Sindal and Sindal (Costs)

[2011] FamCA 11

FAMILY COURT OF AUSTRALIA

SINDAL & SINDAL (COSTS) [2011] FamCA 11

FAMILY LAW – COSTS – offers of settlement – comparison to the effect of the overall division of assets pursuant to the final orders made

Family Law Act 1975 (Cth)

APPLICANT: Ms Sindal

RESPONDENT: Mr Sindal

FILE NUMBER: SYC 1122 of 2008

DATE DELIVERED: 18 January 2011

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Justice Fowler

HEARING DATE: Dealt with by written submissions in chambers

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Dura

SOLICITOR FOR THE RESPONDENT: Mr Manning

Orders

1. The wife’s application for an order for costs is dismissed.

2. No order for costs be made of and incidental to this application for costs.

IT IS NOTED that publication of this judgment under the pseudonym Sindal & Sindal (Costs) is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 1122  of 2008

MS SINDAL

Applicant

And

MR SINDAL

Respondent

REASONS FOR JUDGMENT

Introduction

1. Before the Court is an Application in a Case filed by the wife on 27 September 2010, in which she seeks that the husband pay her costs of the principal proceedings which concluded in a Judgment delivered on 6 September 2010 and which should be read as part of this Judgment.  The husband seeks that such Application be dismissed and an order that the wife pay his costs of and incidental to it.

2. Those substantive proceedings were, in brief, proceedings in which the parties sought orders for the alteration of their property interests.  They were ones in which the wife had made a significantly greater contribution to the parties’ property pool than the husband.

3. In the proceedings the wife had asserted that the husband should receive some 15% of the asset pool, although there were clear disputes as to the size of that pool.  That dispute was in large measure occasioned by a failure of the parties to bring before the Court the clear position of each of the entities in the case namely the parties individually, the parties in partnership with each other and the corporation which ran the business known as H Company and in relation to the running of which scant regard had been paid to its separate identity.  The Court found that the wife had not given informed or careful consideration to her financial disclosures in the matter.

Section 117 considerations

1. The Court has a broad discretion as to the orders that it makes for costs and that discretion is set out in section 117(2) of the Family Law Act 1975 (“the Act”). In the consideration of the exercise of that discretion I am obliged to consider the matters set out in section 117(2A) of the Act. Those matters are set out in the following sub sections of that section namely:

(a)      the financial circumstances of each of the parties to the proceedings

1. As a result of the proceedings the property of the parties and either of them was distributed unequally with the wife receiving the bulk of such distribution and the husband acquiring the minor portion of the property.

2. In relation to the current application before the Court each of the parties filed a Financial Statement.  The wife asserts that her average weekly income is $1,423 and that her personal expenditure is $947.  The wife further claims ownership of property to a value of $1,075,000 together with superannuation of $52,856.56.  The wife says that her liabilities are in the sum of $595,224.64.

3. In his Financial Statement the husband claimed an average weekly income of $1,441 and weekly expenditure of $1,632.  He claims present assets of $1,050,000 and superannuation of $42,144.  Further claimed by the husband are liabilities of $846,695.

4. Based on a consideration to the Judgment the wife will receive as a result of the judgment net assets to the value of $834,680 and the husband will receive net assets to the value of $208,670.  In order to achieve that position the wife was obliged to pay to the husband the sum estimated at $152,151 expressed as a percentage of the sale proceeds of H Business.  The final position of the parties will not be known until the property comprising H Business is realised.  It is true that on a sale of that Business the wife will not then have an income but she is skilled and should procure employment if she wishes to do so.  It is clear that as to capital the wife will be in a better position than the husband and indeed significantly so.

(b)      whether any party to the proceedings is in receipt of legal aid and, if so, the terms of the grant of that assistance to that party

1. So far as the Court is aware neither party is in receipt of Legal Aid.

(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

1. In these proceedings matters arose which were the cause of some concern, namely in relation to the wife’s non-disclosure of information and the supply of information which was probably negligently or ignorantly, rather than deliberately, incorrect.

(d)      whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court

1. It is asserted that the wife did not comply with orders made in the proceedings but to the extent that that is so it is not accorded great weight in these deliberations.

(e)      whether any party to the proceedings has been wholly unsuccessful in the proceedings

1. Neither party has been whole successful or 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

1. Offers were made to settle the proceedings in July 2099.  The wife asserts that her proposal to settle would have left the husband better off than the Orders made in the proceedings.

2. At the final hearing I was asked by the parties to remove the items comprising tools and household effects, since agreement had been reached for a division of those assets.  I found the net assets of the parties, including superannuation, to be $1,043,350 and assessed the parties’ contributions as to 80% in favour of the wife and 20% in favour of the husband.

3. There had been a history of negotiation in the matter.  The husband sought a payment of $225,000 based on a net asset pool which at that time was asserted to be $1,400,000, having been agreed upon as at 1 July 2009.  In addition, the husband sought the payment of credit card liabilities amounting to almost $40,000 in addition to golf club membership and art works and miscellaneous personal items, tools and wine.  The wife’s offer did not include those matters.

4. Indeed it seems that the history of the matter has involved a number of Offers of Settlement having been made, with the husband asserting that the first offer made was by the wife’s solicitors on 1 September 2008.  In considering the offers more recently made, the husband submits that an Offer of Settlement made by the wife on 13 July 2009 would have resulted in the wife receiving 79.42% and the husband 20.58%, and I note that such a division of assets is close to that which was received by the wife pursuant to the Orders of

   
   

   6 September 2010.

5. The wife asserts that in the July and August 2009 period the parties were approximately $15,000 apart in their respective Offers.  In relation to the wife’s offer in her letter of 13 July 2009 the husband disagrees and says that the parties were not $15,000 apart and that her offer did not include the payment of credit card liabilities, golf club membership, art works, miscellaneous personal items, tools and wine.  It thus appears that the husband proposed he receive a payment of $225,000, in addition to the payment of credit card liabilities of $39,647 and golf club membership at $1,000 and further household items were sought to be retained by him.  A document titled “Schedule of Split from Wife’s Offer” and attached to the husband’s affidavit filed 2 December 2010 gives a value of the wine cellar at $6,000, household contents at $5,000 and tools at $5,000.  Consequently, the total value of these items is some $281,647.  This accounts for approximately 20.12% of the next asset pool of 1 July 2009.

6. The husband deposes to having subsequently made an Offer of Settlement dated 31 July 2010 would have resulted in the wife receiving 76% of the assets and the husband receiving 24% of the assets.  In relation to this the husband sought that the wife pay to him $225,000 in addition to one-half of the credit card liability, being $19,823.50, and that the husband retain his superannuation, golf club membership, art works, miscellaneous personal items, tools and wine.  The artworks, miscellaneous items and wine were set out in a schedule, but a value was not provided in that document.  Based on that, and the valuations set out above, I estimate the husband would have received approximately $284,144 not including the credit card liability, and $303,967.50 upon adding back half of that liability.

7. The wife argues that the Offers of Settlement made by her on 12 and 13 August 2009 placed the husband in a better position than the Orders of 6 September 2010.

8. In relation to the Offer of Settlement made by the wife under cover of letter dated 12 August 2009 the wife asserts that it provided that the husband would receive a sum of $210,000 from the wife and retain certain tools and artworks.  It is asserted by the wife in her written submissions that the personal items and superannuation amounted to at least $43,144 and that thus in total the husband would receive assets of $253,144.  The wife argues that this was approximately $45,000 more than what the husband received as a result of the Final Orders.  If that were based on the net asset pool then asserted to be $1,400,000 I calculate that this offer would have resulted in the husband receiving approximately 18% of the parties’ net assets.

9. In relation to the offer made by the wife in a letter dated 13 August 2009, the husband submits that this was a split of 78.46% to the wife and 21.36% to the husband.  However, in Annexure “E” of the wife’s affidavit filed 8 November 2010 she asserts it would have resulted in the husband receiving 25% of the net asset pool.

10. In any event, in considering the various Offers of Settlement made at various times and over the course of some 12 months I consider that neither party achieved a far better result following the orders made by the Court on

    
    

    6 September 2010.

    (g)such other matters as the Court considers relevant

11. The husband submits that neither party achieved a better result from the Court following the orders made, and with that submission I agree.

Conclusion

1. In the exercise of the Court’s broad discretion to make an order for costs and taking into account all the matters referred to above and, in particular, the financial position of each of the parties, the conduct of the proceedings and the offers to settle, the Court is not convinced that the primary position that each party should pay their own costs should be varied.  The application before the court was not unarguable and in the exercise of its discretion the Court will not make any order for costs of this application.

I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Fowler delivered on 18 January 2011.

Associate: 

Date:  18 January 2011