Rigge & Rigge (No. 3)

[2021] FamCA 390

FAMILY COURT OF AUSTRALIA

Rigge & Rigge (No. 3) [2021] FamCA 390

File number(s):

BRC 10441 of 2014

Judgment of:

BAUMANN J

Date of judgment:

25 June 2021

Catchwords:

FAMILY LAW – COSTS – Where both parties seek costs as against the other – Where the Court finds that circumstances do not exist to justify departing from the general rule that each party bear their own costs pursuant to s 117(1) of the Family Law Act 1975 (Cth) – No orders as to costs made.

Legislation:

Family Law Act 1975 (Cth) ss 117

Family Law Rules 2004 (Cth)

Cases cited:

Kennon & Kennon (1997) FLC 92-757

Kohan & Kohan (1993) FLC 92-340

Rigge & Rigge [2020] FamCA 106

Rigge & Rigge (No. 2) [2020] FamCA 573

Number of paragraphs:

11

Date of last submission/s:

11 January 2021

Date of hearing:

On the papers in chambers

Place:

Brisbane

ORDERS

BRC 10441 of 2014
BETWEEN:	MR RIGGE Applicant
AND:	MS RIGGE Respondent

ORDER MADE BY:	BAUMANN J
DATE OF ORDER:	25 JUNE 2021

THE COURT ORDERS:

1.That there be no order as to costs.

2.That each party’s application for costs be dismissed.

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 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).

IT IS NOTED that publication of this judgment by this Court under the pseudonym Rigge & Rigge has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

BAUMANN J:

INTRODUCTION

1. After delivering Reasons for Judgment on 5 March 2020, in respect of property proceedings between the Applicant husband Mr Rigge and the Respondent wife, Ms Rigge (see Rigge & Rigge [2020] FamCA 106]), further submissions as to the form of order were made by each party, resulting in the final Orders being pronounced on 24 July 2020 (see Rigge & Rigge (No. 2) [2020] FamCA 573)

2. In essence, those Orders estimated the notional nett pool of assets (found at Appendix One to the Reasons) to be $4,469,170. The effect of the Orders made provided for the wife to retain cash and property totalling $1,675,939 or approximately 37.5% of the pool of assets.

3. In the substantive proceedings, both parties sought orders for costs and in support of these Orders. The Court has received and considered the following material.

   Wife

   (a)Written submissions filed on 21 August 2020 are relied upon, in which the costs orders sought are particularised as follows:

   (i)The husband pay the wife’s costs on an indemnity basis in the sum of $394,065.83; or

   (ii)In the alternative, costs on an indemnity basis from 8 June 2018; or

   (iii)In the alternative, costs on a party and party basis in the sum of $128,143.49.

   Husband

   (b)Written submissions filed on 11 January 2021 are relied upon, in which the costs orders sought are particularised as follows:

   (i)The wife pay the husband’s costs on an indemnity basis in the sum of $248,842; or

   (ii)In the alternative, costs on a party and party basis in the sum of $114,123; or

   (iii)In the alternative, the wife pay the husband’s costs on a direct basis, for the work associated with expert reviewing, Lawyer/Accountant and Counsel costs responding to and associated work preparing for trial:

   (A)Ms NP’s financial report in the sum of $38,320, and

   (B)the wife’s Kennon & Kennon (1997) FLC 92-757 Application, in the sum of $18,762.

   (c)In the alternative, that the wife pay the husband’s costs as assessed by an independent costs assessor, or otherwise agreed.

4. It is relevant to note that both parties are now unrepresented.

   RELEVANT PRINCIPLES

5. The general rule is that each party shall pay their own costs of the proceedings (s 117(1) of the Family Law Act 1975 (Cth) (“the Act”), however, if the Court is satisfied, following the consideration of the factors set out in s 117(2A) of the Act, that circumstances exist that would justify an order for costs, then such order as is just, may be made.

6. If the Court considers an order for costs is justified, then the Court may consider fixing costs; applying the Family Law Rules 2004 (Cth) scales with assessment or, in some cases, assessing costs on an indemnity basis (see Kohan & Kohan (1993) FLC 92-340).

7. Accordingly, the first determination is whether the circumstances justify an order for costs. I examine the submissions within the matrix of the relevant s 117(2A) factors next.

   Factors:

   (a)The share each party was entitled to receive from the litigation (see paragraph 2 above) means each party has the capacity to meet an order for costs – although at the time of orders being made, the husband’s financial circumstances, with the benefit of the litigation, would have been superior;

   (b)Neither party had a grant of legal aid;

   (c)The wife submits that the husband failed to engage in pre-action negotiations from about May 2015 to the commencement of proceedings on 18 February 2016 and failed to make proper and fulsome disclosure.

   Frankly, although an offer for mediation was made as early as 21 July 2015, the complexities of these parties’ financial history and delays were such that any mediation at that stage was premature. Even when the first forensic accountant report by Mr QR was produced on 21 March 2017, it took two adversarial experts (Mr JK for the husband and Ms NP for the wife) and a conference of those experts to clarify the number of inter-related loans within the entities. That statement of experts only materialised after their conference on 7 February 2019. 

   That these parties were somewhat entrenched in their positions and both asserted failure to disclose, made it abundantly clear that attempts at mediation in September 2016 and then in March 2017, were almost doomed to fail – save for a totally “commercial” compromise being reached.

   The husband also complains in his submissions about the wife’s failure to disclose and her conduct in varying the terms of the Trust, of which E Pty Ltd was Trustee in 2011 (without his knowledge), allowing the wife to control significant distributions from his parent’s estates intended for him. This issue was dealt with in my earlier Reasons for Judgment. Both parties were open to criticism. I do not ignore however, the funds exceeding $1,000,000 the wife received for her benefit.

   The husband also raises the extra costs incurred when the wife raised issues of family violence and thereby sought a Kennon adjustment. As my earlier Reasons set out, after various objections to the wife’s affidavit by the husband’s Counsel were raised and allowed, the need for cross-examination evaporated on that issue.

   The wife also only “found” papers belonging to a loan alleged to be owed to QQ Ltd the weekend before the hearing. This caused much excitement at the hearing but ultimately lead to nothing.

   Similarly, the wife’s excitement arising from Mr JK’s report delivered in January 2019 about a possible future entitlement also fizzled for lack of an evidentiary foundation.

   When my Reasons delivered as a whole are considered, the conduct of both parties through the litigation, I find, lead to extra costs and investigations and both deserve some level of criticism by the Court.

   (d)The proceedings were not necessitated by any failure to comply with previous Orders of the Court;

   (e)Although the wife contends that the husband was “wholly unsuccessful” because the verdict provided for her to receive 37.5% of the pool and his pleading sought only 25%, the submission fails to take account of the orders sought by the wife that she receive 50% of the pool. Furthermore, it was a strong contention of the wife that she receive the 60 units in the FF Unit Trust held by E Pty Ltd (and through that, a continuing interest in the “Suburb EE” development). I found in favour of the husband retaining that interest. As I refer to next, the retention of that interest was a major point of contention. In my view, neither party could be described as having been “wholly unsuccessful;”

   (f)Offers for settlement were made and exchanged on 8 June 2018 and are annexed to the wife’s submissions at items 7 and 8. The offers are imprecise; reveal terminology without adequate description (e.g. “its subordinate entities”) and really, in my view, when compared with both the pool of assets as found by me and the form of order necessary to achieve justice and equity, are almost impossible to understand.

   The contention that the wife’s offer amounts to a total of $1,068,232 and is $607,707 less than the wife received fails to engage with at least these issues of relevance:

   (i)The wife’s “counter-offer” did not agree to the husband retaining the 60 units in the FF Unit Trust – which the wife said had a negative value of $19,856;

   (ii)The wife’s offer does not take into account, in any clear way, the existence of the joint loan to FF Unit Trust ($904,570) or the true value of E Pty Ltd;

   (iii)By 8 June 2018, the wife had already received $500,000, not taken into account as a partial property settlement;

   (iv)The wife, I find, knowingly would only agree to retaining the K Trust “and its subordinate entities” (whatever that means), if “all beneficiary accounts and loans are paid out.” Without an understanding of what those contingent or actual liabilities were, it is impossible to truly calculate what the wife’s offer amounted to; and

   (v)The wife had, as I found, accessed significant distributions from the husband’s parent’s estate and it is far from certain the husband knew full details of the amounts or use of those funds, in June 2018.

   CONCLUSION

8. Although the property proceedings had a few complications, my assessment was that more than any other issue, the toxic relationship between this mature couple fuelled the conflict, which was inflamed throughout by allegations of non-disclosure and mistrust.

9. As noted, even the week before the trial began, the wife was making discovery of relevant documents that had been in her possession (unknowingly she said) for years. Two adversarial accountants who used a previous single expert’s opinion as a base, were able to narrow a number of the inter-related loans, but still were unable to resolve a number of factual issues which required determination.

10. Considering all factors analysed above, I am not persuaded by either of the parties submissions that the circumstances ultimately justify departing from the general rule under s 117(1).

11. Both costs applications shall accordingly be dismissed.

I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Baumann.

Associate:  

Dated:       25 June2021

APPENDIX ONE

ASSETS
Realty	Ownership	Value
a)   Proceeds from sale of TT Street, Suburb SS in Damien Greer Lawyers Trust Account	W	$54,311
b)     Detroit properties	H	$275,000
Corporate/trust interests
a)   E Pty Ltd as trustee for The K Trust (the QQ Pty Ltd loan is excluded)	W	$1,489,326
b)     C Pty Ltd	H	($19,221)
c)   C Pty Ltd	W	($29,000)
d)     E Pty Ltd as trustee for The K Trust loan	W	$706,175
e)   G Pty Ltd	W	($2,543)
f)   MM Limited Loan	W	($178,731)
g)     Loan to FF Unit Trust Loan	H & W	$904,570
Other assets
a)   GH Place Suburb J	W	Nil
b)     BN Bank Account ($USD10,568)	H	$14,703
c)   Motor vehicles 1 and 2	W	$7,500
d)     Motor Vehicle 3	H	$6,000
e)   Aircraft 4	H	$22,500
f)   Aircraft 5	H	$15,000
TOTAL ASSETS	$3,265,590
Superannuation interests
a)   BJ Bank Superannuation	H	$148,478
b)     BJ Bank Superannuation	W	$5,102
TOTAL SUPERANNUATION	$153,580
TOTAL POOL	$3,419,170
Notional adjustments
a)   5 April 2016 partial property settlement to husband	H	$550,000
b)     9 June 2016 partial property settlement to wife	W	$500,000
$4,469,170