;

   (iv)To pay an amount to the wife calculated in accordance with the formula set out in order (4)(k) below;

   (v)To pay the balance to the husband, if any.

   (k)The amount payable to the Wife pursuant to order (4)(j)(iv) is to be determined in accordance with the following formula:

   A = [63% x (B + C)] – D [63% x (B + C)]  *(63% x B)+C –D **E

   Where

   A = The amount payable to the wife

   B = The net proceeds of sale of the ** property after payment of the amounts set out in order (4)(j)(i) to (v) inclusive  **(accepted offer $425,000 less mortgage of $330,000 stated in paragraph 8 of the Judgment less the sale expenses).

   C = costs payable to the wife of $8,124.50 if such sum remains outstanding

   C = $43,189, C = $43,189, *D = $43,189, **$86,578 being the net total of all **non-superannuation assets and liabilities **(excluding the property and mortgage pursuant to paragraph 8 of the Judgment). to be retained by the wife.

   **D=$43,187, being the net amount of assets in the wife’s hands

   **E =$8,124.50, being the Order for costs made pursuant to Order 1 of the Orders.

5. That if either party refuses, fails or neglects to execute any document necessary to put these Orders into effect 14 days after being requested to do so, and any such refusal, failure or neglect is proved by affidavits filed and served by or on behalf of the party alleging this, the Registrar of the Federal Circuit Court at Canberra be and is hereby appointed pursuant to section 106A of the Family Law Act1975 to execute such document in the name of such party.

6. That in accordance with section 90MT(1)(a) of the Family Law Act1975 (“the Act”), whenever a splittable payment within the meaning of section 90ME of the Act becomes payable to or on behalf of Mr Panton, (date of birth; (omitted) 1962) (“the husband” from his interest in the (omitted] Superannuation Scheme (“the Fund”), Ms Panton (“the wife”) be entitled to be paid by the trustee of the Fund (“the Trustee’) the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations2001 using a base amount of $153,980.78 and that there be a corresponding reduction in the amount the husband would be entitled to receive but for these Orders.

7. That the operative time for * Order 6 be 7 business days after the service of these Orders on the Trustee.

8. That the Trustee, in accordance with the obligation set out under the Act and Family Law (Superannuation) Regulations 2001, do all such acts and things and sign all such documents as may be necessary to calculate the entitlements of, and make to, the wife in accordance with these Orders.

9. That except as otherwise provided in these Orders the wife and the husband are entitled to be the sole legal and beneficial owners of all items or property including money, motor vehicles, insurance, equities, superannuation entitlements and personal effects currently in the name, possession or control of each of them respectively as at the date of these orders.

NOTATION: 

These orders have been amended by way of the slip rule pursuant to rule 16.05(2)(e) of the Federal Circuit Court Rules2001 on 9/01/2014, 20/01/2014 and 4/03/2014. (See end of judgment for corrections.)

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT CANBERRA

CAC 304 of 2010

MS PANTON

Applicant

And

MR PANTON

Respondent

REASONS FOR JUDGMENT

Introduction

1. This is an application by the wife for property adjustment. Judge Brewster previously granted the wife leave to proceed with her application for property settlement out of time on 31 August 2012.

2. The husband was born on (omitted) 1962 and is 51 years old.

3. The wife was born on (omitted) 1961 and is 45 years old.

4. The parties married on (omitted) 1987. They separated on 21 November 2008. Their divorce order became final on 5 June 2010.

5. There are 2 children of the marriage X born (omitted) 1993 aged 20 and Y born (omitted) 1998 aged 15. X lives independently. Y has lived with his father since the parties separated.

The husband’s case

1. The husband was self-represented at the hearing. The hearing was originally listed on 24 April 2013. The wife sought and was granted an adjournment due to the husband raising an issue where he alleged his father had loaned the parties money.

2. I allowed the husband to hand up a written statement he prepared, without objection from the wife. He was still trying to argue the leave issue which has already been determined.

The wife’s case

1. The wife issued several subpoenas. The husband was on notice of this but did not inspect any of the documents. The wife’s counsel had to take the husband to various documents and specific figures in those documents during cross-examination because he would not accept the figures and had not inspected the documents. The husband’s attitude was unreasonable. One example of this was the wife’s contention that she had received an inheritance of approximately $80,000 which was used towards the purchase of a property. The husband required proof. As it turned out the wife’s inheritance was $85,000.00.

Assets and liabilities

Assets	Owner	Value
Property M property	Husband	$440,000
Investments	Husband	$81,495
Investments	Wife	$41,677
Household contents	Husband	$5,000
Household contents	Wife	$5,000
Yamaha motorbike	Husband	$4,500
SUBTOTAL	$577,672
Liabilities
Mortgage secured over Property M property	Husband	$330,000
Margin Loan	Husband	$47,604
Student Loan	Wife	$3,490
SUBTOTAL	$381,094
Superannuation
(omitted) Fund (value from valuation by Mr P) as at 2/11/2011	Husband	$258,198
(omitted) Retirement Plan	Husband	$12,557
(omitted) Retirement Plan	Wife	$44,851
SUBTOTAL	$315,606
NET TOTAL (NOT INCLUDING SUPERANNUATION)	$196,578
NET TOTAL (INCLUDING SUPERANNUATION	$512,184

Issues in dispute

1. The following were the main issues in dispute:

   a)The husband alleged his father provided him with money during the relationship;

   b)The husband disputed the amount of the wife’s inheritance;

   c)The husband disputed how the inheritance was used;

   d)The husband alleged the wife took $60,000 after separation which she has not accounted for;

   e)Whether or not the husband’s credit card debts acquired post separation should be included in the pool;

   f)How the increase in the mortgage post separation should be dealt with;

   g)The treatment of superannuation;

Assertion that the husband’s father gave him money

1. The husband asserts that his father lent the parties $48,000 which was either used to purchase the (omitted) property or pay the mortgage out on it. The wife denies that his father ever provided any funds. The husband did not produce any evidence to support this claim. He did not call his father as a witness and did not produce any documents. I find that the husband’s father did not provide the parties with any funds.

The husband’s credit cards

1. The husband conceded during cross-examination that he acquired his credit card debts post-separation. The wife has not benefited in any way from this and has not had any say with respect to this expenditure. In those circumstances it would be unfair to include them in the pool.

The increase in the mortgage post separation

1. There was a dispute between the parties as to what amount should be taken into account for the mortgage. It is agreed that the mortgage at separation was $275,000. When the property was transferred to the husband in 2011, he increased the mortgage to $290,000. The current mortgage is approximately $330,000.

2. The husband says he used part of those funds to pay his lawyers.

3. The husband says he has carried out some improvements on the property but it seems that the main reason why the mortgage has increased is that the husband has not made sufficient payments to cover the interest repayments. He conceded that the wife did not receive the benefit of any of those funds.

The amount of the wife’s inheritance and how that inheritance was used

1. The wife’s inheritance of $85,000 received in December 1997 is a significant contribution given the modest size of the pool.

2. For the April hearing, the husband accepted that the amount of the wife’s inheritance was $80,000. However he put the sum in dispute at paragraph [27] of his affidavit filed on 22 July 2013. If the husband had troubled himself to inspect the subpoenaed documents before the hearing, he would have been able to satisfy himself that the actual amount of the inheritance was $85,000 and how it was used. It is clear from the documents that the inheritance was put towards the purchase of the property they bought in (omitted).

The $60,000 the husband alleges the wife took

1. The husband alleges that the wife took $60,000 on 17 September 2007. The husband said that his lawyers had provided documents showing she took that money in 2007. When faced with the letter from his lawyers, being Exhibit “A5” he had to concede that there were no documents provided dating back to 2007. The husband knew it was disputed and that he was required to produce documents. A notice to produce was served on him which he did not comply with. He claimed he thought it was covered in the subpoenaed documents. That does not absolve him of his responsibility. Furthermore, he could not possibly know this as he did not inspect the documents produced under subpoena.

2. Then later whilst cross-examining the wife, the husband produced a document which showed $60,000 gathered on 17 September 2007 with respect to the (omitted) investment account. It does not show who took the money. On examination of further documents it became clear that the wife had produced documents with respect to the sum of $41,500 which appears to have been part of the $60,000 sum. All of it relates to the pre-separation period and is not relevant.

3. The husband alleged that the three payments of $3,000 the wife paid into the joint account in 2011 were in part repayment of the $60,000. The wife says she paid those sums as the husband asked her for financial assistance with the mortgage repayment. I prefer the wife’s evidence in this instance.

Superannuation

1. The husband works for (employer omitted). He has a defined benefit superannuation fund. It was valued on 2 November 2011 for $258,000. That is the only evidence of value I have before me. The husband filed a financial statement on 22 July 2013 wherein he stated his superannuation was worth $5,857. He said that is the figure he would receive if he resigned whereas the other figure is its value upon his retirement.

2. Exhibit “A3” is a document from (omitted) evidencing the husband instructing (omitted) to divert the wife’s dividend payments on her investment from herself to the parties’ son. Significantly he did this after the wife commenced these proceedings.

3. The husband was clearly bitter and resentful of the wife being able to bring proceedings at all. He says they had an informal property settlement and he abided by that. I am not satisfied that there was such an informal arrangement. Even if there was, on the husband’s own case the outcome was not just and equitable as the husband has a significant amount of superannuation and an adjustment needs to be made for that.

Other contributions

1. The wife concedes that the husband made an initial contribution of about $40,000 which he received from a compensation payment. He had a small amount of superannuation but there are no figures with respect to this.

2. The parties have two children. X is now an adult living independently and Y who lives with the husband. Y has lived with the husband since the parties separated. For a period of time post separation X lived with the wife.

Section 75(2) factors

1. The wife is currently unemployed. She conceded during cross-examination that she has not looked for work since June 2013 when she finished employment at a (employer omitted). She said she needed a break. When she has worked she has earned up to approximately $50,000.

Presentation of witnesses

1. At the beginning of the hearing the husband resiled from his agreement with respect to the value of the home. He had agreed to this value at the April 2013 hearing. As he resiled from this position, and there is no valuation of the home. I indicated that the only choice open to the Court is to order the sale of the property. At the end of the day the husband reversed his position. He tried to say he only objected to the amount of the mortgage to be taken into account. This is incorrect as the transcript indicates. Once he realised that I would be ordering the sale of the property he changed his position and accepted the formerly agreed figure.

2. Neither of the parties were impressive witnesses. Neither party properly complied with their duty of disclosure. Neither was able to provide an adequate explanation for this. The wife was legally represented throughout the proceedings. The husband was legally represented until August 2012.

Submissions

1. The wife submitted that if it were not for the husband’s initial contribution and her inheritance the contributions would be equal. As the inheritance represents a significant portion of the pool, she submits that she should receive a differential of 10% in recognition of that.

2. The husband handed up a document at the April hearing entitled Terms of Settlement or Consent Orders. He raised the issue of lump sum child support in that document. There is no child support departure application before the court. The wife has paid child support in accordance with child support assessments which have issued from time to time.

3. The husband claimed that the mortgage increased because he has the care of Y and that he has made repairs on the house. There is no evidence about this. The mortgage has increased by almost $54,000.

Legal principles

1. Part VIII of the Family Law Act1975 is the part of the Act dealing with property, spousal maintenance and maintenance agreement. The major provisions relating to marital property division are contained in sections 79(1); 79(2); 79(4); & 75(2) of the Act.

2. Pursuant to section 79(1) the court is authorised to make such order as it considers appropriate in order to alter the interest of the parties to a marriage in relevant property.

3. The expression “property” is defined in section 4(1) in relation to the parties to a marriage or either of them as meaning “…property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion.”

4. Pursuant to section 79(2) the court is actively prevented from making such an order unless it is satisfied that it is just and equitable to do so in all the circumstances prevailing. This follows from the use of the prohibitory words “shall not” in the relevant section.

5. Section 79(4) provides the mechanics of how a court is to make an order altering marital property interests.

6. Paragraphs (a); (b); and (c); categorise contributions made by marital partners, which are relevant.  Paragraph (d) directs the court to take into effect of any order upon the earning capacity of either party to the marriage concerned. 

7. Paragraph (e) directs the court to consider a list of matters contained in section 75(2), which are germane to spousal maintenance or the prospective positions of the parties concerned by reference to their respective financial resources, means and needs. Finally, paragraphs (f) and (g) apply to child support and previously made parenting orders, as relevant. There is some overlap between these various provisions and not all will be applicable in every case.

1. Until recently, the position in respect of the process to be applied to the resolution of matrimonial property cases was said to be well settled with a preferred approach as set out by the Full Court in Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143 at 78,386 [39].

2. The High Court has recently considered the operation of section 79 in the matter of Stanford & Stanford [2012] HCA 52.In the case, the majority stated at [35]-[36] that:

   “It will be recalled that s 79(2) provides that "[t]he court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order". Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.

   The expression "just and equitable" is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.” [Footnotes omitted]

3. The High Court to propound that three fundamental propositions with respect to the application of section 79, which can be summarised as follows:

   1.Firstly, in order to ascertain whether it is just and equitable to make a property settlement order, it is necessary to identify the existing legal and equitable interests of the parties in the property. The High Court emphasised the word existing.

   2.Secondly, although section 79 gives the court a broad power to make property settlement orders it may not be exercised in an unprincipled fashion. There must be no assumption that the parties’ interests are or should be different to their existing interests.

   3.Thirdly, when considering whether making a property settlement order is just and equitable the court must not assume that one or the other party has the right to a property adjustment order. The court must give separate consideration to section 79(2) in addition the matters referred to section 79(4).

4. In Stanford & Stanford the High Court indicated that, in the vast majority of matrimonial property cases, the requirements of section 79(2) will be readily satisfied, largely as a result of a consideration of the circumstances of the parties concerned, particularly the nature of their separation.

5. The High Court also pointed out that what is just and equitable is different in every case.

6. Stanford & Stanford casts doubt on the correctness of adding back notional amounts to the pool for the purposes of property settlement. The Full Court confirmed this in Bevan & Bevan [2013] FamCAFC 116. The Full Court said at paragraph [79]:

   “We observe that “notional property”, which is sometimes “added back” to a list of assets to account for the unilateral disposal of assets, is unlikely to constitute “property of the parties to the marriage or either of them”, and thus is not amenable to alteration under s 79.  It is important to deal with such disposals carefully, recognising the assets no longer exist, but that the disposal of them forms part of the history of the marriage – and potentially an important part.  As the question does not arise here, we need say nothing more on this topic, save to note that s 79(4) and in particular s 75(2)(o) gives ample scope to ensure a just and equitable outcome when dealing with the unilateral disposal of property.”

7. In my view in light of Stanford & Stanford and Bevan & Bevan, it is not appropriate to addback notional property which no longer exists. The proper course is to make an adjustment pursuant to section 75(2)(o). In my view this is appropriate because it reflects the reality of the situation and achieves the same outcome.

8. The issue the treatment of inheritances has been addressed in many cases, most recently by the Full Court in Bishop & Bishop (2013) FLC 93-553.

9. The Court should adopt a two pool approach referred to in C & C (2005) FLC 93-220 with superannuation assets separately due to the superannuation constituting a significant percentage of the total pool and the husband’s superannuation entitlements in particular being a defined benefit interest.

Application of Legal Principles to the facts of this case

1. I am comfortably satisfied in the circumstances of this case that it is just and equitable to make orders adjusting the parties’ property interests. Section 81 of the Family Law Act1975 is significant here. The business and the former matrimonial home are currently in joint names. Neither party can move on until this is addressed.

2. The wife’s inheritance is a significant contribution by her. The husband did not contribute to the inheritance. The wife used the inheritance for the benefit of both parties by putting it towards the purchase of real estate. This requires an adjustment in the wife’s favour.

3. The husband has had primary care of Y since the parties separated and will continue to do so. The wife had primary care of X for part of the post separation period. This requires a slight adjustment for post separation contributions in the husband’s favour.

4. Taking into account the whole of the evidence, I assess the wife’s contributions to be 60% and the husband’s contribution to be 40%.

5. With respect to the section 75(2) factors, the relevant issues are the respective earning capacities of the parties, the care of Y from the time of the hearing until he turns 18 and child support are relevant to these factors.

6. The husband earns $83,000 a year. When the wife last worked she earned approximately $50,000 a year. The wife worked in different areas during the relationship. The wife has always earnt less than the husband. This requires an adjustment in her favour.

7. The husband has increased in mortgage from $275,000 to $330,000 since separation.  It was the husband’s decision to refinance the mortgage in 2011 and pay stamp duty in order to transfer the property into his sole name. It is clear from the evidence that he was aware that if he entered into consent orders or a binding financial agreement with the wife, no stamp duty would have been payable. The husband did not give an adequate explanation of this and in large part it appears to be due to his not keeping up with the required interest repayments. The husband has had the benefit of living in the home. The wife has had no control over the husband’s decision to increase the mortgage and should not be penalised for it.  The increase in the mortgage has reduced the assets available for division by the parties significantly. This requires an adjustment in the wife’s favour.

8. The husband receives a modest amount of child support in accordance with child support assessments which issue from time to time. Y is aged 15. He presumably will remain living primarily with his father until he turns 18. This factor requires a small adjustment in favour of the father.

9. Taking all of these factors into account, the wife will receive a further adjustment of 25% of the non-superannuation pool.

10. Turning to the superannuation pool. The husband has the bulk of the superannuation primarily in a defined benefit fund. Unfortunately, I have not been provided with a current valuation. The valuation I have was prepared on 2 November 2011. Presumably the father’s superannuation interests have increased since then. Although no submission was made about this, I accept that the wife has not contributed to the husband’s superannuation since that date. In the circumstances of this case, I think it is just and equitable for there to be an equal division of the parties’ superannuation interests subject to my comments before.

11. I am required not just to focus on percentages but to also consider the impact of the orders in money terms. There is often a tension between the currently realisable assets pool and the superannuation pool. The husband seeks the opportunity to retain the home he is living in with Y. The wife is living in rental accommodation and would like to buy a house if she is able to take on a mortgage. Currently she is not working as she decided to take a break after her last job finished in June 2013. When she does find work it will be at a lower income than the husband’s. 

12. Whilst the superannuation pool is larger than the non-superannuation pool, it is still reasonably modest. The husband is aged 51 and the wife is aged 46. Neither will be able to access their superannuation for many years to come unless they are able to satisfy their superannuation funds’ conditions of release.

Invitation for further submissions

1. On 21 October 2013, I listed the matter and invited the parties to make written submissions about the division of the asset pool between the non-superannuation pool and the superannuation pool. I indicated that my findings on contributions and section 75(2) factors.

2. The wife sought an equal division of the superannuation. The husband’s position was not clear. I raised my concern that in order for justice and equity to both parties it would be necessary to a greater split of the superannuation pool and a lesser split of the non-superannuation pool. As this had not been raised at the hearing, I wanted to ensure that the parties received procedural fairness. It was not an invitation to reargue the merits of the case or to put on new evidence.

3. The wife filed her submissions late. The husband filed his submissions within the timeframe. Unfortunately neither party addressed the issue I raised which was the division of the non-superannuation and superannuation pool based on my findings and the disparity in the size of the two pools.

4. The wife provided a detailed minute of order which provides for a formula for the division of the proceeds of sale by way of a formula. The wife also made an application for costs. In the event that there was not enough in the non-superannuation pool to satisfy her claim and her costs application (if successful), she sought that the husband pay the remainder by instalments from his income.

5. The husband’s submissions misapprehend the purpose of submissions. I made it clear that the submissions were not an opportunity to reargue the merits of his case. Not only did the husband seek to do this, he also sought to adduce further evidence. This includes providing further response to the affidavit filed by the wife on 9 April 2013. The husband had ample opportunity to put all evidence he wished to rely on at the final hearing. This is impermissible for the husband to seek to adduce further evidence after the hearing has finished. The husband has not sought to reopen the case and the evidence he seeks to provide is not new and was available to him at the time of the hearing.

6. In my view it would be inequitable to leave the split of assets as I contemplated at 59 of my judgment. To leave it this way would mean the husband keeping his furniture and motorbike worth $9,500 and a small amount of cash depending on what is received from the proceeds of sale after expenses. This does not allow for costs of the sale of the home which the parties did not factor into the list of assets and liabilities placed before me at the hearing. The husband has the care of Y and should be left with some cash. He wants the opportunity to retain the home and I will give him that opportunity although it is most likely that the home will have to be sold. Therefore I am going to give the wife a greater proportion of the superannuation. I will make orders giving the wife 63% of the non-superannuation pool and 63% of the superannuation pool. This the same effect in dollar terms as the 85% / 50% split. I acknowledge that the nature of the assets in the two pools are difficult. This split provides a just and equitable outcome for both parties.

Costs

1. The wife makes an application for costs. The wife sets out the costs she has incurred at the scale set out in the Federal Circuit Court Rules 2001. The husband also seeks costs. The husband was self-represented at the hearing.

2. Section 117 of the Family Law Act1975 deals with costs. The normal rule is that each party pay for his or her own costs. This reflects the nature of family law proceedings which is different in character to other civil proceedings where the usual rule is that the costs follow the event. Section 117(2) states that the court may make the costs order if it is of the opinion that there is circumstances to justify such an order subject to subsections (2A), (4), (4A) and (5). In this case only subsection (2A) is relevant.

3. Section 117(2A) lists several matters the Court must have regard to when considering ordering costs. I will address each of these matters in turn.

4. In order for the Court to make a costs order in favour of the parties, there must be justifying circumstances as set out in section 117(2A) of the Family Law Act 1975:

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

1. The property pool is modest. The husband earns more that the wife. The husband represented himself for most of the proceedings.

(b) Whether any party to the proceedings is in receipt of assistance by way of legal aid

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 husband took an unreasonable stance at the hearing. The hearing in April could not go ahead because the husband raised new issues. He failed to inspect subpoenaed material before the hearing. If he had, he would not have challenged the amount of the inheritance the wife received as the documents clearly set it out. He failed to provide evidence of the alleged gifts from his father and was completely unsuccessful with respect to his argument about the $60,000.

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

1. Not applicable.

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

1. The husband was wholly unsuccessful.

(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. The wife seeks costs on the basis of making an offer dated 2 November 2012 which is annexed to her submissions. In summary that offer was to the effect that the wife receive a superannuation split from the husband of $80,000 and a cash payment of $100,000 from the husband. The wife would transfer her interest in the joint share portfolio to the husband. This offer was made well in advance of the April 2013 hearing. The letter of offer also put the husband on notice that if the offer was not accepted she would seek costs. It is clear from that offer that the husband would have been better off financially if he had accepted that offer.

Conclusion with respect to costs

1. I find that the husband should pay the wife’s costs as follows in accordance with the scale of costs set out at Schedule 1 of the Federal Circuit Rules 2001:

Hearing 24 April 2013	$2,991
Preparation for hearing	$1,000
Hearing 5 September 2013	$2,991
50% hearing fee	$560
50% superannuation fee & valuation	$252.50
50% property valuation	$330
TOTAL	$8124.50

1. This is not all the costs the wife is seeking but taking into account the fact that she had issues with her own evidence, I do not think it would be proper for the husband to pay all of her costs.

I certify that the preceding seventy six (76) paragraphs are a true copy of the reasons for judgment of Judge Harland

Date:         23 December 2013

CORRECTIONS

The orders have been amended pursuant to rule 16.05(2)(e) of the Federal Circuit Court Rules2001 to reflect the deletion of [63% x (B + C)]  and insertion of *(63% x B)+C - D and deletion of C = $43,189, and insertion of *D = $43,189 in Order (4)(k) and the deletion of  Order (8) and the insertion of * Order 6 in Order (7).

FURTHER NOTATION: 

These orders have been further amended pursuant to rule 16.05(2)(e) of the Federal Circuit Court Rules 2001 to reflect the deletion of 30 and insertion of *60 in order (3).

It is also noted that the date of these orders for the determination of the date of payment is 23 December 2013.

FURTHER NOTATION

These orders made on 4 March 2014 have been further amended pursuant to rule 16.05(2)(e) of the Federal Circuit Court Rules 2001 to reflect the deletion of [63% x (B + C)]  *(63% x B)+C –D and insertion of **E and deletion of after payment of the amounts set out in order (4)(j)(i) to (v) inclusive and insertion of** property  and **(accepted offer $425,000 less mortgage of $330,000 stated in paragraph 8 of the Judgment less the sale expenses) and deletion of C = costs payable to the wife of $8,124.50 if such sum remains outstanding C = $43,189, C = $43,189, *D = $43,189, and insertion of**$86,578 and **(excluding the property and mortgage pursuant to paragraph 8 of the Judgment) and deletion of to be retained by the wife and insertion of **D=$43,187, being the net amount of assets in the wife’s hands and **E =$8,124.50, being the Order for costs made pursuant to Order 1 of the Orders in Order 4(k).