Rabino & Rainsford
[2022] FedCFamC1F 137
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Rabino & Rainsford [2022] FedCFamC1F 137
File number(s): BRC 4468 of 2019 Judgment of: BAUMANN J Date of judgment: 15 March 2022 Catchwords: FAMILY LAW – COSTS – Where the wife sought an order for costs – Where the husband ordered to make a contribution to the wife’s costs in a fixed sum Legislation: Family Law Act 1975 (Cth) ss 75; 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 12.17
Cases cited: Beach Petroleum NL & Claremont Petroleum NL v Johnson (1995) 135 ALR 160
Browne v Greene (2002) FLC 93-115
Leary v Leary [1987] 1 ALL ER 26
Rabino & Rainsford (No. 2) [2021] FamCA 551
Rabino & Rainsford (No. 3) [2021] FamCA 616
Division: Division 1 First Instance Number of paragraphs: 31 Date of last submission/s: 20 September 2021 Date of hearing: On the papers Place: Brisbane Solicitor for the Applicant: Hirst & Co For the Respondent: Litigant in person ORDERS
BRC 4468 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS RABINO
Applicant
AND: MR RAINSFORD
Respondent
ORDER MADE BY:
BAUMANN J
DATE OF ORDER:
15 MARCH 2022
THE COURT ORDERS:
1.That the husband pay a contribution to the costs of the wife fixed in the sum of $50,000, by no later than 4.00pm on 29 March 2022, payable from the funds held in the Trust Account of Hirst and Co Solicitors.
2.That the remaining balance of $120,000 held in the Trust Account of Hirst and Co Solicitors be paid to the husband.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Rabino & Rainsford has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
BAUMANN J:
After a property proceedings trial over two days was completed on 15 May 2020, it was necessary to receive further submissions before final orders were pronounced on 23 August 2021.
In effect, the orders were based on combined nett pool of assets totalling $1,764,955 (see Appendix One to Reasons in Rabino & Rainsford (No. 2) [2021] FamCA 551). A significant issue at the trial was whether the husband’s estimated severance payment of $547,635 should be included in the balance sheet (as the wife contended) or be regarded as a “financial resource” within the matrix of the s 75(2) factors (Family Law Act 1975 (Cth) (“the Act”)) (as the husband contended).
During the course of the proceedings commenced by the wife in April 2019, the characteristics of the severance pay changed from a contractual expectation to a payment that accrued and become payable with certainty, as a result of the husband’s cessation of employment by at least May 2020. By the time of Final Orders, for reasons published (see Rabino & Rainsford (No. 3) [2021] FamCA 616), the severance pay had crystallised into a payment due of $581,516.72, which was relevantly distributed as follows:
Wife 45% or $261,682.52 Husband 55% or $319,834.20
The payment actually received by the husband was $127,526.93 after the following payments:
Payment to the wife for arrears $22,307.27 Funds held in Trust Account of the wife’s solicitors pending determination of her Costs Application $170,000
Otherwise, the orders made provided for the wife to receive the equivalent of $687,785 (56.5%) and the husband to receive $529,535 (43.5%) of the pool one interests. Relevantly, the wife was to retain the former family home but was responsible for all secured debts, including the “Rocket” loan with Westpac.
WIFE’S COST APPLICATION
By an Application filed 17 August 2021, the wife sought a number of orders, essentially:
(a)Indemnity costs from 8 February 2019 fixed in the sum of $210,000; or
(b)Indemnity costs as agreed or assessed; or
(c)Party/Party costs from 8 February 2019 fixed in the sum of $160,000; or
(d)Party/Party costs as agreed or assessed.
In support of the Application, the wife filed an affidavit by the wife sworn 16 August 2021 and an affidavit by her solicitor sworn 6 September 2021. Written submissions as to costs were filed on 6 September 2021.
In response, the husband filed a Response to Application in a Case on 20 September 2021 in which he agreed to pay:
(a)$3,009.94 being scale costs with respect to the hearing on 9 December 2019; and
(b)$9,695.41 being scale costs with respect to the hearing on 5 March 2020.
Otherwise the husband says the wife’s Application for costs should be dismissed. In support of his Response to an Application in a Case, the husband relies upon his affidavit filed 20 September 2021 and his written submissions filed on the same day.
PRINCIPLES
Whilst s 117(1) of the Act prescribes that the general rule is for parties to bear their own costs of proceedings, if the Court is of the opinion that there are circumstances that justify it so doing, it may make such order as to costs (after consideration of the s 117(2A) factors) as it considers just.
Helpfully, both sets of written submissions deal with the factors set out in s 117(2A), which I will succinctly analyse next.
The fact that I have not mentioned in these Reasons, every submissions or every fact asserted in the affidavits relied upon, should not be construed as ignoring those submissions. Rather, in exercising what is accepted on authority to be a wide discretion, I have attempted to illuminate a logical path to my ultimate conclusion.
FACTORS
Financial contributions
Both parties are employed; received a property distribution; and have superannuation. The wife submits in effect the difference in the parties’ financial circumstances is not a relevant distinction. I agree.
Legal Aid
Not relevant.
The conduct of the parties in respect of discovery
As the submissions of the wife identify, the husband was at times slow in making timely disclosure, particularly around his employment. As earlier noted, the accrued severance entitlement was a matter of significance. The husband was, in my assessment, initially evasive in making full disclosure on this issue – which only began to clarify when a subpoena was issued to his Australian based employer (notwithstanding his actual permanent residence and place of employment was in Country B).
The wife moved the Court urgently to make injunctions so as to restrain funds leaving the Australian jurisdiction. Although ultimately some of those injunctions were consented to by the husband, my impression was he delayed in doing so. Some of the inter-office emails from H Company came as a surprise to the husband – but they should not have considering what he was seeking to achieve.
It is a proper concession that the husband makes about the hearings on 9 December 2019 and 5 March 2020, however I will return to this topic later in these Reasons.
The other area where the husband was clearly evasive in respect of his timely discovery, was in respect of the somewhat curious transactions relating to the self-managed superannuation fund, and in particular, the unsecured loan to Mr D. Whilst, at the trial, the husband accepted the full value of his entitlement in the self-managed superannuation fund should properly come into the balance sheet, that position was not, as I recall from a number of Case Management Hearings, a position he had always adopted.
Whilst conscious of the Full Court’s statements in Browne v Greene (2002) FLC 93-115 at [51], I assess that the wife did incur additional costs as a result of the husband’s failure to make proper and timely disclosure; in addition to the costs incurred for the hearings on 9 December 2019 and 5 March 2020.
Whether the proceedings were necessitated by the failure of a party to the proceeding to comply with orders
I adopt the husband’s concession at paragraph 16.1 of his written submissions which has been considered in part under s 117(2A)(c) of the Act.
Whether any party has been wholly unsuccessful
Certainly, as the wife identifies, once all the evidence about the severance payment was available, she changed her initial contention that the expectation should be treated as a financial resource. Although the husband maintained that contention, the Court found it should be treated as property and included in the balance sheet. To that extent, the husband was unsuccessful.
However, the husband was “successful” at trial in persuading the Court not to “add back” up to $370,000 (see para 46(c) of Rabino & Rainsford(No. 2) [2021] FamCA 551), even though the Court found the husband had not fully explained what he had used some of his post separation income for, absent any discernible increase in savings or other assets. In circumstances where it was impossible to quantify the amount that could fall into “excessive” lifestyle payments, some modest adjustments under s 75(2)(o) of the Act was allowed (see Rabino & Rainsford(No. 2) [2021] FamCA 551 at [72]).
I also accept the husband’s submissions that initially the wife sought orders for adult child maintenance and child support – which orders she ultimately abandoned when filing her Further Further Amended Initiating Application on 4 March 2020.
Offers for settlement
The wife contends that the husband ought to have accepted her offer made on 8 February 2019 (before proceedings were formally commenced) and repeated in almost identical terms on 22 November 2019 (after proceedings were initiated) as the ultimate outcome for the wife from Final Orders was $139,686 better for the wife. To assess the wife’s submission, it is necessary to record the terms of the order (found at Annexure “W1” of the wife’s affidavit filed 16 August 2021.
Considering the husband’s submissions on the offer, I make the following findings:
(a)The offer not only relates to property adjustment orders, but also to child support and adult child maintenance. In respect of child support, it related to private school fees; private health insurance; mobile phone and internet; and the purchase of a car for $15,000.
In respect of adult child maintenance (for both children) the offer sought payment for a range of expenses until completion of their tertiary education or age 25 (whichever occurs first) and vet and house-transport bills for Ms O’s horses;
(b)The document dated 8 February 2019 constitutes a whole offer – its terms required the husband to accept all of the terms. When the wife abandoned her claims for child support and adult child maintenance, she did not, on the evidence, make any complete offer in relation to property settlement alone. On this basis alone, the husband was entitled to reject the offer when it included these elements;
(c)At the time of the offer, the severance pay had not been quantified and both parties, incorrectly as my judgment reflects at the time of the trial, regarded the entitlement as a “financial resource”;
(d)It is unclear what, in these circumstances, the balance sheet looked like at the time of the offers. The offer, for example, does not identify an agreed or even asserted pool. The home, whilst the major asset, was not the subject of a single expert valuation at that time. That valuation did not occur until 10 July 2019. Furthermore, the property was heavily mortgaged; and
(e)The wife’s offer required the husband to refinance the Westpac Rocket loan standing at a debt level of $180,000, in circumstances where the non-resident husband would have no property interests in Australia to secure the debt. I agree with the husband it was impractical for him to take over that debt, something which was avoided by the orders the Court made, where the wife took on the responsibility for both Westpac liabilities, but also took a transfer of the home.
In the circumstances, although perhaps somewhat coincidently, the monetary value the wife received was estimated at $949,464 from my judgment on the pool then identified. The offer was clearly based on an entirely different pool.
In this case, I am not persuaded the husband erred in not accepting the offer made 8 February 2019 and repeated on 22 November 2019.
CONCLUSION
In my assessment, it would not be just for the husband to pay the wife’s costs of the proceedings from 8 February 2019, however it is just for the husband to make a contribution to the wife’s costs of:
(a)The hearings on 9 December 2019 and 5 March 2020;
(b)Additional costs incurred in respect to the failure of the husband to make full and timely disclosure; and
(c)This costs application.
The quantification of costs could be achieved by a thorough assessment by a Registrar (which I would have the power to order), however that process itself will expend further funds and cause more delay.
I am conscious of the fact that $170,000 has been held in the Trust account of the wife’s solicitors pending determination of this costs dispute, and to that extent, I regret my delay in publishing these Reasons.
I have formed the view that it is in the interests of justice and for the benefit of these parties to fix costs (see r 12.17(1)(a) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth); and Leary v Leary [1987] 1 ALL ER 26 at [265]). The components of the ultimate sum awarded is:
(a)In respect of the hearing on 9 December 2019 and 5 March 2020, the conduct of the husband requires costs to be awarded on an indemnity basis because this behaviour and obstinance was exceptionally poor. I allow a fixed sum of $25,000 based on the husband’s estimate of party/party expenses of $12,700 approximately;
(b)I allow a further $20,000 for costs, on an indemnity basis, relating to the failure of the husband to make full and timely disclosure, not in any way as a “penalty” but as an estimate arising from the wife’s evidence of her expenses; and
(c)I regard the claim of $20,000 (on an indemnity basis) for the Application for costs as excessive. The Court’s determination is to be logical and reasonable (Beach Petroleum NL & Claremont Petroleum NL v Johnson (1995) 135 ALR 160 at [164]). On a party/party basis of $5000 is allowed.
In total therefore, I will make an order that the husband make a contribution to the costs of the wife fixed in the sum of $50,000, to be deducted from funds held in the Trust Account of Hirst and Co Solicitors. The balance held of $120,000 shall be paid to the husband.
I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Baumann. Associate:
Dated: 15 March 2022
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