Rapetti & Rapetti & Anor

[2012] FamCA 483

FAMILY COURT OF AUSTRALIA

RAPETTI & RAPETTI AND ANOR [2012] FamCA 483

FAMILY LAW  - PROPERTY  - Costs Application.

Family Law Act 1975 (Cth)

APPLICANT: Ms M Rapetti

1st RESPONDENT: Mr R Rapetti

2nd RESPONDENT: Ms P Rapetti

FILE NUMBER: SYC 2311 of 2008

DATE DELIVERED: 1 June 2012

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Stevenson J

HEARING DATE: Written submissions

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Watkins Tapsell

SOLICITOR FOR THE 1ST RESPONDENT: Diamond Conway Lawyers

SOLICITOR FOR THE 2ND RESPONDENT: Diamond Conway Lawyers

Orders

1. That the wife’s Application in a Case filed on 23 September 2012 is dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Rapetti & Rapetti and Anor 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: SYC2311/2008

Ms M Rapetti

Applicant

And

Mr R Rapetti

First Respondent

And

Ms P Rapetti

Second Respondent

REASONS FOR JUDGMENT

The proceedings

1. On 26 August 2011 I delivered written reasons and made orders for alteration of property interests as between the husband, Mr D Rapetti, and the wife, Ms M Rapetti.  The husband’s parents, Mr R Rapetti and Ms P Rapetti, intervened in the proceedings and alleged that they were entitled to recover certain monies which they had loaned to their son and the wife during the marriage.

1. On 23 September 2011 the wife filed an Application in a Case in which she sought that the interveners pay her costs on an indemnity or, alternatively, a party/party basis.  She also sought an order that the interveners pay her costs of these proceedings.  The interveners opposed the wife’s applications and the husband played no part in the present proceedings.

Approach to these proceedings

1. Costs applications are determined in accordance with s.117 of the Family Law Act 1975. Section 117(1) provides that each party to proceedings under the Family Law Act 1975 shall bear his or her own costs, subject to sub-section (2).

2. Section 117(2) provides:

   (2)If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.

3. Section 117(2A) provides –

   (2A)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.

Section 117(2A)(a)

1. The wife is employed on a full-time basis in the education field and earns approximately $47,800.00 gross per annum.  She receives approximately $354.00 per week by way of child support from the husband and about $209.00 per week in government benefits.  The wife’s financial statement sworn on 4 July 2011 showed that her total weekly income was approximately $1,584.00, which was to reduce to $1,504.00 after an adjustment to the husband’s child support liability.

2. According to the written submissions filed on her behalf in this application, the wife expected to receive a net amount of approximately $547,700.00 from the proceeds of sale of the former matrimonial home, after payment of personal debts totalling $65,581.00 and legal fees of $294,000.00.  She also retained assets to the value of $206,745.00 pursuant to my orders.

3. The solicitor for the wife complained in her written submissions that the interveners failed to file a financial statement in the present proceedings.  They were under no obligation to do so at any stage.

4. The solicitor for the interveners deposed in his affidavit sworn on 7 November 2011 that their combined income for the 2010 tax year was approximately $81,300.00.  He deposed further that they incurred a debt of approximately $50,000.00 in respect of the proceedings for property settlement.

5. In the judgment I referred to advances to the husband and the wife by the interveners from rental income generated by their various investment properties.  The wife’s solicitor annexed to her affidavit copies of title searches in relation to properties registered in the names of the interveners.  These searches are of limited relevance for present purposes, as they establish nothing beyond the bare fact of ownership of these properties.

Section 117(2A)(b)

1. Neither the wife nor the interveners were in receipt of a grant of legal aid.

Section 117(2A)(c)

1. The wife’s solicitor contended that the conduct of the interveners increased her costs of the proceedings.  She raised three (3) specific complaints, being:

   1.The interveners have changed the amount they were claiming from the parties on at least five (5) occasions).

   2.The interveners caused delay in the proceedings which resulted in increased costs of the parties.

   3.The interveners failed to comply with requests for financial disclosure in a timely manner.

2. The solicitor for the interveners conceded that they amended the amount which they sought to recoup from the husband and wife.  At trial they ultimately particularised their claim and sought orders that the husband and wife pay to them the sum of $336,664.00 plus interest.

3. This sum included amounts which they allegedly paid for the benefit of the parties on account of up-keep of various horses.  The competing claims in relation to horses were abandoned by consent at the commencement of the trial.  All parties sensibly acknowledged that pursuit of these claims would be an inefficient use of time and money.

4. The solicitor for the wife did not identify the way in which the change in the amount sought by the interveners increased her costs.  The wife was on notice at all relevant times of the nature of the interveners’ claim.  Since April 2009 she has been aware that the alleged liability was in the vicinity of $320,000.00 to $340,000.00.  I am not satisfied that any change in the amount sought by the interveners increased the wife’s costs.

5. The solicitor for the wife maintained that certain conduct on the part of the interveners delayed the finalisation of the proceedings.  This contention may be correct to some extent but, in my view, the fact that the matter had a lengthy history could not be considered to be the fault only of the interveners.

6. It is instructive to have regard to the benchsheet for 13 April 2011, when Registrar Campbell was finally able to list the proceedings for trial on 4 July 2011.  Inter alia, the Registrar noted:

   3.The parties have been unable to agree on hearing dates that are mutually convenient to all of them.

   4.Directions listing this matter for hearing was first made by the Court following a conciliation conference held on 30 September 2008.  The proceedings were commenced almost three (3) years ago on 23 April 2008.

   5.I have had the benefit of considering lengthy submissions from each party with respect to the date for hearing.  It is apparent that, whatever order I make, one or more parties will suffer some inconvenience.

   I have an independent recollection of considerable difficulties in listing the proceedings for final hearing.

7. The solicitor for the wife maintained that the interveners increased the wife’s costs by failing to comply with requests for discovery in a timely manner.  These requests related to the Rapetti Superannuation Fund.

8. The wife’s solicitor required discovery of documents “including financial reports, tax returns and bank statements for the [Rapetti] superannuation fund for the period 1994 up to and including 2006”.  These requests were made by letters dated 27 September 2010, 13 October 2010 and 14 October 2010.  Ultimately, the wife’s solicitor issued subpoena to the trustee of the superannuation fund on 22 June 2011.

9. In his affidavit sworn on 5 June 2009 Mr R Rapetti deposed that he believed that he “threw out” various financial records when he and his wife moved house in 2002.  The wife’s solicitor was on notice of this situation when she made the request for production of documents dating back to 1994.

10. The wife’s solicitor did not indicate the reason why she required documents produced on subpoena by the trustee of the superannuation fund to conduct her case.  Further, I was given no specific information as to the alleged increase in the wife’s costs on account of the interveners’ supposed delay in production of these documents.

11. I am not satisfied that the specific conduct of the interveners of which the wife complained led to an increase in her costs.  I could see no other way in which any conduct of the interveners caused financial disadvantage to the wife.

Section 117(2A)(d)

1. There was no suggestion that any party to the proceedings failed to comply with an order of the Court.

Section 117(2A)(e)

1. The wife’s solicitor submitted that as the application of the interveners was dismissed, they were wholly unsuccessful in the proceedings.  With due respect, I regard this contention as somewhat superficial.  In fact I found, inter alia:

   68.I thus find that the interveners advanced to the husband and wife the following amounts:

·    $90,517.00:  rental cheques

·    $32,625.00:  balance of the deposit on the purchase of the [Y Street] property

·    $50,000.00:  dividends on [O] Pty Limited shares

·    $10,000.00:  air conditioning in the [M] property.

I was satisfied, further, that the interveners advanced to the husband and wife additional rental cheques in an unquantifiable amount.  I found:

132.The advances made by the interveners seem to me to assume particular significance in the context or contributions to the remaining non-superannuation assets.  It is not simply a question of having regard to the amount of the advances to the parties; rather, it is appropriate to consider also the impact on the financial fortunes of the husband and wife.

1. I found that the husband contributed 62.5% to the non-superannuation assets, excluding the W property.  This funding rested largely on the advances made by the interveners to the husband and wife.

2. In reality the interveners were successful in establishing that they advanced substantial sums to the husband and wife and this funding shifted the assessment of contribution in his favour.  They failed only to establish that debts were owed to them by the husband and wife.

Section 117(2A)(f)

1. The wife’s solicitors submitted that she is entitled to a costs order against the interveners on the basis of an offer contained in a letter dated 13 October 2008.  The wife offered to settle the interveners’ claim on the basis that she “and/or the husband pay [to them] $57,037.56”.  The solicitor for the interveners indicated in his written submissions that this offer was not acceptable to themselves or the husband.

2. In the course of the trial the wife conceded that the interveners made the following advances:

   ·    $32,625.00:  balance of deposit on the purchase of the [Y Street] property

   ·    $90,517.00:  rental cheques

   ·    $50,000.00:  [O] Pty Limited dividends

   ·    $10,000.00:  air conditioning

   She thus acknowledged that the interveners injected some $183,000.00 into the family finances.  This amount far exceeds the sum of $57,037.56 which the wife’s offer implicitly recognised as the advances made by the interveners.

3. The wife’s solicitor relied further on an offer dated 31 October 2008, which included a proposal that the husband be solely responsible for any moneys owing to the interveners.  According to the written submissions of the interveners’ solicitor, the husband was not prepared to accept this offer.  In these circumstances, the interveners could not resolve their claim on this basis.

4. For these reasons, I am not persuaded that either of these two (2) offers assist the wife in her application for costs against the interveners.

Section 117(2A)(g)

1. The written submissions of the wife’s solicitors in relation to this subsection largely re-stated the previous contentions made in relation to specific subsections of s.117(2A). In addition, it was submitted that the wife’s costs were increased generally by the fact of the interveners’ participation in the proceedings.

2. In her affidavit of evidence-in-chief the wife conceded that the interveners advanced to herself and the husband rental income amounting to $90,517.32.  At all times she disputed that they advanced any additional rental income.  As noted, I found that they did provide additional funds from this source.

Conclusion

1. For all of these reasons, I am not satisfied that the interveners should pay any of the costs incurred by the wife.  Her application will be dismissed.

I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson delivered on 1 June 2012.

Associate: 

Date:  1 June 2012