WAKELEY & WAKELEY (No.2)
[2020] FCCA 652
•14 April 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| WAKELEY & WAKELEY (No.2) | [2020] FCCA 652 |
| Catchwords: FAMILY LAW – Costs – offer of settlement by Husband – not accepted by Wife – parties conduct – late disclosure – no failure to comply with previous orders – no circumstances that would justify costs order. |
| Legislation: Family Law Act 1975 (Cth), s.117 |
| Cases cited: Penfold v Penfold (1980) 144 CLR 311 Northern Territory of Australia v Sangare [2019] HCA 25 Trevi & Trevi (No 3) [2019] FamCAFC 58 |
| Applicant: | MS WAKELEY |
| Respondent: | MR WAKELEY |
| File Number: | SYC 1927 of 2015 |
| Judgment of: | Judge Morley |
| Hearing date: | 4 April 2019 |
| Date of Last Submission: | 4 April 2019 |
| Delivered at: | Sydney |
| Delivered on: | 14 April 2020 |
REPRESENTATION
| Counsel for the Applicant: | Mr Dura |
| Solicitors for the Applicant: | Linden Legal |
| Counsel for the Respondent: | Mr Othen |
| Solicitors for the Respondent: | Whitfields Solicitors |
ORDERS
That the husband’s Amended Application in a case filed 5 March 2019 is dismissed.
That in relation to the substantive proceedings and the husband’s application for costs, each party shall bear his and her own costs.
IT IS NOTED that publication of this judgment under the pseudonym Wakeley & Wakeley (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 1927 of 2015
| MS WAKELEY |
Applicant
And
| MR WAKELEY |
Respondent
REASONS FOR JUDGMENT
Introduction
The substantive proceedings between Ms Wakeley as the applicant wife (‘the wife’) and Mr Wakeley as the respondent husband (‘the husband’) were proceedings for property settlement orders under section 79 of the Family Law Act 1975 (Cth) (‘the Act’). The proceedings were heard and determined on a final basis by his Honour Judge Harper (as his Honour then was) on 19 and 20 March and 19 April 2018, with judgement delivered and orders made on 18 December 2018. The judgement and orders were subsequently corrected in relation to some clerical errors by orders made on 30 January 2019. The final orders were varied on 1 October 2019, but that variation has no bearing on this Application for costs.
His Honour determined that the net matrimonial asset pool be divided 62% to the wife and 38% to the husband. The variation of the final orders was by consent of the parties on 1 October 2019. One such consent order was a variation as to how interest was to be calculated on a sum payable by the wife to the husband, and the other was a variation to an order dealing with certain rugby jerseys (‘the jerseys’) so as to remove any benefit from the sale or otherwise of those jerseys passing to the wife and providing her an indemnity, in place of the original order in which she would have received 62% of the net proceeds of sale of those jerseys.
On 14 January 2019, the wife filed a Notice of Appeal in relation to orders made in December 2018 and the wife discontinued that appeal on 26 June 2019.
On 15 January 2019, the husband filed an Application in a Case seeking an order that the wife pay his costs of the proceedings from 14 November 2016 to the date of judgment – 18 December 2018 – and that the wife pay his costs of the Application for costs. On 7 February 2019 orders were made that the husband file and serve written submissions and any affidavit in support of his Application for costs within 28 days and that the wife file and serve written submissions in response and any affidavit in support 28 days thereafter. Upon receiving the wife’s written submissions in relation to costs judgement was reserved.
On 5 March 2019, the husband filed an Amended Application in a Case seeking the following orders:
1. That the applicant wife pay the costs of this application in a case.
2. That the wife pay the costs of the proceedings as and from 15 November 2016 as assessed under the family law rules 2004, if not agreed, such payment to be paid within 14 days of agreement or assessment.
3. That by way of order for costs, the wife pay the sum of $4026 payable to A Pty Ltd on invoice is … as the husband shall direct in writing, within is 14 days of the date of the making of this order.
4. That the wife shall pay the husband’s legal costs and disbursements of the proceedings from 14 November 2016 until the date of judgement within 28 days of the date of judgement of the full Court [sic] in the wife’s appeal of the final orders made 18 December 2018.
5. The costs at order four shall be as agreed or assessed in accordance with part 19 of the Family Law Rules 2004.
The husband filed an affidavit in support of his Application for costs, sworn or affirmed by the husband on 5 March 2019. On 6 March 2019 the husband filed an Updated Summary of Argument prepared by Mr Othen of Counsel.
On 4 April 2019, the wife filed an affidavit setting out the evidence upon which she relied in opposition to the Application for costs made by the husband and an Outline of Submissions prepared by Mr Dura of Counsel.
In determining the costs Application I have read the Reasons for Judgment of Judge Harper (as corrected) and I have read and considered carefully the evidence contained in each of the party’s affidavits as referred to above.
The law
Costs in relation to matters under the Act are governed by section 117 of the Act, which provides in subsection 117(1) that the normal position in relation to costs in family law matters is that “each party to proceedings under this Act shall bear his or her own costs.”[1]
[1] Family Law Act 1975 (Cth) s117(1).
Subsection 117(2) of the Act provides for a departure from the usual rule in subsection 117(1) as follows:
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), (4A), (5) and (6) 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.[2]
[2] Family Law Act 1975 (Cth) s117(2).
Subsection 117(2A) of the Act provides as follows:
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 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 made an offer in writing to the other party to the proceedings to settle proceedings in the terms of any such offer; and
(g) such other matters as the court considers relevant.[3]
[3] Family Law Act 1975 (Cth) s117(2A).
If, having considered the matters referred to in subsection 117(2A) the court is of the opinion that the circumstances justify a departure from the usual rule that each party bear his and her own costs then the court must determine the quantum of the costs to be awarded.
Pursuant to section 117(2) a finding by the court of circumstances that justify the making of a costs order is the necessary preliminary determination to the making of an order. Beyond that there is no additional or special onus on an applicant for a costs order.
In Penfold v Penfold (1980) 144 CLR 311[4] (‘Penfold’) the High Court discussed section 117 of the Act and said:
It is an accurate description of s. 117 (1) to say that it expresses a general rule, provided that it is firmly understood that the sub-section is not paramount to s. 117 (2). As sub-s. (1) is expressed to be subject to sub-s. (2) the former must yield whenever a judge finds in a particular case that there are circumstances justifying the making of an order for costs.
Sub-section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the 2 provisions which imposes any additional or special onus on an applicant for an order for costs. Consequently, with respect to their Honours in the Family Court, we do not agree with the suggestion made in the judgement under appeal that an order can only be made under s. 117 (2) in “a clear case”.
[4] Penfold v Penfold (1980) 144 CLR 311, 315 (Stephen, Mason, Aickin and Wilson JJ).
The courts discretion in relation to costs is broad and the considerations listed in subsection 117(2A) are not restrictive.[5] There is nothing to prevent any one factor in this subsection being the sole determinant for an order for costs.[6]
[5] Penfold v Penfold [1980] HCA 4; (1980) 144 CLR 311, 315.
[6] PBF as Child Representative for AF (Legal Aid Commission of Tasmania) & TRF &LKL (2005) 33 Fam LR 123, 130.
Offers of settlement are an important section 117(2A) consideration in determining the question of costs. Section 117(2A)(f) requires the court to consider any offer in writing to settle the proceedings and the terms of any such offer.[7]
[7] Trevi v Trevi (No 3) [2019] FamCAFC 58; 60 Fam LR 15.
In Browne v Green (2002) 29 Fam LR 428; [2002] FamCA 791 at [57] the Full Court said:
“We think that whilst s 117 (2A) does not provide any direct guidance to where weight should be given in any one particular case, it is very important for the court to give proper consideration to written offers of settlement that have been made. The insertion of s 117C into the legislation is a clear indication of the desire of Parliament to enable parties to avoid unnecessary litigation by indicating to the other party an appropriate basis upon which litigation can be settled. The failure to heed a reasonable offer in circumstances where there is adequate knowledge of the parties at the time the offer is made to give it proper consideration, is something to which very significant weight indeed ought normally to be given …”
Rule 21.02 of the Federal Circuit Court Rules 2001 (Cth) (“the Rules” provides:
“(1) An application for an order for costs may be made:
(a) at any stage in a proceeding; or
(b) within 28 days after a final decree or order is made; or
(c) within any further time allowed by the Court.
(2) In making an order for costs in a proceeding, the Court may:
(a) set the amount of the costs; or
(b) set the method by which the costs are to be calculated; or
(c) refer the costs for taxation under Part 40 of the Federal Court Rules or under Chapter 19 of the Family Law Rules; or
(d) set a time for payment of the costs, which may be before the proceedings is concluded.”
Rule 21.10 of the Rules provides:
Unless the Court otherwise orders, a party entitled to costs in a proceeding (other than a proceeding to which the Bankruptcy Act applies) is entitled to;
(a) costs in accordance with Parts 1 and 2 of Schedule 1; and
(b) disbursements properly incurred.
I note here that though rule 21.10 provides that costs in the Court be in accordance with Parts 1 and 2 of Schedule 1 to the Rules, rule 21.11(2) provides that if costs in the court are taxed the taxing officer must apply the scale of costs set out in Schedule 3 to the Family Law Rules[8] for family law or child support proceedings, with Schedule 1 of the Federal Circuit Court Rules[9] being composed of ‘composite amounts’ for stages in the proceedings and Schedule 3 in the Family Law Rules being composed of per item of work or per hour amounts.
[8] Family Law Rules 2004 (Cth) sch 3.
[9] Federal Circuit Court Rules (Cth) sch 1.
The evidence and submissions of the husband
On 14 November 2016 the solicitors for the husband forwarded to the solicitors for the wife as an email attachment a letter dated that date setting out an offer of settlement proposing, in summary, that real property at Suburb B be sold, that moneys as claimed ($180,000.00 each) be paid to two of the wife’s siblings and that the net proceeds of sale be divided as to 65 % to the wife and 35 % to the husband, that the Motor Vehicle C and the Business be retained by the husband, a private Corporation be retained by the husband, the jerseys be sold and the net proceeds of sale be paid to the wife and otherwise the parties retain what they have and each be responsible for their own separate liabilities.[10] The offer was not accepted by the wife.
[10] Affidavit of Respondent Husband filed 5 March 2019,[2].
On 5 September 2017 a further offer was conveyed to the solicitors for the wife by the solicitors for the husband by way of a letter of that date attached to an email, proposing settlement on the basis that within 42 days the wife pay the husband $500,000.00, failing which the Suburb B real property would be sold and the husband paid $500,000.00 from the sale plus 35 % of any sale price in excess of $1,800,000.00, with the balance of the net proceeds of sale being payable to the wife, the jerseys to be sold by public auction and the net proceeds of sale divided equally between the parties, a private corporation to be retained by the husband and otherwise the parties retain what they have and each be responsible for their own separate liabilities.[11] The offer was not accepted by the wife.
[11] Affidavit of Respondent Husband filed 5 March 2019,[4].
No written offer of settlement was made by the wife to the husband in the proceedings.
The husband asserted that in order to meet the case put by the wife that he had not contributed any of his income to payments into a loan account secured by mortgage on a relevant real property, he engaged the services of A Pty Ltd as forensic accountants at a cost of $4026.00 inclusive of GST.
In the written submissions filed on behalf of the husband Mr Othen of Counsel argued that there were circumstances that justify the Court in making an order that the wife pay the husband’s costs on three bases:
a)First, that the wife’s conduct in the proceedings in maintaining until Hearing a dispute as to whether or not the husband had made financial contributions from his income during the marriage, necessitating the collation and presentation of evidence by the husband, with forensic accountant assistance from A Pty Ltd, only for such evidence to be accepted by the wife at the hearing and accepted by the Court in assessing the parties’ contributions in the judgement, and reflected in the final orders;
b)Second, that the husband’s first offer set out in the letter of 14 November 2016 provided a better result for the wife than she obtained at trial in that under that proposal the husband would have received 35% of the remaining proceeds of sale of the Suburb B property after payment out of $360,000.00 to two of the wife’s siblings, (being a payment out that did not occur in the final orders made following trial), and the amount payable to the husband from the proceeds of sale under that proposal being consequently a result providing far less to the husband than the 38% of the net matrimonial asset pool that he was awarded after trial; and
c)Third, that the husband’s second offer set out in the letter of 5 September 2017, which proposed that the wife pay to the husband a sum of $500,000.00 without requiring a sale of the Suburb B property unless the wife failed to make such payment, being a lesser sum than the $541,707.00 ordered to be paid by the wife to the husband in the final orders. As against this was the proposal in the offer that the wife receive 50% of the net proceeds of sale of the jerseys as opposed to the 62% she was awarded in the final orders (based on a value of $72,000.00 for the jerseys, as found by his Honour in the judgement, a difference of $8,640.00 less to the wife from the sale of the jerseys).
The contention of the husband in his Application was that he should have an order that the wife pay costs from 14 November 2016 until judgment, assessed under the Family Law Rules 2004 (Cth) and the A Pty Ltd disbursement in full. The husband also sought his costs of the costs Application.
The evidence and submissions of the wife
The wife did not file a formal Response to Application in a Case, but it is beyond doubt that both parties proceed on the basis that the husband’s Application that the wife pay his costs was opposed by the wife.
In her evidence and in the written submissions on her behalf provided by Mr Dura of Counsel, the wife opposed the husband’s costs Application on three bases:
a)First, that she was impecunious;
b)Second, that the husband’s conduct during the proceedings was such that she was not in a position to give proper consideration to either written offer of settlement made by the husband because the husband’s failure of full and frank disclosure left her without adequate knowledge to found such property consideration; and
c)Third, that the husband’s conduct during the proceedings in failing to comply with interlocutory orders of the court and in failing to give full and frank disclosure in a timely manner disentitled him to the benefit of a costs order.
In her affidavit evidence the wife makes plain that an order that she pay any of the husband’s costs would, in a current financial circumstances, necessitate a sale of the Suburb B real property retained by her under the final orders.[12] Impecuniosity of itself is no bar to the making of an order for costs if the Court is otherwise persuaded that such an order should be made.[13]
[12] Affidavit of Applicant Wife filed 4 April 2019, [11-13].
[13] See for example D & D (Costs) (No 2) (2010) FLC 93-435; COG15 and Child Support Registrar [2016] FamCAFC 272; Kent & Kent (No 4) [2017] FamCA 1053; Orchide & Orchide [2018] FamCAFC 58; and Northern Territory of Australia v Sangare [2019] HCA 25, (2019) 93 ALJR 959
Further, the fact that the Suburb B real property was retained by the wife in the final orders would not of itself present any form of bar to a costs order being made if the Court otherwise found that there were circumstances justifying the making of a costs order.
Some of the evidence presented by the wife in relation to her asserted lack of knowledge to properly consider the husband offers relates to the issue of the true ownership of the jerseys. The wife asserted that the jerseys were property available for division between the parties in the property settlement, being the property of either husband or the corporation D Pty Ltd. The husband asserted that the jerseys were the property of a third person. However, both offers of settlement put forward by the husband dealt with the jerseys as if they were matrimonial property available for distribution between the parties. Both offers proposed that they be sold and the whole (in the first offer) or 50% (in the second offer) of the net proceeds be paid to the wife.
The wife’s affidavit evidence also dealt with the husband’s failure of disclosure in relation to his income from a business, asserting that such disclosure was only completed in consequence of a Notice to Produce served by the wife’s solicitors on the husband through his solicitors on 14 March 2018 in preparation for the hearing that took place on 19 and 20 March 2018.[14] On a close examination of the annexures to the wife’s affidavit of 4 April 2019 and her sworn evidence in that regard there is merit in the wife’s contention that there was a failure of full and frank financial disclosure and late disclosure by the husband.
[14] Affidavit of Applicant Wife filed 4 April 2019, [17].
The wife asserts in both her affidavit and written submissions that both offers made by the husband were made on the basis that the wife would have to sell the Suburb B property. However, whilst the first offer was made on that specific basis, a payment to the husband coming from the net proceeds of sale, the second offer proposed a payment by the wife to the husband of a sum less than the sum ordered to be so paid in the final orders, with the Suburb B property to be sold only on a failure of payment by the wife, as is the case with the final orders.
The wife submits that she was “not imprudent in failing to accept the offers” due to the husband’s failure to resolve the issue relating to the true ownership of the jerseys, his failure of disclosure in relation to his income from all sources from 21 August 2016 to the issue of the Notice to Produce on 14 March 2018, and his failure until the issue of the Notice to Produce to disclose his full financial records for E Pty Ltd from 23 August 2015 to 14 March 2018.
I do not accept the wife’s submission relating to the issue of the true ownership of the jerseys as both offers made by the husband resolve that issue by proposing a sale of the jerseys and a payment of the whole of the net proceeds of sale to the wife in the first offer and 50% of those net proceeds in the second offer.
As indicated above, the wife’s submission in relation to the husband’s failure of disclosure in relation to his income and financial affairs is a valid argument going to the conduct of the husband in relation to the proceedings and I find on the basis of the evidence before me in relation to this application that there was such a failure of disclosure on the part of the husband and that such a failure meant that the wife did not have adequate knowledge at the time either offer was made to give such offers proper consideration.
The wife further submits that in the event that the Court determines that a costs order should be made in favour of the husband, such costs order should not include the disbursement for A Pty Ltd’s forensic accountancy services on the basis that no affidavit by a forensic accountant was relied upon by the husband at hearing nor was any report or other document produced by a forensic accountant tendered by the husband at hearing. Against this, the husband submits that it was necessary for him to engage the services of a forensic accountant to assist with the collation of his evidence of financial contribution by him from his income during the relationship and in particular by contribution to repayments to the loan account secured by mortgage on the parties real property.
Consideration of the relevant matters referred to in subsection 117 (2A)
(a) The financial circumstances of each of the parties to the proceedings
The wife provided some evidence of an asserted deterioration in her financial circumstances since the trial in consequence of borrowings made by her subsequent to trial and a change in her employment circumstances. That evidence, together with the findings of the learned trial judge set out in the Judgment, are relied upon by the wife to ground her submission that she lacks the financial capacity to meet an order for costs as sought by the husband or at all, as such an order would require her to sell the former matrimonial home.
As detailed above, impecuniosity is not a bar to the making of an order for costs if the court finds that it is otherwise proper to make an order for costs. Nevertheless, given the wording of subsection 117(2A)(a) of the Act the financial circumstances of the parties are capable of being a determining consideration even where any one or more of the other considerations in the subsection apply. In this regard the comments of the High Court of Australia in Northern Territory of Australia v Sangare[15] at paragraph 32 must be applied in matters under the Act with the terms of section 117 in mind.
[15] Northern Territory of Australia v Sangare [2019] HCA 25
The husband provides no updated evidence in relation to his financial circumstances in his affidavit relied upon in relation to this Application.
In all the circumstances I find that the financial circumstances of each of the parties is not a consideration that would weigh against the making of costs order in favour of the husband if there are circumstances that justify the making of that order found in my consideration of the other matters referred to in subsection 117 (2A) of the Act.
(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
The husband relies on the conduct of the wife in the proceedings in maintaining a dispute in relation to his financial contributions from his income during the relationship and in particular in relation to payments by him into a loan account secured by way of mortgage on the parties’ real property. The husband asserts that it was necessary for him to engage the services of a forensic accountant to assist with the collation of his evidence for presentation at trial in this regard and that therefore the wife should be ordered to pay to him the amount charged to him by A Pty Ltd in their Tax Invoice in the sum of $4026.00 (inclusive of GST). The husband submits that the relevant conduct by the wife was a denial of his contributions in this regard, which necessitated his expenditure on legal costs and the disbursement for assembling and presenting his evidence on the issue with the wife conceding at the hearing that the figure asserted by the husband in relation to his contribution, arrived at through the assistance of the forensic analysis, was correct.
The real basis of the husband’s submission is that his contributions in this regard were well known to the wife and could have been considered by her earlier than the hearing during a course of correspondence between the parties’ solicitors, but that such contributions were deliberately denied by her up until the hearing. On its own this consideration may well ground an order that the wife pay some of the husband’s costs and in particular his costs relating to his assembly and presentation of evidence on this issue.
However, the wife’s submission in relation to the husband’s conduct must also be considered under this heading.
The wife submits that the husband’s conduct in failing to make full and frank disclosure at any time before his response to the Notice to Produce served on him on 14 March 2018 – five days before the commencement of the trial – left her in a position of being unable to make a proper assessment of the parties relevant contributions and any adjustments under section 75(2) of the Act until the very eve of the hearing.
The wife further submits that the husband’s conduct in failing to comply with orders of the court in relation to disclosure and in relation to the establishment of the true position concerning the ownership of the jerseys meant that the wife incurred greater costs by reason of additional Court appearances and correspondence between the parties’ solicitors. I find that there is force in this submission by the wife and I therefore find that there was conduct on the part of each of the parties in relation to the proceedings that could bear on the question of costs, the conduct of the husband in failing to comply with orders and failing to comply with his obligation to give full and frank disclosure being a consideration in counterbalance to the conduct of the wife in forcing the husband to the assembly and presentation of his evidence in relation to his financial contributions from his income.
(d) Whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court
There is no evidence of a failure on the part of the wife to comply with any previous orders of the court, and so this consideration provides no grounds for the making of an order that the wife pay all or any of the husband’s costs of the proceedings. Rather, the evidence shows that there was a failure on the part of the husband to comply with previous orders of the court, being interlocutory orders made by the court during the currency of the proceedings.
(e) Whether any party to the proceedings has been wholly unsuccessful in the proceedings
On the basis of the competing Applications presented by the parties on Hearing neither party has been wholly successful and neither party has been wholly unsuccessful.
(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
Two written offers were made by the husband to the wife in the course of the proceedings. There is no evidence of any written offers being made by the wife to the husband. The husband gives evidence in his affidavit that the “wife made no offer of settlement in writing in these proceedings.”[16]
[16] Affidavit of the Husband filed 5 March 2019, [5].
The first offer made by the husband to the wife in the letter dated 14 November 2016 involved a settlement on the basis of a payment by the wife to the husband of a sum calculated after a sale of the Suburb B property and payment out of all necessary deductions including a sum of $360,000.00 divided equally between two of the wife’s siblings. To assess whether or not the amount that would have been received by the husband under this offer would have been greater or less than the amount ordered by the court in the final orders to be paid by the wife to the husband – $541,707.00 – certain assumptions would need be made including as to the sale price achieved on a sale of the Suburb B property. As the parties went to hearing with an agreed value for the Suburb B property, it would seem a safe assumption that a sale price at about that agreed value and with the deduction of a sum of $360,000.00, being a deduction not allowed by the court in calculation of the net matrimonial asset pool in the Judgment, would have provided a payment to the husband considerably less than the payment ordered in the final orders.
However, as submitted by the wife, the 14 November 2016 offer was based upon a sale of the Suburb B property, which was a result opposite to that sought by the wife in her Application at the Hearing in which she sought to retain that property and a result not reflected in the final orders in which the wife did retain the Suburb B property subject to her payment to the husband of the sum ordered. Was the 14 November 2016 offer reasonably rejected by the wife? I find that it was on the basis that the offer, if accepted, involved a sale of the Suburb B property whereas the wife’s position was that she sought to retain that property, a position she achieved in the final orders (keeping in mind that reasonableness is assessed as at the date of rejection of the offer and not in the light of subsequent events).
I also find that it was reasonable for the wife to reject the offer on the basis that at the time it was made the wife did not have adequate knowledge to enable her to give proper consideration to the offer by reason of the husband’s failure to give full and frank disclosure in a timely manner.
The second offer made by the husband in his solicitor’s letter of 5 September 2017 involved the payment by the wife to the husband of a sum of $500,000.00 and retention by the wife of the Suburb B property subject to its sale by way of enforcement if the wife failed to make the payment as ordered. The payment proposed in the offer was for $41,707.00 less than the payment ordered in the final orders. The treatment of the jerseys in the offer was less advantageous to the wife than the treatment in the final orders in that the offer proposed that upon a sale of the jerseys the wife receive half of the net proceeds of sale while the final orders allocated to her 62% of the net proceeds of sale, a difference, given the jerseys agreed value at $72,000.00, of $8640.00 (12 percent of $72,000.00 – I have no evidence on which to make a calculation or any assessment of any deductions from the sale proceeds).
Accordingly, the husband’s second offer, if accepted by the wife, provided a result whereby the wife would have been $33,067.00 better off than her result under the final orders.
The learned trial judge found that the total net matrimonial assets were valued at $1,558,204.00 in the table at paragraph 153 of the Judgment. $33,067.00 is 2% of the total net matrimonial assets. In the exercise of the Court’s discretion in relation to costs I find that the advantage to the wife if she had accepted the husband second offer over her position in the final orders is not of sufficient magnitude to warrant the making of a costs order against her and in favour of the husband.
The Full Court has said many times that a property settlement under the Act is not a mathematical exercise, but is an exercise of judicial discretion guided by the terms of the relevant sections of the Act. Given the discretionary nature of property settlement decisions I find that a variance of 2% between offer and final result is not sufficient to ground a costs order.
Further, as with the husband’s first offer, I also find that it was reasonable for the wife to reject the husband second offer on the basis that at the time that it was made the wife did not have adequate knowledge to enable her to give proper consideration to that offer by reason of the husband’s failure to give full and frank disclosure in a timely manner.
(g) Such other matters as the court considers relevant
I find that there are no other matters that I consider relevant in relation to the husband’s Application that the wife pay all or some of his costs of the proceedings.
Conclusion
On the basis of my consideration of the relevant matters in subsection 117(2A), I find that there are no circumstances that justify the court making an order that the wife pay all or any of the husband’s costs or disbursements and that the normal position as to costs in subsection 117(1) that each party to the proceedings shall bear his or her own costs will apply.
Accordingly, I will make orders that the Amended Application in a Case filed by the husband on 5 March 2019 be dismissed and that in relation to the substantive proceedings resolved by the orders made by Judge Harper (as his Honour then was) on 18 December 2018 – as subsequently corrected and varied – each party shall bear his and her own costs.
I certify that the preceding sixty (60) paragraphs are a true copy of the reasons for judgment of Judge Morley
Date: 8 April 2020
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