Perkins and Perkins

[2007] FamCA 274

FAMILY COURT OF AUSTRALIA

PERKINS & PERKINS [2007] FamCA 274

FAMILY LAW - COSTS – s 117(2) – Husband wholly unsuccessful - Offer of settlement made well prior to the trial - Offer in writing pursuant to s 117(2A)(f) – Exercise of discretion as to quantum

Family Law Act 1975 (Cth)

Norbis v Norbis (1986) 161 CLR 513 at 540
Penfold v Penfold (1980) 144 CLR 311; (1980) FLC 90-800

APPLICANT: MRS PERKINS

RESPONDENT: MR PERKINS

INDEPENDENT CHILDREN’S LAWYER: CHARLES BECKWITH

FILE NUMBER: DGF 2375 of 2002

DATE DELIVERED: 30 MARCH 2007

PLACE DELIVERED: MELBOURNE

JUDGMENT OF: CRONIN J

HEARING DATE: 28 MARCH 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT: MS SWART

SOLICITOR FOR THE APPLICANT: ANN E GAMBETTA & ASSOCIATES

COUNSEL FOR THE RESPONDENT: IN PERSON

Orders

1. That the husband pay the wife’s costs of and incidental to these proceedings fixed in the sum of $5000.

2. If the payment of the said costs sum is not made by 4.00pm on 1 May 2007, the sum be paid in addition to any other monies due to the wife pursuant to par (6)(c) of the orders made 31 January 2007.

3. The wife’s application for costs is otherwise dismissed.

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: DGF 2375 of 2002

MRS PERKINS

Applicant

And

MR PERKINS

Respondent

REASONS FOR JUDGMENT

1. I delivered judgment on 31 January 2007 in relation to a property division between the parties. 

2. The hearing of the matter had occurred on 22 January 2007.  At the start of that day, there were both parenting issues and property matters before the Court.  The proceedings commenced with an announcement by counsel for the Independent Children’s Lawyer that parenting issues had been resolved and the parties had all signed minutes of proposed orders.  Orders were then made in those terms and the counsel for the Independent Children’s Lawyer excused.

3. I then heard the matter during 22 January 2007.  The husband represented himself throughout the proceedings and the wife was represented by counsel. 

4. Paragraph 1 of the orders I made in relation to property matters provided that the husband pay to the wife $16,000 by 1 May 2007.  Leaving aside machinery orders, I also ordered that each party otherwise retain what they had in their possession or control, including accruing superannuation entitlements.  I otherwise dismissed the proceedings save as to any application for costs.

5. Subsequent to my order, the solicitor for the wife filed an affidavit which endeavoured to explain that the wife had offered to settle for the sum of $16,000 in September 2006.  However, I found the affidavit material confusing and not particularly helpful in respect of any application for costs by the wife as a result of which, I indicated that I would list the matter for submissions and give the husband an opportunity to be heard by telephone.

6. On 28 March 2007, Ms Swart of counsel again appeared on behalf of the wife and the husband attended by telephone.  During the proceeding, the husband said that he had really not been given sufficient time and that he was being rushed.  I offered him an opportunity to consider the material being put by the wife in respect of the costs application but he said that he did not want to take any more time off from work. 

7. At the outset, I explained to the husband the provisions of s 117 of the Family Law Act 1975 (Cth) (“the Act”). He acknowledged that he had read that provision. I explained to him the process that I intended to follow namely to hear from counsel for the wife in support of her application and then I would hear from him.

8. The wife’s position was that she only sought costs subsequent to the service upon the husband of a formal offer to settle.  It was dated 6 September 2006.  I was handed a copy of it.  The terms of that offer were:

   1.      That the husband pay the wife the sum of $16,000.00.

   2.Contemporaneously with the payment the wife will remove the Caveat from the property at W.

   3.That the husband retain the car.

   4.That the husband’s superannuation accrued during the marriage be divided equally between the parties.

9. Most important of all, counsel for the wife indicated that she was only seeking costs subsequent to the offer of settlement.  Insofar as some of those costs related to the children’s proceedings, she pointed to the fact that the wife and the Independent Children’s Lawyer had proposed what was ultimately agreed upon as early as 5 October 2006 and that after that date, the wife’s supplementary trial affidavit was drawn.

10. The wife sought $7333. Counsel told me that that sum was not drawn on scale but rather according to an hourly arrangement between solicitor and client.  It was said that the scale would have provided a much higher figure than that sought.  Looking at the history of the litigation, I have little doubt that that is correct.

11. The husband repeated many of things that he had said at the hearing in January.  He said that for five years he had been dealing with different lawyers and they had all “bailed out” over the matter because it was a small pool of money.  He said that the offer on 6 September 2006 was the first proposal after 4½ years.  When I pressed him about this, he indicated that he had made an offer three years ago of $10,000 plus some white goods and a motor car.  This really repeated his position as outlined in the trial and I have dealt with that in my judgment.

12. The husband’s position before me on the costs application was that there was no basis to include his home in the pool for division because it was not the “matrimonial home” and that the Court had ruined the lives of his children having no concern for their welfare.  He said that he had travelled to and from the Court from Queensland and generally had been inconvenienced by the lack of progress in the matter.  The underlying theme, however, was that he did not feel there was any basis upon which he should have to pay to his former wife any sum by way of property settlement.

13. I explained to the husband the concern I had about the fact that an offer of settlement had been made in September 2006 which he had rejected or not responded to. Without any knowledge of that offer, I had made a finding precisely in the terms of the offer of settlement.  He responded by saying that he had made offers three years ago of $10,000 plus white goods, plus a car but having regard to the material that I heard in the case and the findings I have made, I do not accept that those offers, if indeed they were made as offers, were intended to settle property issues.  It is clear that the wife made the offer in September 2006 with a determination to genuinely resolve the matter overall but the husband would never have accepted it because of his belief that he had no obligation to pay his former wife anything.

14. The husband said that only moments before I had entered the courtroom on 28 March 2007, he had been speaking to his former wife by telephone about a problem associated with their children.  He told me that they were negotiating about the children possibly going to live with him.  He said there were problems and made reference to the fact that one of the children had been involved in stealing and that the prospect was that either he would come down to live in Melbourne with the children or they would go to him in Queensland.  He said that he could not say that there was an agreement but he certainly hoped that that might eventuate and the children come to live with him.  Whilst I was concerned that the parties seem now to be able to discuss issues about their children, I do not believe any change in the care arrangements for the children in the foreseeable future would significantly affect the exercise of my discretion in this case. The husband said that he had told his former wife that he was involved in the court proceedings that very morning and she indicated that she knew nothing about it.  I raised this subject with counsel for the wife who indicated that her instructor had been unable to contact the wife and although she had the telephone number, she was not aware of the potential children’s issue.

15. Counsel for the wife reiterated that the real concern about the children’s matter was the fact that the wife had endeavoured to resolve the matter with the assistance of the Independent Children’s Lawyer in October 2006 but had to wait until the final moment prior to the commencement of the trial for there to be a settlement.  As such, she had incurred significant legal costs. 

16. Having told the husband what the various aspects were under s 117 of the Act that I was dealing with, I queried whether he had anything to say in respect of the question of conduct of the proceedings by his former wife. It is to be remembered that in my judgment I expressed some concern about the way the matter had been prepared for trial by both parties. The husband’s only response was that the wife had failed to comply with court orders in relation to the removal of the caveat on the home which consequently lost him a significant sum of money. I have dealt with that issue in my judgment and do not propose to deal with it again.

17. I asked whether the husband had anything further to add and he indicated that he did not.

18. Section 117(1) of the Act is the basic provision which lays down the principle that each party shall bear his or her own costs but if there are circumstances which justify the court in so doing, an order can be made. In considering what order, if any, should be made, a court is obliged to have regard to the matters set out in sub-s 2(A). That particular provision is not an exclusive list because the court is entitled to take into account such matters as it considers relevant.

19. In Penfold v Penfold[1], Stephen, Mason, Aitken and Wilson JJ said at 315-316:

    It is an accurate description of s 117(1) to say that it expresses a general rule, provided that it is firmly understood that the sub-section is not paramount to s 117(2). As sub-s (1) is expressed to be subject to sub-s (2) the former must yield whenever a judge finds in a particular case that there are circumstances justifying the making of an order for costs.

    Sub-section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional or special onus on an applicant for an order for costs. Consequently, with respect to their Honours in the Family Court, we do not agree with the suggestion made in the judgment under appeal that an order can only be made under s 117(2) in “clear case”.

    Sub-section (2) does not in our view as a matter of law require the judge to specify the circumstances which justify the making of an order…judges very frequently make orders for costs without giving reasons or making findings, even where costs are in issue.  The absence of reasons or findings does not in itself indicate that a judge has erroneously exercised his discretion to award costs, though it will place an appellate court in a position of examining the circumstances and of determining for itself whether the circumstances show that the discretion was erroneously exercised…

    [1] (1980) 144 CLR 311; (1980) FLC 90-800

20. It is thus important to look at the matters raised by each party in the light of the statutory provisions which constrain my discretion. 

21. In respect of the matters in s 117(2A) of the Act, I have taken into account the financial circumstances of each of the parties. There can be little doubt that neither is in a very strong financial position. I made that very clear in the judgment. At par 28 of my reasons for judgment, I referred to the fact that the pool of assets to be divided between the parties was a very modest $38,000. When one totals the assets that I set out in par 27, it would appear that there is a $9000 error and that the pool of assets is $9000 higher than I have set out in par 28. If one looks at par 87 of my reasons however, it will become apparent that the $38,000 is the divisible pool after the exclusion of the parties’ respective superannuation interests.

22. Of that $38,000 however, as I found, $12,000 relates to the equity in the wife’s home that she has amassed subsequent to separation as a result of a first homebuyers grant.  The husband on the other hand has an equity in a home which is in his name only and for reasons best known to the wife and her practitioners, only half of the equity was put into that pool of assets as a result of the fact that the husband’s new wife apparently claimed an interest.  On any view however, the husband is in a stronger financial position than the wife and will still be in a stronger financial position after the settlement of the orders that I have made if one ignores the apparent equitable claim of the husband’s new wife.  In addition, it is quite clear that the husband’s income position is stronger than that of the wife. The wife’s financial position has really not been enhanced by the husband’s approach to child support and I have set those matters out in par 109 of my reasons for judgment.

23. I am told by counsel for the wife that neither party was in receipt of assistance by way of legal aid. 

24. I have already mentioned the question of conduct by the parties to the proceedings. Section 117(2A)(c) is directed to the question of whether costs are incurred as a result of parties’ behaviour in respect of many of the matters that are there listed. At par 9 of my reasons, I set out my complaint in respect of the approach adopted by the wife but I do not see how that affects the costs issue in this case having regard to the limited claim that the wife is now making.

25. I do not believe that there are any circumstances in which I could say that these proceedings were necessitated by the failure of a party to comply with previous orders and I have already made comment about the husband’s frustration over the caveat issue. 

26. In respect of s 117(2A)(e), it would be hard not to find in this case that the husband has been wholly unsuccessful. On the morning of the court or very close before that time, he agreed to the orders proposed by the Independent Children’s Lawyer. For over three months, he was aware of what the wife would settle for in relation to property matters. There is no doubt in my mind that the wife has had to proceed to obtain a just and equitable outcome.

27. In Norbis v Norbis[2] Brennan J said:

    The “generous ambit within which reasonable disagreement is possible” is wide indeed when there are a number of factors to be taken into account and the comparative weight to be attributed to those factors is not clearly indicated by uniform standards and values of the community.

    [2] (1986) 161 CLR 513 at 540

28. Even taking into account the fact that the husband was unrepresented, it is my view that he was being unrealistic in not only his position in relation to the children’s matter but also that relating to the property issue.

29. I have taken into account that the wife has made an offer in writing of the type referred to in s 117(2A)(f). I am satisfied that in September 2006, the husband was in a position to decide forensically whether he should accept the offer. I am conscious of the fact that the husband conducted the litigation before me without being legally represented but I am also conscious that on 8 September 2006, a registrar conducted a defaulters list hearing at which the husband was represented by a legal practitioner from R Lawyers. On that basis, even taking into account the matters referred to in Norbis above, it is my view that the husband’s position that he was not obliged to make any offer was unreasonable.

30. Ultimately however, having taken all those matters into account, I still need to be satisfied that it is just to make an order for costs.  As the High Court has made clear in Penfold[3] the issue of costs is discretionary. 

    [3] op cit

31. An order for costs of any significant amount will create hardship upon the husband particularly having regard to the fact that he already has to find the sum of $16,000 pursuant to my order.  Conversely however, to refuse the wife any costs in these proceedings would mean that from the $16,000 that she is to receive, a significant amount will have to be paid to satisfy her own lawyers.  Given the outcome of these proceedings, the latter outcome in my view would be unfair to the wife.  In my view therefore, it is just that the wife have an order for costs in her favour. 

32. Not only is the question of whether or not an order for costs should be made discretionary, so also is the quantum of those costs.  Notwithstanding that I have found that the costs proposed are modest by reference to the scale, in the exercise of my discretion, I am not prepared to give the wife all of her costs.  In my view, the appropriate amount is $5000 which in effect, is a contribution towards those costs.  I so order.

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

Associate: 

Date: 

IT IS NOTED that this judgment for all publication and reporting purposes be referred to as PERKINS & PERKINS