Wakehurst and Molvig
[2008] FMCAfam 789
•13 October 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| WAKEHURST & MOLVIG | [2008] FMCAfam 789 |
| FAMILY LAW – Costs. |
| Family Law Act 1975, s.117(1), (2A) |
| Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 |
| Applicant: | MR WAKEHURST |
| Respondent: | MS MOLVIG |
| File Number: | BRM 1126 of 2005 |
| Judgment of: | Burnett FM |
| Hearing dates: | 5 & 6 February 2007 |
| Delivered at: | Brisbane |
| Delivered on: | 13 October 2008 |
REPRESENTATION
| Counsel for the Applicant: | Mr J. Selfridge |
| Solicitors for the Applicant: | WP Lawyers |
| Counsel for the Respondent: | Mr N. McGregor |
| Solicitors for the Respondent: | KL King & Associates |
| Counsel for the Independent Children’s Lawyer: | Mr Fleetwood |
| Solicitors for the Independent Children’s Lawyer: | Legal Aid Queensland |
ORDERS
That the Applicant husband pay the Respondent wife’s costs of and incidental to the proceeding including reserved costs, if any, and that such costs be assessed upon an indemnity basis.
IT IS NOTED that publication of this judgment under the pseudonym Wakehurst & Molvig is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRM 1126 of 2005
| MR WAKEHURST |
Applicant
And
| MS MOLVIG |
Respondent
REASONS FOR JUDGMENT
Background
A judgment in this matter was delivered on 30 June 2007. At that time the parties were requested to prepare a draft order giving effect to the outcome. The matter of costs was not dealt with.
As noted at paragraph [134] of the judgment the effect of my assessment in the property settlement proceeding was to apportion the estate 40% to the Applicant husband and 60% to the Respondent wife. I had assessed the matrimonial property pool as having a value of $569,659.79. Consequently the wife succeeded in obtaining an order in her favour to the value of $341,795.87 and the husband an order in his favour for a sum of $227,863.91.
In the proceeding the wife also cross claimed for a departure order. She was successful in respect of that Application.
Relevant Facts
By his Application the Applicant sought orders that each party retain property of which they stood possessed at the time of the Application and that the departure application by the wife be dismissed. The value of the husband’s property at the time of application was approximately $325,697.00 given my assessment of the value of the property pool.
The wife responded seeking orders that each party keep property in their possession but that also the husband pay the wife a sum of $80,000. The value of her claimed response premised upon my assessed value of the property pool was $322,162.79.
Immediately it can be seen that from the time of the Respondent wife’s Response, her proposed orders represented a claimed outcome that was less favourable than the result. In addition her claim for a departure order represented a less favourable outcome on her part than the final order.
Despite the very favourable initial claim the wife made a number of later offers to settle. Each offer represented an offer to the husband to settle on terms which were more favourable to him than the final judgment against him. Those offers were:
a)On 21 October 2005 an offer made under the Court Rules settle on the basis that each party keep property in their possession and that the wife pay to him a sum of $50,000.
b)In November 2006 the wife filed an offer in her case outline whereby she offered to accept a sum of $130,000 by way of property settlement for both the property and the departure application.
c)In his case outline the husband offered that each party walk away and retain those assets in their possession.
Costs in these proceedings are relevant subject to section 117 and section 117AB. So far as is relevant, section 117 provides:
“(1) Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AB, 117AC and 118, each party to proceedings under this Act shall bear his or her own costs.
…
(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 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.”
Concerning the matters identified in section 117(2A) I make the following observations:
a)The husband is a tradesman. As I indicated in my judgment I am satisfied that he has the capacity to earn a comfortable income. By way of contrast the wife’s position is not so rosy. She has not been able to undertake effective full time employment because she has been principally involved in the homemaking and parenting responsibilities for the child of their relationship. In addition she has the responsibilities of children from an earlier relationship. Presently she is not working and is not capable of so working and is largely reliant on social security.
b)Neither party is in receipt of legal aid.
c)I formed the view that the wife has conducted herself appropriately in the course of the proceeding. The contrary does not apply to the husband. For reasons which are outlined in the decision I am not satisfied that the husband has assisted in all respects in this Application. In particular I formed the view that he intentionally withheld information concerning his purchase of his factory and he sought to frustrate the efforts of the valuer in valuing the business. As I noted in my judgment I consider the expert was frustrated and delayed by the husband, by reason of those matters the Application proceeded to trial in the absence of a report that more accurately reflected the value of the business.
d)There are no allegations that the proceedings were necessitated by a failure of the parties to comply with an order of the court. Whilst that may strictly be correct the fact is that the pervasive mistrust arising by reason of the Respondent’s failure to address issues raised by the expert unquestionably necessitated the intervention of the Court to resolve this application. The husband did fail in respect of his defence to the departure application but clearly had a success in terms of an award in his favour in respect of the property settlement issues. It cannot be said that in this case any party was “wholly unsuccessful in the proceedings”.
e)Offers were exchanged between the parties. From the perspective of the relief sought by the parties and the offers which were immediately exchanged by the wife in her Response and subsequent offers it can be seen that the husband was in fact wholly unsuccessful. He did not succeed in achieving any award that was better than the wife’s initial claim detailed in her response.
f)The only other matter which is relevant is the fact that the husband failed or refused to participate in a mediation conference convened by the Court to assist the parties in resolving the matter. His approach in that regard was entirely unreasonable. With the assistance of a mediator he may well have been persuaded to resolve the matter without need for judicial intervention.
In addition I note the direction provided by section 117AB which requires the Court to order a party to pay some or all of the costs of another party where in proceedings before the Court the Court is satisfied that a party to the proceedings has knowingly made a false allegation or statement in the proceedings. As I have noted in my judgment at paragraph [27] the husband sought to mislead the Court about a significant asset acquired during the course of the marriage namely the [B] factory. In all of the circumstances it seems appropriate to me that the usual rule provided in section 117(1) should be displaced and there should be an order for costs in favour of the respondent wife.
The wife also seeks orders for costs on an indemnity basis. I have earlier addressed matters relevant to the order of costs generally.
In addition to the husband’s mendacity I also take into account the fact that the wife’s offers contained in her Response and subsequent offers to settle including the offer in her case outline represented an outcome that was far less favourable to her than the ultimate judgment. In my view she was put to the unnecessary expense of litigation. The husband was perhaps emboldened by his control of information which no doubt resulted in a frustration of the valuation process but also sought to mislead in relation to the value of other assets, including the factory, acquired through the course of the marriage. The circumstances of this case clearly warrant a departure from the usual order that costs be assessed on a standard basis. Most particularly in this case was the husband’s imprudent refusal to accept an offer to settle which in all the circumstances were reasonable. Additionally the husband’s conduct in prosecuting his claim well knowing he refused to co-operate with the valuer and his deceit in respect of the industrial unit extended the time and costs of both preparation and trial. It would in all the circumstances be unfair for the wife to have her entitlements diminished by the value of unnecessary costs incurred.
In all of the circumstances I think it is appropriate he pay costs on an indemnity basis consistent with the principles expressed by Shepherd J in Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225.
Summary
The circumstances of the case warrant departure from the usual order under section 117(1). The husband should pay the wife’s costs of and incidental to the proceedings. The husband’s conduct through the course of the proceeding renders it appropriate that such costs be awarded on an indemnity basis.
Orders
The Applicant husband pay the Respondent wife’s costs of and incidental to the proceeding including reserved costs, if any, and that such costs be assessed upon an indemnity basis.
I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of Burnett FM
Associate: Beverley Schmidt
Date: 28 July 2008
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