RESNICK & RESNICK (No.2)

[2019] FCCA 3030

FEDERAL CIRCUIT COURT OF AUSTRALIA

RESNICK & RESNICK (No.2) [2019] FCCA 3030

Catchwords:
FAMILY LAW – Costs.

Legislation:

Family Law Act 1975 (Cth), s.117

Applicant: MS RESNICK

Respondent: MR RESNICK

File Number: LNC 383 of 2018

Judgment of: Judge McGuire

Hearing date: 30 July 2019

Date of Last Submission: 30 July 2019

Delivered at: Launceston

Delivered on: 23 October 2019

REPRESENTATION

Counsel for the Applicant: Ms A Trezise

Solicitors for the Applicant: Andrea Trezise

Respondent appeared in person

ORDERS

1. That the husband pay the wife's costs set in a quantum of $2,200 such to be paid within 28 days of the date of these Orders.

IT IS NOTED that publication of this judgment under the pseudonym Resnick & Resnick (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT LAUNCESTON

LNC 383 of 2018

MS RESNICK

Applicant

And

MR RESNICK

Respondent

REASONS FOR JUDGMENT

1. This is an application for costs by the wife following substantive property proceedings.  She seeks a discrete order for costs in a quantum of $2,200 on the basis of an argument that effectively an offer of settlement was made during the course of the proceedings such being rejected by the husband where the Court's ultimate orders were in terms the same as or substantially similar to that offer and where the matter proceeded for a further day of evidence after the making and rejection of the offer.

2. Matters of costs are dealt with pursuant to section 117 of the Family Law Act 1975. Subsection 1 provides a general rule that parties to family law proceedings each be responsible for his or her own legal costs. That general rule, however, is subject to a discretion in the Court at subsection (2) to make an award of costs if there are justifying circumstances. It is well established that the term justifying circumstances is not synonymous with exceptional circumstances. Section 117(2A) sets out the factors that the Court should have regard to in making an order under subsection (2).

3. The Court is to consider the financial circumstances of the parties.  In this matter, neither party is in a healthy financial situation.  Indeed, the substantive matter concern and argument as much as to debt of the parties as to their assets and/or superannuation entitlements.  The substance of my orders provided for the wife to retain the tangible assets and the husband to retain his superannuation entitlements.  There remained significant debt.  Further, the husband has advised that his circumstances have worsened and indeed has lodged a debtor's petition for bankruptcy.  Whilst this is a factor to consider, the financial circumstances of the parties are not of themselves determinative of an application for costs and impecuniosity is not a prohibition to the making of an order for costs.

4. Neither party is in receipt of a grant of legal aid.

5. The conduct of the parties during the proceedings is not relevant here and similarly this is not a situation where the proceedings were necessitated by the failure of a party to comply with previous Court orders.

6. Subsections (e) and (f) are the relevant considerations under section 117(2A). Firstly, this is a situation where the wife argues that the husband has been 'wholly unsuccessful' in respect of the offer made during the course of the proceedings.

7. The husband was represented by Counsel during the substantive proceedings but represents himself now in respect of the costs application.  During the course of submissions by himself and Counsel for the wife in respect of this application, there eventuated a factual dispute as to the terms of the offer made by the wife and rejected by the husband during the substantive trial.  As such, the Court was obliged to obtain the transcript of those proceedings.

8. In her Case Summary, the wife's position was that she was asking for 100% of the property pool.  In her Counsel's opening address, the wife's position moved to the seeking 75% of the non-superannuation assets.  The wife gave evidence and was cross-examined.

9. The husband came to the witness box whereupon Counsel for the wife gave notice that the wife was to consider her position again following preliminary comments from the bench as to a possible settlement.  The matter was stood down and instructions were taken.  It eventuated that the wife's Counsel made a further settlement proposal in open Court being a division of 70% to the wife and 30% of the husband of the total pool encompassing the wife retaining the tangible assets and the husband his superannuation entitlement.  The matter was further stood down.  The wife's amended proposal was rejected.  The matter then proceeded with the Court taking the husband's evidence.

10. Ultimately, orders were made in the terms of the wife's amended proposal/offer.  As such, the wife says that the matter proceeded effectively unnecessarily for an extra day and hence her application for the husband to pay her costs of that extra day in a quantum of $2,200.

11. The discrete factual dispute between the parties is that the husband’s recollection of the wife's ultimate offer was different than the recollection of the wife and her Counsel.  A reading of the transcript favours the recollection of the wife.  The transcript at page 49 provides at line [20] and following:

    HIS HONOUR:   Yes, Mr Maguire.

    MR MAGUIRE:   Yes, your Honour.  Unfortunately, the matter hasn’t ‑ ‑ ‑ 

    HIS HONOUR:   Yes, that’s fine.

    MR MAGUIRE:   ‑ ‑ ‑ resolved.  I can indicate, your Honour, that my client’s position now differs from what is contained within his case outline, and his position now, to put it to the court, is that he’s seeking that the parties retain all property in their possession, liabilities in their possession including superannuation save and except that he seeks payment of $30,000 from the proceeds of sale of the Street A, Suburb B property.

    HIS HONOUR:   Instead of half.

    MR MAGUIRE:   Instead of 50 per cent.

    HIS HONOUR:   Yes.  All right.

    MR MAGUIRE:   I understand it’s expected to be about $112,000.

    HIS HONOUR:   Yes, the figure I relied on when I did those maths.  All right.  I’ve read your case outline.  Do you wish to open?

    MR MAGUIRE:    I think the ---

    MS TREZISE:   Can I just also indicate that my client’s position has changed ‑ ‑ ‑ 

    HIS HONOUR:   Yes.

    MS TREZISE:   ‑ ‑ ‑ in relation to the matter just so we’re quite clear in relation to what the ambit of the dispute now is.  My client’s position is that she’s wanting to retain the proceeds of sale of the property in full, and she’s content for the husband to retain his superannuation.

    HIS HONOUR:   Yes.  All right.  Yes, Mr Maguire, do you have any evidence to lead from your client?  I’ve read your case summary.  Do you want to open or ---

Conclusion

1. I find therefore, that the offer made by the wife during the course of the proceedings was in the same terms as the ultimate decision of the Court.  I am satisfied that the proceedings continued for approximately an extra day or substantial part thereof, following the rejection of the offer.

2. I am mindful of the husband's financial circumstances but, as mentioned above, those circumstances in themselves are not determinative of the decision in this matter.  I note also that although the wife retained the tangible assets of the parties, she herself cannot be said to be in a strong financial position.

3. The persuasive factor here is the decision of the husband to reject the offer of settlement put openly in Court and thereby not even carrying the conditions of a Calderbank's offer. That is, should the offer have been accepted then ultimately the extra Court time would have not been required and costs accordingly not be incurred by either party. The rhetorical question is why the wife should therefore have to bear those costs in circumstances of a consideration of all of the factors under section 117 (2A)? I am of the view that she should not be responsible for those costs with emphasis on the husband rejecting an offer which was ultimately reflected in the decision of the Court. There will be an order that the husband pay the wife's costs which I accept is reasonable quantum in the sum of $2,200 such to be paid within 28 days of the date of these orders.

I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of Judge McGuire

Date:  23 October 2019