RTO & SAO

[2005] FamCA 30

[2005] FamCA 30

FAMILY LAW ACT 1975

IN THE FULL COURT
OF THE FAMILY COURT OF AUSTRALIA
AT BRISBANE

Appeal No. NA 18 of 2004
  File No. BR 3168 of 2000

IN THE MATTER OF:

RTO

Appellant Husband

- and -

SAO

Respondent Wife

REASONS FOR JUDGMENT

BEFORE:                  Bryant CJ, Kay and Holden JJ
HEARD:  6th day of October 2004
JUDGMENT:           3rd day of February 2005

APPEAL - leave to appeal - application for leave to extend time within which to appeal

APPEAL - from decision of Family Court judge against a discretionary order and a costs order

COSTS - circumstances justifying an order - offers

1. This is a purported appeal against orders for costs made by Bell J on 25 March 2004.  We say purported because his Honour had on 15 September 2003 made costs orders as follows:

   "1.       That the husband pay the following costs:

   (a)two-thirds costs on a party and party basis of the letters (523 in total);

   (b)indemnity costs from 26^th May 2001 up to and including 12^th October 2001 (excluding any costs attributable to the conference held on 5^th September 2001).

   (c)costs from and including 11^th July 2003 on an indemnity basis;"

2. The order that issued contained a number of errors and omissions.  It did not accurately record the orders pronounced by his Honour.  Further, the parties had disputed the meaning of certain orders and sought his Honour's ruling with respect to those meanings.

3. The parties came before his Honour on 25 March 2004 pursuant to a liberty to apply which had been granted on 15 September (but not recorded in the order).

4. After hearing argument and submissions, his Honour made orders as follows:

   "IT IS ORDERED BY CONSENT THAT:

   (1)Each party pay one-half of the costs of the transcript of proceedings obtained for the court hearing of 15 September 2003.

   (2)It is certified that it was reasonable to brief senior counsel and counsel (sic) these proceedings.

   (3)Either party have liberty to apply in relation to any matters arising out of these orders on five (5) days notice in writing to the other party.

   (4)the husband pays the costs of the wife of and incidental to 16 March 2000 on a solicitor and own client basis pursuant to Order 38.

   (5)The application of the wife for costs in respect of the application for discovery on 25 May 2000 be dismissed.

   IT IS FURTHER ORDERED THAT:

   (6)The husband pay the costs of the wife from and including 26 May 2000 to and including 12 October 2001 on an indemnity basis pursuant to a Costs Agreement entered into between the wife and her solicitors, but not including the costs directly related to the pre-hearing conference on 5 September 2001.

   (7)That the husband pay costs of the wife from and including 11 July 2002, save for 8 and 9 September 2003, on an indemnity basis pursuant to a Costs Agreement entered into between the wife and her solicitors.

   (8)(i)       The husband pay the costs of the wife occasioned by the receipt by the wife's solicitors and their response to two-thirds of 523 letters sent to the solicitors for the wife by the husband up to and including 20 June 2002 on a solicitor and own client basis pursuant to Order 38.

   (ii)For the purposes of this Order such costs shall be subject to the discretion of the assessor and shall include the costs necessarily incurred by the wife in receiving any letter or facsimile transmission and attachments from the husband, telephone attendances on the wife for her instructions, providing her with copies of the letters and attachments and preparing responses to them and, as necessary, briefing Senior Counsel or advice and conferring with Senior Counsel whether by telephone or personally.

   (iii)For the purposes of this Order and in accordance with its terms, the costs are to be calculated by determining the whole cost occasioned to the wife by the receipt by her solicitors of the 523 letters and dividing that figure by 3 and multiplying the result by 2.

   (8)There be no orders as to costs for the hearing on 8, 9 and 10 July 2002.

   (9)There be no orders as to costs of 18 July 2003.

   (10)Any application of the husband for costs of and incidental to the applications in this matter be dismissed."

5. Counsel for the husband argues that the orders made on 25 March 2004 merely clarify and correct the orders as issued on 15 September 2003 to reflect the orders that his Honour actually made in court and which were incorrectly reflected in the orders of 15 September 2003.  In support of that contention, he referred us to the following exchange that took place on 25 March 2004:

   “[SENIOR COUNSEL FOR THE WIFE]:  Yes, your Honour, that is the only matter.  Mr O may wish to say that the original order was wrong.  He can’t do it by getting your Honour to re-open it.  We’re here effectively under a liberty to apply to have your Honour give direction as to the proper construction of the indemnity basis there and to give a proper construction to its meaning now by, we suggest, adding – putting it beyond question that in this context, indemnity basis means pursuant to the agreement.

   HIS HONOUR:  Yes.

   [SENIOR COUNSEL FOR THE WIFE]:  So, your Honour, we’re not asking to re-open, we’re seeking clarification as to what it means.

   HIS HONOUR:  Yes.  Yes, Mr O?

   MR O:  Well, your Honour, I say that’s exactly what I’m doing, your Honour, that the – [Senior Counsel for the wife] is saying that dates are incorrect and that’s what I’m saying, not with – he wants this order corrected, I’m saying the same thing.”

6. He then refers us to rule 17.01 which reads as follows:

   "17.01(1)       An order is made:

   (a)in a hearing or trial - when it is pronounced in court by the judicial officer; or

   (b)in chambers - when the judicial officer signs the order (see paragraph 11.16(3)(b)).

   17.01(2)         An order takes effect on the date when it is made, unless otherwise stated.

   …

   17.01(3)         A party is entitled to receive:

   (a)       a sealed copy of an order;

   (b)if the order is rectified by the court - a sealed copy of the rectified order; and

   (c)       a copy of any published reasons for judgment.

   17.01(4)         Subrule (3) does not apply to a procedural order."

7. He thus asserts that the appeal should have been against the orders of 15 September 2003 as clarified and corrected in the orders of 25 March 2004 and that since the Notice of Appeal was not filed until 18 April 2004 and that notice was directed against the orders of 25 March 2004, the husband is well out of time to appeal against the orders of 15 September 2003.

8. Counsel for the husband argues that the orders of 15 September 2003 are so uncertain as not to amount to a decree.  Alternatively, if that submission is not accepted, he seeks that, to the extent necessary, we grant an extension of time to appeal against those orders.

9. In order to succeed in an application for leave to extend the time within which to appeal, the applicant must satisfy the court of three things:

   (1)that there is sufficient explanation for the failure to file and serve a notice of appeal within time;

   (2)that there is a substantial issue raised by the grounds of appeal and that is one which will, if successful, materially affect the outcome of the case; and

   (3)that any hardship occasioned to the respondent because of the delay can be compensated for, and any injustice to the respondent avoided, by orders as to costs or otherwise.  (see McMahon and McMahon (1976) 2 FamLR 11,267 and Casson and Casson (1988) FLC 91-962.

10. In our view, it is unnecessary for us to determine the issue as to whether the orders of 15 September 2003 are so uncertain as to not amount to a decree because we are satisfied that there has been sufficient confusion to justify the delay.  Furthermore, so different are the two sets of orders that we would not think that the husband could realistically assess the prospects of success upon appeal until such time as the orders of 25 March 2004 were pronounced.

11. Counsel for the wife did not point to any particular hardship that would be suffered by her in the event that an extension of time was granted that could not be compensated for by a costs order, or otherwise.

12. This, therefore, leaves as the sole issue insofar as the application for extension of time is concerned, is whether or not there is a substantial issue raised by the grounds of appeal and that it is one which will, if successful, materially affect the outcome of the case.  In order to answer that question it will be necessary for us to consider the merits of the appeal.

13. His Honour began his judgment indicating that the real issue that he felt he had to determine was whether or not costs should be on an indemnity or solicitor and client basis.

14. His Honour said:

    "3.It is the submission of the wife (and I am going to encapsulate this very briefly) that the costs on an indemnity basis are justified.  I note and take into consideration in particular those tests which are set out in the submissions of [Senior Counsel for the wife], particularly at paragraph 53 under the subheading "Indemnity Costs".  In particular I refer to Munday -v- Bowman (1997) FLC 92-784. I do not intend to set them out seriatim but I do indicate that I have considered them. It is generally the submission of the wife that the husband's conduct was such that it was extreme conduct which caused the exacerbation of costs in this case."

15. He then asked the rhetorical question, "What is it alleged that the husband has done?"  His Honour answered that question as follows:

    (a)the case had been inundated by the husband with affidavits, "with long tracts; with irrelevant, vexatious and sometimes scandalous allegations contained in such documents.  A lot of the documents were largely irrelevant".  His Honour found that the trial was lengthened because of this;

    (b)the husband has failed to comply with orders for discovery.  We shall return to this aspect of the matter later in these reasons for judgment;

    (c)the husband entered into excessive correspondence.  His Honour found the greater majority of the letters written by him were unnecessary and that most were irrelevant and some were scandalous.  He estimated that two-thirds of 523 letters were unnecessary;  and

    (d)he found that the husband conducted what was, in effect, a "war of attrition" upon the wife;

    (e)on the last day of trial, the husband alleged that the wife had a one-third interest in the estate of the DE Trust which had vested because of a bottom of the harbour scheme.  Counsel for the wife was taken by surprise and sought, and was granted, an adjournment.  When the matter came back before his Honour on 24 July, a solicitor appeared on behalf of the husband and indicated that the matter was not going to be taken any further.

    His Honour summarised the additional costs occasioned by the surprise allegation, as follows:

    "24.This adjournment necessitated not only extra costs of 24 July but the costs of extensive submissions which were put forward by both counsel; quite proper submissions, very well done, but they in themselves would have been particularly expensive. As a result of this allegation, the husband caused the judgment to be delayed because by the time I was getting close to looking at it the superannuation scheme had come into force and effect and it was necessary therefore for the parties to comply with the Act by contacting the superannuation trustees, obtaining the certificates and everything like that. …"

16. The husband had made submissions to his Honour that he ought to be granted costs as a result of an offer of settlement.  All his Honour said about that aspect of the matter was contained in an addendum to his Honour's judgment where he said:

    "27.I had overlooked the offer of settlement submissions made by M of counsel.  I am satisfied that these had too many tendrils attached to them to be an offer which ought to have been accepted by the wife."

The Grounds of Appeal

1. The husband's Notice of Appeal contains four grounds which are as follows:

   "In respect of Orders 6, 7 and 8 made by His Honour Justice Bell on 25 March 2004 …

   1.The orders for costs made against the husband, that are the subject of this appeal, were not a proper exercise of His Honour's discretion; and/or

   2.The orders for costs made against the husband, that are the subject of this appeal, are inconsistent with the Reasons of 15 September 2003; and/or

   3.The orders for costs made against the husband, that are the subject of this appeal, do not reflect the manner in which the litigation has been conducted by the husband and wife in this proceeding; and/or

   4.In making the orders for costs, His Honour failed to give proper weight and due consideration to an offer of settlement made by the appellant husband to the respondent wife on 23 November 2000."

2. The husband seeks the following orders:

   "1.That the husband pays the wife's costs from 26 May 2000 until 30 June 2000 on a solicitor and own client basis.

   2.That the respondent wife pays the appellant husband's costs from 23 November 2000 on a solicitor and own client basis.

   3.That the respondent wife pays the appellant husband's costs of this appeal."

Applicable Principles

1. This is an appeal against the making of discretionary orders.  The principles applicable to such an appeal are well known and need not be restated here.  See, generally, De Winter and De Winter (1979) FLC 90-605 at 78,092 per Gibbs J; Mallet v Mallet (1984) FLC 91-507 at 79,110; (1984) 156 CLR 605 at 608; Norbis v Norbis (1986) FLC 91-712; (1986) 161 CLR 513.

2. Furthermore, it is an appeal against a discretionary order relating to costs.  In Robinson and Higginbotham (1991) FLC 92-209 the Full Court said:

   “[a]s counsel for the husband rightly submitted, this Court should be very reluctant indeed to interfere with the exercise of discretion in respect of costs.  Indeed, it may be fair to say that generally speaking this Court has been more reluctant to interfere in such determinations than it has even in respect of the exercise of discretion pursuant to s 79.  But that does not mean that this Court should.”

Submissions on appeal

1. Costs are governed by s 117 of the Family Law Act 1975 (Cth) (“the Act”). That section provides as follows:

   117(1)  [Party bears own costs]

   Subject to sub-section (2) and sections 117AA and 118, each party to proceedings under this Act shall bear his or her own costs.

   117(2)  [Costs orders]

   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.

   117(2A) [Matters relevant to costs order]

   In considering what order (if any) should be made under sub-section (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, in accordance with section 117C or otherwise, 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."

2. The relevant matters raised by reference s 117 in the context of this appeal are s 117(2A)(c), the conduct of the parties and s 117(2A)(f), offers to settle.

3. We turn first to deal with the challenge to order 6, which is:

   “The husband pay the costs of the wife from and including 26 May 2000 and including 12 October 2001 on an indemnity basis pursuant to a Costs Agreement entered into between the wife and her solicitors, but not including the costs directly related to the pre-hearing conference on 5 September 2001. 

4. In his written submissions counsel for the husband states:

   “It is submitted that, in the circumstances of this case, if it can be said that the conduct of the appellant husband raised a discretion under s 117(2A)(c), which is a matter that is not conceded, then the conduct of the appellant husband:

   (a)Did not materially affect the outcome of the proceedings; and/or

   (b)was not of such a nature that it was deserving of a costs sanction.”

5. This submission does not sit well with the orders sought in the notice of appeal which seeks that the husband pay the wife costs from 26 May 2000 until 30 June 2000 on a solicitor and own client basis.  We take that to be an admission that the making of a cost order on an indemnity basis was not outside a reasonable exercise of discretion and that the real complaint is between which dates such an order should operate.

6. The basis on which his Honour made order 6 is abundantly clear if one reads paragraphs 8, 9 and 10 of his judgment.  It was because he had failed to comply with orders for discovery.

7. The factual basis for the making of such an order was as follows:

   (a)On 25 May 2000, the affidavit of documents of the husband filed 18 May 2000 was struck out by a judicial registrar.  A consent order was made in the following terms:

   “4.      Without in any way derogating from the right of the wife to require that the husband do provide to her an Affidavit of Discovery, the husband shall deliver or cause to be delivered to the solicitors for the wife, North Quay, Brisbane, the documents referred to in paragraphs 1, 2 and 3 together with an affidavit of the husband which refers to each individual file of documents and swears or affirms that each file is complete and no documents are missing.  PROVIDED THAT the solicitors for the wife hall (sic) not require an Affidavit of Discovery until such time as inspection of all such documents has been completed and the husband has had 14 days to answer any enquiry about any document alleged to be missing.”

   A further order was made that either party have liberty to apply on five days notice in writing to the other.

   (b)On 26 May 2000 the husband wrote to the wife’s solicitors stating that he would deliver all of the files on an undertaking that they would be returned within one month.  The wife agreed to the undertaking, however, the files were not delivered.

   (c)On 30 May 2000 the wife’s solicitors received a further letter from the husband in which he stated the documents would need to be returned within three weeks and insisting upon undertakings that the documents would not be tampered with or items removed and that they would be delivered back in exactly the same condition.

   (d)On 1 June 2000 the wife’s solicitors received a further letter from the husband in which he said he was no longer prepared to deliver “all my files to you as per the consent order of 25 May 2000”.  He proposed that the wife’s solicitors meet with him at the Family Court to produce all files and documents on a particular day.  By a letter dated 2 June 2000, the wife’s solicitors rejected that proposal and required compliance with the order of 25 May 2000.

   (e)On 6 June 2000, the wife’s solicitor received a further letter from the husband indicating that he was not prepared to deliver the documents without agreed terms with respect to the delivery and indicating that he was happy to get the Queensland Law Society to set out reasonable terms.

   (f)On 14 June 2000, the husband wrote to the wife’s solicitors setting out further conditions, including that the inspection would be done within one week.

   (g)On 22 June 2000, the husband proposed different conditions yet again.

   (h)Presumably pursuant to the leave granted to relist, the matter came back before a registrar on 30 June 2000.  It was ordered inter alia:

   “(2)That the applications by the WIFE for discovery be adjourned to a date to be fixed on the giving of 10 days notice in writing to the HUSBAND and with 5 days notice in writing to the HUSBAND if it is intended to re-list the application on a date when another application is before the Court.

   (3)That the WIFE’S costs of her application for discovery filed by leave today be reserved.”

   (i)The wife’s application was adjourned apparently because the documents had been delivered pursuant to the order of 25 May 2000 on that day.

   (j)We were not directed to any re-listing of the application, or any further applications for discovery after 30 June, until the matter was re-listed for directions on 12 October 2001. 

   (k)At the conclusion of a conciliation conference held on 5 September 2001, an order was made that an updated affidavit of discovery be filed by the applicant by 18 October 2001.  It seems this was an error, as the intention was that both parties should file an updated affidavit.

   (l)The husband refused to file an updated affidavit on the grounds that the order did not refer to him.  The wife’s solicitors wrote to the husband and informed him that, irrespective of the terms of the order, there was a continuing obligation the parties to provide full and complete disclosure of all relevant documents.  The husband did not file an updated affidavit of discovery.  As a result the wife’s solicitors had the matter re-listed for further directions and on 12 October 2001 a direction was made for the husband to file a supplementary affidavit of documents. 

   (m)It was against the above factual background that his Honour ordered the husband to pay costs subsequent to 25 May, “Wherein the husband started to vary the consent order in his own mind” on an indemnity basis.

1. Counsel for the husband submits that the husband had satisfied his obligation to give discovery by 30 June 2000 and that there was no basis for concluding that he had not satisfied his obligations until 12 October 2001.  We think there is considerable force in that submission. 

2. Senior counsel for the wife argues that an ongoing failure to give discovery was not the only basis upon which his Honour ordered indemnity costs.  He argues that his Honour disapproved of the husband’s conduct generally and points to paragraphs 5, 6 and 7 of his reasons for judgment which read as follows:

   “5.What is it alleged that the husband has done?  First of all I think I should briefly look at his filing of irrelevant and repetitive material.  As I said, I am going to do this very briefly.

   6.This case has been inundated by the husband with affidavits; with long tracts; with irrelevant, vexatious and sometimes scandalous allegations contained in such documents.  A lot of the documents were largely irrelevant.

   7.The trial was lengthened in this case, not only because of this irrelevant material, but the fact that I had to read it all.  I do not care what people say, Judges should read the material before they get to Court.  That, I must say, does not technically sound in costs because no-one who is entitled to costs is expending any money over it.  It is the Judge who has to do the reading.”

3. The difficulty with that submission is although the behaviour of the husband might have given rise to a general order for costs on an indemnity basis, his Honour, in his reasons, did not link any of the behaviour of the husband described in the above paragraphs to order 6.  It seems fairly clear to us, that the sole basis upon which his Honour made the order was because of the husband’s ongoing failure to give discovery.

4. In our view, order 6 cannot stand in its present form.  Having said that, however, we have no doubt that it would be appropriate to include a provision that the husband pay the wife’s costs of and incidental to, the hearing on 12 October 2001. 

5. We note in passing, that in the husband’s written submissions with respect to the order of 15 September 2003, he has submitted that order 1 should read:  “That the husband pays indemnity costs from 26th May 2000 to 30 June 2000; and that the husband pay indemnity costs of and incidental to 12 October 2001.

6. We now turn to the challenge to orders 7 and 8, which read as follows:

   “(7)That the husband pay costs of the wife from and including 11 July 2002, save for 8 and 9 September 2003, on an indemnity basis pursuant to a Costs Agreement entered into between the wife and her solicitors.

   (8)(i)       The husband pay the costs of the wife occasioned by the receipt by the wife’s solicitors and their response to two-thirds of 523 letters sent to the solicitors for the wife by the husband from and including 20 June 2002 on a solicitor and own client basis pursuant to Order 38.”

7. It was agreed between the parties that the order was incorrectly extracted and that the word “from”, in the second line of order 8, ought to have been “up to”.

8. The sole challenge to these orders is based upon his Honour’s failure to consider an offer made by the husband.  It is argued that had his Honour properly considered the offer, then not only should he not have made an order for costs against the husband, but in fact, should have ordered the wife to pay the husband’s costs from the date of that offer.

9. Senior counsel for the wife submits that it is difficult to see any connection between the offer of settlement and orders 7 and 8.  Order 7, as is clear from his Honour’s reasons for judgment, was prompted by the conduct of the wife, leading to the incurring of unnecessary costs.  Order 8 was prompted by the scandalous nature and excessive volume of the husband’s correspondence throughout the proceedings.  Counsel submits that the orders are justified irrespective of the outcome or the existence of an earlier offer.  We agree with that submission.  In our view, it is not open to the appellant husband to hide behind an offer to avoid a cost order which arises from his inappropriate conduct which unnecessarily increased the wife’s cost.

10. The only issue then left for us to determine, is whether or not upon a proper consideration of the husband’s offer, his Honour ought to have made an order for costs against the wife. 

11. The husband’s offer was contained in a “without prejudice” letter dated 23 November 2000.  In that letter he accepted the wife’s proposal that the net asset pool be divided 53% to the respondent wife and 47% to the appellant husband.  That acceptance, however, was subject to a partial moratorium for two years in respect of child support.  In the letter the following was stated:

    “Given the limits associated with his income earning capacity and the fact that a large chunk of his property settlement entitlements are to some extent quarantined until his retirement, he is concerned about his capacity to continue to contribute child support at the level that he has been meeting.

    He therefore requests that your client give consideration to granting him a partial moratorium for say, two years in respect of child support during which time he would propose paying child support to your client fixed under a child support agreement at the rate of $350.00 a month for the first year and $350.00 a month for the second year, subject only to variation to cover indexation for cost of increase in living expenses.  At the end of the two year period our client would propose that his liability for child support revert to a liability in line with a child support assessment based on his then taxable income.”

12. By a letter dated 1 December 2000, the wife’s solicitors replied as follows:

    “Our client is agreeable to the proposal subject to two matters.  Firstly, the interest under the mortgage over the land at Palmwoods would continue to run until the date of payment of the principal.  Secondly, our client is not agreeable to a reduction in child support.  Our client is of the view that she will need the money to help support the children.  She is hoping to improve her qualifications so that ultimately she will be able to engage in employment but until that time she is unable to take a reduction in the payments by your client.”

13. There was then further correspondence which did not result in a settlement.

14. Relying upon Harris and Harris (1987) FLC 91-822, the husband submits that a counter-offer does not bring an offer to an end. We are of the view that that case does not support the proposition advanced. In Harris the Full Court said as follows:

    “The next matter which requires consideration is the effect of a counter offer upon an offer. Under the law of contract an offer is terminated by the making of a counter offer by the other party: See Hyde v. Wrench (1840) 3 Beav. 334; 49 E.R. 132.

    Thus if one were to apply the ordinary principles of contract law to this case the wife's offer of 4 February 1986 would no longer have been in existence after the husband's counter offer on 15 July 1986 was filed and served. If this were the true position in law the effect would be that any litigant who felt threatened by an offer in writing in the prescribed form could extinguish this threat merely by making a counter offer of a lesser amount.

    It is our view, however, that this is not a matter which is governed by the law of contract. It is procedural and similar considerations should apply as they do to payments into court in other jurisdictions. Thus in Cumper v. Pothecary (supra), Goddard L.J. who gave the judgment of that Court said at p. 67:

    " ... there is nothing contractual about payment into court. It is wholly a procedural matter and has no true analogy to a settlement arranged between the parties out of court, which, of course, does constitute a contract. When once the seven days have expired the plaintiff can only get the money if he can obtain an order, and before the court makes an order it must consider whether it is right so to do ..."

15. In our view, that case is distinguishable because the Full Court was there dealing with an offer made in accordance with s 117C or otherwise.

16. Although not argued before us, the issue arises as to whether or not the husband’s offer was made in accordance with s 117C or otherwise.  In Harris the Full Court said at 76,191:

    “In our view as the expression “or otherwise'', which is contained in sec. 117(2A)(f), is intended to embrace other open or not without prejudice offers made by either party.”

17. The husband’s offer was, of course, without prejudice.  It was not expressed to be without prejudice, save and except as to costs.  That being the case we would have thought that this is the end of the matter as the offer was not in accordance with s 117C or otherwise.(see Steel v Steel (1992) FLC 92-306)

18. There is, however, another argument advanced by Senior Counsel for the wife and that is the subsequent death of the wife’s father on 20 May 2001.  The SO Trust Fund was created under his Will.  The wife was a beneficiary of the fund along with her children. 

19. In his principal reasons for judgment resolving the property dispute between the parties, delivered on 18 July 2003, his Honour said with respect to the trust.

    “195.   As previously discussed at length, I am of the view that the interest of the wife and children in the SO Family Trust has significant ramifications for the future needs for both.  While the wife will have the care of the children for some time into the future, I accept that the Trust will provide a major sense of financial security for her household.”

20. His Honour went on to say:

    “198.    The matter which concerns me in particular in relation to the wife is that the wife has a beneficial interest in the SO Trust and the DE Family Trust.  Notwithstanding that these Trusts are discretionary and it does not necessarily mean that the wife will receive any financial support from those Trusts, evidence has been given that there has been some support forwarded to her and I am of the belief that notwithstanding I have found this is not property, that it is a financial resource of considerable magnitude – I believe up to something like $1.9 million – and this heavily weighs in my opinion the s.75(2) factors in favour of the husband.”

21. Senior Counsel submits:

    “It may be seen at that the circumstances of the parties, particularly those relevant under s 75(2) had altered materially after negotiations between them had broken down.  The alterations in the circumstances to the parties is such, that it is not possible to say now, even with the benefit of hindsight, that the wife’s not accepting the of 24 November 2000 (sic), unconditionally, was unreasonable.”

22. We are of the opinion that there is considerable force in that argument and this ground must therefore fail.

Costs

1. Given the outcome of this appeal we are of the opinion that it is not appropriate to make an order for costs in favour of either party.  Insofar as the applications for certificates pursuant to the Federal Proceedings (Costs) Act 1981 (Cth) are concerned, we refer to the what the Full Court said in Tyson and Tyson (No. 2) (1993) FLC 92-401, at 80,111:

   “The grant or refusal of a costs certificate under the Act is purely discretionary, and the Act itself lays down no guidelines for the exercise of that discretion. Without intending to be exhaustive, matters such as the overall reasonableness or otherwise of the attitude adopted throughout the proceedings by the party applying for the certificate to the relief sought by the other, the financial resources of the applicant, and the likely quantum of that party’s total costs of the appeal, as compared with the “prescribed maximum amount” payable upon a costs certificate (in this case $4,000.00), all appear relevant for consideration by the Court in the exercise of that discretion, as too is the fact that the funds to honour such a certificate must come from the public purse.”

2. Having regard to the above matters we are of the opinion that this is not an appropriate case to make any orders with respect to cost certificates. 

Orders

1. That to the extent necessary, the appellant be granted leave to appeal the order of 15 September 2003.

2. That the appeal be allowed in part.

3. That Order 6 of 25 March 2004, be amended by deleting the words “to and including 12 October 2001” and inserting in lieu thereof “to 30 June 2000 and of 12 October 2001”.

4. That the appeal otherwise be dismissed with no orders as to costs.

I certify that the preceding 50 paragraphs are a true copy of the reasons for judgment delivered by this Honourable Court

Associate