Wither and Wither & Anor (Costs)

[2024] FCWA 284

JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA

ACT: FAMILY LAW ACT 1975

LOCATION: PERTH

CITATION: WITHER and WITHER & ANOR (COSTS) [2024] FCWA 284

CORAM: TYSON J

HEARD: WRITTEN SUBMISSIONS

DELIVERED : 4 DECEMBER 2024

FILE NO/S: 4906 of 2019

BETWEEN: MS WITHER

Applicant

AND

MR WITHER

First Respondent

AND

MRS WITHER SENIOR

Second Respondent

Catchwords:

COSTS - Where the wife seeks costs against the husband - Where the wife successfully applied to set aside transactions pursuant to s 106B of the Family Law Act, which were opposed by the husband, and subject to a submitting notice by the Second Respondent - Where the husband's conduct as a litigant is a material matter - Where the husband rejected offers of settlement made by the wife - Where the wife claims the rejection of the offers were unreasonable in the circumstances - Where the Court finds the husband's rejection of two offers were unreasonable and imprudent - Where an award of costs in favour of the wife is justified - Where the Court is not satisfied that an order for indemnity costs is warranted - Costs fixed in a sum - Case turns on own facts

Legislation:

Family Law Act 1975 (Cth)
Legal Profession (Family Court of Western Australia) Determination 2020

Category: Reportable

Representation:

Counsel:

Applicant	:	Written Submissions
First Respondent	:	Written Submissions
Second Respondent	:	Did not participate

Solicitors:

Applicant	:	Law Firm A
First Respondent	:	Self-Represented Litigant
Second Respondent	:	Self-Represented Litigant

Case(s) referred to in decision(s):

Addison & Lahey [2008] FamCA 248

Alston & Alston [2021] FedCFamC1A 96

Anison & Anison (2019) FLC 93-908

B and B (No 3) [2015] FCWA 65

Braithwaite & Braithwaite [2007] FamCA 468

Collins and Collins (1985) FLC 91-603

Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania))

v Fish & Anor (2005) 33 Fam LR 123

Greedy and Greedy (1982) FLC 91-250

I and I (No 2) (1995) FLC 92-625

Kohan and Kohan (1993) FLC 92-340

Luadaka v Luadaka (1998) FLC 92-830

Madin & Palis (Costs) (2016) 55 Fam LR 59

Munday v Bowman (1997) FLC 92-784

Northern Territory v Sangare (2019) 265 CLR 164

Prantage & Prantage (2013) FLC 93-544

Prantage & Prantage (Costs) [2014] FamCA 850

Wither and Wither & Anor [2024] FCWA 16

Wither and Wither & Anor [2024] FCWA 177

Wither and Wither & Anor [2024] FCWA 243

Wither and Wither & Anor [2024] FCWA 244

WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT – PARTIES' NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Wither and Wither & Anor has been approved by the Family Court of Western Australia pursuant to s 114Q(2) of the Family Law Act 1975 (Cth).

This copy of the Court's Reason for judgment may be subject to review to remedy minor typographical or grammatical errors (r 312(b) Family Court Rules 2021 (WA)), or to record a variation to the orders pursuant to r 311 Family Court Rules 2021 (WA).

Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

TYSON J:

1 The husband and wife were unable to agree on what orders should be made by way of alteration of property interests, following the breakdown of their marriage. Following a trial in [month redacted] 2024, in August 2024 I delivered Reasons ("Reasons").[1] In the Reasons, I set out the relevant procedural history, background facts, and findings. I adopt and will not repeat what I have set out in the Reasons, unless necessary for this judgment.

[1] Wither and Wither & Anor [2024] FCWA 177 ("Reasons").

2 The husband and wife were given an opportunity to confer as to the form of the orders, to give effect to the Reasons. They were unable to agree, which required further litigation, with ex tempore Reasons delivered [in] September 2024, at which time, the Court pronounced Final Orders.[2] On that same date, the Court heard and dismissed the husband's application for suppression, with further ex tempore Reasons provided.[3]

[2] Wither and Wither & Anor [2024] FCWA 243.

[3] Wither and Wither & Anor [2024] FCWA 244.

3 The wife now seeks an order that the husband pay her costs, either "in their entirety", or alternatively, her costs "from the date of an offer of settlement elected by the Court to 10 October 2024 inclusive" or in such sum determined by the Court.[4] The husband seeks the application be dismissed.[5]

[4] Wife's Minute of Orders - Costs filed 11 October 2024.

[5] Husband's Costs Orders filed 28 October 2024.

4 Pursuant to the Orders dated [in] September 2024, I have determined the costs application in chambers. I have read and carefully considered the wife's amended submissions filed 15 October 2024, the husband's submissions filed 28 October 2024, and the wife's responsive submissions filed 8 November 2024.

Background Facts

5 To put the application in context, I refer only to the following matters.

6 The husband is a [specialised professional] and the wife is a [medical/science professional]. The parties married in 2003, separated in 2019 and have since divorced. They have three children, born in 2007, 2009 and 2012.

7 In July 2019, the wife commenced proceedings, seeking orders by way of alteration of property interests. A trial was listed in March 2022. Upon the wife filing an amended Initiating Application in February 2022, the husband's mother, [Mrs Wither Senior] was joined as a party. As a consequence, the trial was vacated.

8 The proceedings were complicated by the question as to whether the husband owed a debt to his mother, Mrs Wither Senior and the wife's application to set aside a 2014 and 2017 Acknowledgment of Debt and Irrevocable Authority executed by the husband, and two 2019 Demands executed by Mrs Wither Senior, pursuant to section 106B of the Family Law Act 1975 (Cth) ("the Act").

9 At trial, the wife sought final orders which included (apart from setting aside the relevant transactions) her to retain the net proceeds of sale of [Property A] ("[Property A]"), she receive "not less than 70% the net asset pool excluding both parties' superannuation entitlements and…the Husband's interest…in [Company B Group]", and a superannuation split to provide her with 70% of the husband's member balance. She sought a declaration that the husband hold half of the shares in [Company B (1)] ("[Company B] ") on trust for her, and that she retain the [Motor vehicle A] and a boat, and the husband retain her jewellery.

10 The husband sought the net proceeds of sale of Property A be paid to his mother, he retain the boat and Motor vehicle A, and the wife deliver up various items.

11 At the commencement of the trial, the wife sought leave to amend her Application, to seek child support departure orders. After hearing from the parties, I dismissed the application, for the oral reasons provided.

12 The husband sought leave to rely at trial upon an affidavit from his mother, and that she be excused from attending trial for cross-examination. I granted the husband leave to rely on the affidavit of [Dr G] his mother's general practitioner, before entertaining his application. After hearing Dr G's evidence, and submissions from the parties, I declined the husband's application and made orders requiring Mrs Wither Senior to make herself available for cross-examination on terms. The Court was then advised that Mrs Wither Senior would not be attending trial. The husband sought leave to rely upon his mother's affidavit, which I dismissed.

13 The wife sought orders for spousal maintenance. By the conclusion of the trial, her senior counsel conceded the threshold had not been established. I dismissed the wife's application.

14 In the Reasons, I found that:

(a)Each party attempted to give their evidence honestly, but at times their negative view towards the other, infected their evidence, and that each party's focus on their own contributions came at the expense of a proper recognition of the other party's efforts;[6]

[6] Reasons [24] - [25].

(b)Aspects of the husband's evidence were unreliable and implausible,[7] and he was less ready than the wife to make concessions, including where some such concessions should have been readily made;[8]

[7] Reasons [29] - [30].

[8] Reasons [31].

(c)The husband's financial statement was deficient and inaccurate,[9] and his disclosure was lacking,[10] which had contributed to the wife's suspicions about his financial affairs, and resulted in her attempting to conduct a forensic tracing exercise.[11] I was not satisfied the husband had undisclosed assets or income, or that the wife's criticisms of his financial management of the parties' affairs were warranted.[12] I rejected the wife's claims that the husband had behaved in a controlling or coercive manner towards her;[13]

[9] Reasons [35].

[10] Reasons [36].

[11] Reasons [38].

[12] Reasons [41].

[13] Reasons [214].

(d)It was appropriate to exercise discretion to set aside the transactions in accordance with the wife's application.[14] As part of that assessment, I concluded that:

[14] Reasons [152].

•I preferred much of the wife's evidence, over that of the husband, on material matters;

•I was not satisfied that the wife had knowledge of either Acknowledgement until after separation, contrary to the husband's claims;[15]

[15] Reasons [120].

•The Acknowledgements and Demands were each instruments,[16] which formed part of a chain of connected transactions,[17] which constituted the relevant disposition;

[16] Reasons [130].

[17] Reasons [131].

•The husband made the Acknowledgements, and the Demands were made on the husband's direction;[18]

[18] Reasons [132].

•The transactions were entered into with the subjective intention of defeating an anticipated property settlement order;[19]

[19] Reasons [142].

•Alternatively, irrespective of intention, the transactions were likely to defeat an anticipated order in the proceedings, because they reduced the asset pool by $900,000, and in light of the limited property of the husband and the wife;[20]

•I was satisfied it was appropriate to exercise discretion to set aside the transactions.[21]

(e)In the alternative, if I were wrong in the s 106B conclusions, I would not have otherwise considered it just or equitable to treat the alleged loan from Mrs Wither Senior as a liability;[22]

(f)The wife's complaints about the husband's expenditure post separation were not warranted;[23]

(g)The net property and superannuation entitlements of the husband and the wife amounted to $1,831,136;[24]

(h)In light of the property of the parties', it was just and equitable to make an order by way of alteration of their property interests;[25]

(i)An assessment of contributions favoured the husband, and his contributions should be assessed at 65% and the wife's contributions assessed at 35%;[26] and

(j)An assessment pursuant to section 75(2) of the Act favoured the wife and made an adjustment of 25 percent in her favour.[27]

[20] Reasons [147].

[21] Reasons [151] - [152].

[22] Reasons [153] - [155].

[23] Reasons [87].

[24] Reasons [189].

[25] Reasons [190].

[26] Reasons [194].

[27] Reasons [221].

15 I concluded a just and equitable outcome in the circumstances provided for the wife to receive 60% of the parties' net property and superannuation and the husband receive 40%.[28] To achieve the division, it was agreed each party was to retain certain assets and liabilities, as set out at [230] and [231] of the Reasons. I found it was just and equitable to make orders by way of a superannuation splitting order in favour of the wife, which required a base amount to be allocated to her of $102,957.

The Law

[28] Reasons [224].

16 In proceedings to which the Act applies, the starting point is that each party shall bear his or her own costs, s 117(1). If, however, the Court is of the opinion that there are justifying circumstances, the Court may make such order as to costs as the Court considers just, s 117(2).

17 Subsection 117(2A) provides that in considering what order (if any) should be made under s 117(2), the Court must 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 the proceedings and the terms of any such offer; and

(g)such other matters as the court considers relevant.

18 It is well-established that no one factor in s 117(2A) has priority, nor must more than one factor be satisfied. Any one factor can be sufficient.[29]

[29] Prantage & Prantage (Costs) [2014] FamCA 850 at [12].

19 The first question is whether the wife has established any circumstances which justify departing from the position that each party should pay their own costs, and the making of a costs order in her favour. The second question is if there are circumstances justifying a costs order, the husband should pay the wife's costs as a fixed sum, or an indemnity costs, other than costs as agreed or assessed on a party/party basis.

20 I have carefully considered all of the factors in s 117(2A).

Discussion

21 Neither party has been in receipt of Legal Aid. I will therefore turn to consider the relevant matters below.

Section 117 (2A)(a) - financial circumstances of each of the parties

22 In the Reasons, at [189] I set out my findings in terms of the parties' assets, liabilities and superannuation entitlements. To give effect to the outcome which I determined was just and equitable, I set out what each party was to receive or retain. At [230] of the Reasons, I recorded that the husband was to receive or retain the following:

ASSETS	Value
[Redacted] Office Furniture (including artwork)	$570
Household Contents, trailer, outdoor equipment	$15,870
[Bank A account (2)] [account number redacted]	$5,292
Unpaid debtors	$141,390
Motor vehicle A	$47,000
Boat	$36,000
[Family Trust B]
Company B shares (Family Trust B)	$75
[Family Trust D]
Property B	$2,375,000
Less [Bank A Loan account] [account numbers redacted]	-$1,130,120
Less [Bank A Business account] [account numbers redacted]	-$6,613
SUBTOTAL ASSETS	$1,484,464
LIABILITIES
Credit card liabilities	$12,294
Tax liability	$113,441
TOTAL LIABILITIES	$125,735
HUSBAND'S NET ASSETS	$1,358,729

SUPERANNUATION
[Superannuation Fund A]	$217,448
Less superannuation splitting order	-$102,957
TOTAL SUPERANNUATION	$114,491
TOTAL NET ASSETS AND SUPERANNUATION	$1,473,220

23 At [231] of the Reasons, I recorded that the wife was to receive or retain the following:

ASSETS	Value
[Bank A account (3)] [account number redacted] (joint)	$109,926
[Bank A account (4)] [account number redacted] (joint)	$96
[Bank E trading account (1) [account number redacted] and (2) [account number redacted] (joint)	$31
[Bank C (1), (2) and (3) accounts]	$1,035
[Bank D account]	$2
Jewellery	$22,200
Solicitors' Trust Account	$47,203
Furniture, artwork and chattels	$8,500
Business B
[Bank C account (4)] [account number redacted]	$8,527
[Bank F account] [account number redacted]	$1,176
[Credit Card D] [account number redacted]	$4,469
TOTAL ASSETS	$203,165
LIABILITIES
Tax liability (Business B)	$12,412
Tax liability (wife)	$4,573
TOTAL LIABILITIES	$16,985
WIFE'S NET ASSETS	$186,180
SUPERANNUATION
[Superannuation Fund B]	$68,779
Plus superannuation splitting order	$102,957
TOTAL SUPERANNUATION	$171,736
TOTAL NET ASSETS AND SUPERANNUATION	$357,916

24 Pursuant to the Final Orders, the husband was required pay to the wife $740,765 within 21 days.

25 At the time of trial, each party was self-employed and worked on a full-time basis. The husband anticipated he would generate gross [revenue] of around $1,000,000. In the 2023 financial year, his taxable income was over $600,000, while the wife's was around $130,000. The husband was paying child support of around $1,000 each week to the wife, which was anticipated to reduce, when the Agency received updated information about the children's living arrangements. The husband was meeting private school fees for each child, but deposed that his capacity to continue to do so, may be dependent upon the outcome of the proceedings. Prior to the husband's [redacted] diagnosis, he had indicated an intention to continue paying the school fees.

26 Based upon the property the husband has received or retained, coupled with his income and income earning capacity, I am satisfied that he has the capacity to meet a costs order.

Section 117(2A)(c) - the conduct of the parties

27 The relevant consideration is the conduct of the parties as litigants, as opposed to their personal conduct more broadly.[30]

[30] Prantage & Prantage (2013) FLC 93-544.

28 The wife argued that the conduct of the husband during the proceedings caused her to incur significant and unnecessary costs. By way of example, the wife refers to:

(a)the husband's opposition to her s 106B claim and his insistence that he owed his mother $900,000, which she contends "significantly increased the duration and costs of the proceedings";

(b)the husband transferring Company B shares, after he was on notice of the wife's claim, which resulted in an interim order being made setting aside that transaction;[31]

(c)complaints about the husband's disclosure, which caused the wife to incur additional cost such as issuing subpoena to obtain documents which the husband failed to disclose, such as in relation to an insurance claim;

(d)the husband's refusal to accept the evidence of the Single Expert Witness, until the conclusion of the trial, after having insisted she attend for cross-examination; and

(e)the husband's late application for his mother to be excused from attending trial, which resulted in additional time taken at trial including: (1) cross-examination of Dr G; (2) entertaining the husband's application which was dismissed; and (3) after the application was dismissed, the husband failed to produce his mother for cross-examination.

[31] Wither and Wither & Anor [2024] FCWA 16.

29 The wife in submissions contends that the husband was "constantly obstructive about every issue" and his conduct "significantly increased the duration and complexity of Trial which increased the Wife's legal costs and wasted Court resources". In my view, that submission overstates the criticisms which can fairly be made of the husband. However, I accept that the husband's conduct as a litigant warrant complaint and has unnecessarily contributed to the wife's costs. Specifically, I am satisfied that:

(a)the husband's disclosure was deficient, lacking and not timely, which was the subject of specific findings throughout the Reasons.[32] The husband's failure to discharge his disclosure obligations in a timely manner, caused the wife to incur additional costs, through the issue of subpoena to obtain documents, which he failed to disclose, putting questions to the husband to seek explanations and documents about issues pertaining to his financial affairs. The husband's submission that the Court made findings he had complied with his disclosure obligations, does not accurately reflect the Reasons;[33]

(b)the husband's failure to put questions to the Single Expert Witness, to clarify her report. Instead, the husband required the Single Expert Witness for the purposes of cross-examination. Had the husband utilised the mechanisms available under the Rules, cross-examination of the Expert could have been avoided, and the value of Property B settled, in advance of the trial. I accept the requirement for the Single Expert to attend trial, increased the duration of the trial, albeit not for a significant period; and

(c)the husband's late application to have his mother excused from attending trial, extended the duration of the trial, and was unsuccessful.

[32] For example, Reasons [35] - [41], [59].

[33] Husband's Submissions in Opposition to Costs, at [6].

30 However, aspects of the wife's conduct as a litigant also warrant criticism and have contributed to costs. The wife's late amendment and joinder of Mrs Wither Senior, resulted in an earlier trial being vacated.[34] The energy and effort which the wife directed towards attempting to conduct a forensic tracing exercise, and the volume of affidavit material directed towards criticisms of the husband's financial management, were not found to have merit, and occupied much attention during cross‑examination.[35] I rejected the wife's complaints at trial that the husband's expenditure post separation was unreasonable.[36] The wife's late application at the commencement of the trial, to introduce child support, was dismissed. The wife's claim for spousal maintenance was dismissed. The interim hearing listed on [a date in] December 2023 was vacated, upon the wife's application, with an order that her senior counsel was to pay the costs of the proposed intervenor.

Whether either party has been wholly unsuccessful in the proceedings

[34] Court Order 11 March 2022.

[35] Reasons at [38], [41].

[36] Reasons, [86] - [87].

31 It is well-established that a party being largely successful, is not the same as being wholly successful.[37]

[37] Anison & Anison (2019) FLC 93-908.

32 As observed in the Reasons, the wife was largely successful in terms of the relief sought. She was successful in her application to set aside transactions pursuant to s 106B of the Act. She was successful on an interim basis, in her applications to: (1) set aside the husband's disposition of shares in Company B;[38] (2) dismiss the husband's application for his mother to be excused from attending trial;[39] and (3) to have the husband answer further specific questions.[40] The wife was not successful in terms of her application for spousal maintenance. The wife did not achieve 70 % of the parties' property and superannuation entitlements. She did not receive any shares in Company B, nor did she retain the boat, or Motor vehicle A. She was unsuccessful in her application for the husband to retain her jewellery.

[38] Court Order [in] January 2024.

[39] Court Order [in] May 2024.

[40] Court Order [in] April 2024.

33 The husband was unsuccessful in his application: (1) to oppose setting aside the transaction with respect to shares; (2) to oppose setting aside the transactions relating to his mother; (3) leave to rely upon the affidavit of his mother at trial; (4) for his mother to be excused from being available for cross-examination; and (5) a suppression order.

34 The husband was largely unsuccessful in terms of the final relief he sought. The Court did not order any payment to his mother, and as identified, set aside the relevant transactions.

35 Neither party was wholly unsuccessful in the proceedings.

The terms of any offer

36 The husband referred to two settlement offers he made, in March 2022 and April 2024. The first offer saw the husband offer to pay to the wife $250,000, and the second proposed to pay her $400,000. Both offers proposed the net proceeds of sale of Property A be paid to Mrs Wither Senior.

37 In the husband's March 2022 offer, he told the wife that she was:

very very unlikely to get a better outcome than the previous settlement offers I have previous made. If that's (sic) correct, then you will have to contribute to my legal fees to date which will see you even further behind… I presently cannot see how in any scenario you will get a better outcome than what I am offering. The $900,000 from my Mum has to be factored into any outcome at trial. That is, even if it is a gift it still gets assessed as a massive contribution on my side of the ledger, plus all the money I have made over the years. If you do not see a way to accepting this offer, then I am very happy to wait it out to get to a trial again whenever that comes around.

38 The husband's prediction as to the just and equitable outcome was inaccurate. It is clear from his correspondence, that the husband was acutely aware of the prospect of a costs order being made, if either party did not achieve a more favourable outcome at trial, than in accordance with their offers.

39 Neither of the husband's offers provided the wife with a more favourable outcome than that which she achieved at trial. Accordingly, they have no bearing on the question of costs.

40 The wife relied upon the following offers:

(a)in September 2019, the wife proposed: (1) the husband pay to her $373,887; (2) she retain the proceeds of sale of Property A, and the boat; and (3) the husband enter into a Binding Child Support Agreement, to pay the children's school fees and private health insurance;

(b)in October 2020, there were further negotiations between the parties. I do not take these into account, in circumstances where those negotiations were not in writing;

(c)in September 2021, the wife proposed the husband: (1) pay her $330,000; (2) 50% of the proceeds of sale of Property B; (3) and a Binding Child Support Agreement in the same terms as earlier offers. Later that month, she made a subsequent offer, for Property B to be sold, and the proceeds divided equally;

(d)in March 2022, the wife sought the husband pay her $400,000, she receive the proceeds of sale of Property A, a superannuation split of $137,870 in her favour and the husband pay maintenance of $500 a week for a year, together with a Binding Child Support Agreement;

(e)on 6 May 2022, the wife sought to retain the proceeds of Property A and a payment of $300,000, as well as a Binding Child Support Agreement;

(f)on 13 May 2022, the wife proposed the husband pay her $300,000 and she receive the proceeds of Property A;[41] and

(g)in April 2024, the wife sought the husband pay to her $700,000 and a $100,000 superannuation split which is attachment 2 to her submissions.[42]

[41] Attachment 1 to the Wife's Costs Submissions filed 15 October 2024.

[42] Attachment 2 to the Wife's Costs Submissions filed 15 October 2024.

41 The offers made by the wife in September 2019, September 2021, March 2022 and 6 May 2022 each included provisions for a Binding Child Support Agreement. The offers were each expressed as a package deal, and were not open for acceptance, in part. It therefore cannot be said that the wife achieved a more favourable outcome at trial, than what was contained in each of those offers, when child support was not before the Court. I do not attach weight to those offers, despite observing that each offer provided the husband with a more favourable outcome in terms of a property settlement, than what he achieved at trial.

42 The wife's second offer made in May 2022 and April 2024, did not include child support, and were limited to orders by way of alteration of property interests. Had the husband accepted either offer, he would have achieved a better outcome, than what the Final Orders provided, which included: (1) a cash payment to the wife; (2) the wife retaining the net proceeds of sale of Property A, of $110,506 (providing her with cash of $851,302); and (3) a superannuation splitting order of $102,957, in addition to the balance of property set out at [23] of these Reasons.

43 Had the husband accepted the May 2022 offer, he would have paid $300,000 to the wife by 1 July 2023, with no superannuation splitting order, while retaining Property B, the car, boat and balance of his assets. That offer provided the husband with a far more favourable outcome than that achieved at trial, some two years later.

44 If the husband accepted the April 2024 offer, he would have paid $700,000 to the wife, within 60 days, with a $100,000 superannuation split, while retaining Property B, the car, boat and balance of his assets. Again, that provided the husband with a more favourable outcome, than what he achieved in the Final Orders, and would have avoided the trial.

45 The husband concedes the wife achieved a better outcome than "the asset allocation advocated by the husband".[43] The husband asserts that it was not unreasonable of him to reject the wife's offers, because of the dispute as to the available property, including the value of Property B and the alleged $900,000 debt to Mrs Wither Senior. In summary, he contends that the balance sheet was unresolved to such an extent, that his rejection of the offers should not attract a cost consequence.

[43] Husband's Submissions in Opposition to Costs, at [32].

46 I do not accept that submission. The husband, and Mrs Wither Senior, were entirely unsuccessful in their opposition to the wife's application to set aside the transactions, pursuant to s 106B of the Act. The wife was put to the cost of establishing relevant factual matters, and findings were made. The husband's submissions about whether a different finding would have been made, had Mrs Wither Senior attended trial, is simply speculative.

47 In the Reasons, I was satisfied that: (1) the Acknowledgements and Demands were part of a chain of transactions which were entered into with the subjective intention of defeating an anticipated property settlement order; (2) in the alternative, irrespective of intention, the transactions had the effect of defeating an anticipated property settlement order; (3) in the exercise of discretion, it was appropriate to set aside the transactions; and (4) in the alternative, I was not satisfied it was just or equitable to treat the alleged loans as a liability in the balance sheet. These matters inform the exercise of discretion.

48 I do not consider the husband's rejection of either offer was reasonable, because he lacked the funds to pay the alleged debt to his mother, in light of the findings at trial.

49 The husband refers to Property B, which was subject to a valuation by the Single Expert Witness at $2,375,000, on 11 March 2024, with an affidavit filed 11 April 2024. The value of Property B was clearly established and known to the husband, at the time of the April 2024 offer. The husband's refusal to accept the value, in circumstances where he failed to utilise the relevant Family Court Rules 2021 (WA) ("the Rules") to clarify the Expert's report, and his refusal to accept the Expert's valuation, until after he had cross-examined the Expert, do not in my view, render the husband's rejection of the wife's offer reasonable in the circumstances.

50 The husband's reliance on an alternate value for Property B, at $1,800,000 which he unilaterally obtained, [was] not in compliance with the Rules, [and] does not assist his case.

51 The husband contends at the time of the May 2022 offer Property B had an agreed value of $1,750,000, and the offer required him to pay to the wife $408,000 in cash and "In the known circumstances at that time the husband did not act unreasonably in rejecting that offer because he did not have cash to pay to the wife in the amount sought".[44] In light of the husband's property, income and income earning capacity, there were numerous options open to the husband, in which to raise funds to pay the wife. The May 2022 offer provided for $200,000 to be paid by 31 December 2022 and $100,000 by 1 July 2023. The husband had time to make the required arrangements.

[44] Husband's Submissions in Opposition to Costs, at [46].

52 In assessing the reasonableness of the husband's failure to accept the May 2022 offer, I observe that: (1) the husband had the greater grasp on the parties' financial circumstances; (2) at the time of the offer, the proceedings had been on foot since 2019, Mrs Wither Senior had been joined to the proceedings and the wife had sought orders to set aside the relevant transactions; and (3) in April 2022, Mrs Wither Senior had filed a submitting notice. In the circumstances, I consider the husband was well able to assess the strength of his position, in respect to the litigation at the time of the offer.[45] Further, the offer was clear in [its] terms. Even adopting the husband's calculations as to the parties' net property at that time, and excluding the $900,000 loan to Mrs Wither Senior, the offer provided for the wife to receive around 30%, and the husband to receive around 70%. The outcome achieved by the wife at trial was far more favourable, in terms of percentage outcome, 60% and the proposed cash payment. I consider the husband's rejection of the wife's May 2022 offer was unreasonable.

[45] Alston & Alston [2021] FedCFamC1A 96 at [102].

53 By the time of the April 2024 offer, the husband had the benefit of the Single Expert Witness' report. While there were some ongoing disputes as to the balance sheet, the husband remained in a far greater position than the wife, with respect to the parties' financial circumstances. The husband was unquestionably in a much better position to assess the strength of his case, including receipt of the Court's Reasons published [in] January 2024[46] in support of the interim orders setting aside the husband's transfer of shares. The husband had the benefit of those Reasons, which set out clearly the relevant law concerning s 106B of the Act. His rejection of the April 2024 was imprudent and unreasonable.

[46] Wither and Wither & Anor [2024] FCWA 16.

54 I consider the husband's rejection of the wife's offers made in May 2022 and April 2024 were imprudent. Had he accepted either offer, he would have achieved a more favourable outcome, than that which he achieved at trial. This is a material matter in favour of a costs order.

Any other matter

55 The wife raises a number of issues which she asserts the Court ought to take into account, as relevant. Having read the submissions, I am not persuaded that any of those matters are properly taken into account, and I decline to do so.

56 The wife has incurred costs of $460,300 at the time of her submissions, inclusive of her legal fees and disbursements. The wife has provided the costs agreement with her current solicitors and senior counsel. She has not provided the costs agreement with any former solicitors or counsel.

57 The wife asserts that her legal costs since the May 2022 offer are $240,797, and her legal costs since her April 2024 offer, are E$97,470.[47] The wife has not provided an itemised schedule of her claimed costs, calculated in accordance with the costs agreement, nor on scale.

[47] Wife's Costs Submissions filed 15 October 2024, at [76].

58 The wife relies upon the cost notification letter at trial, and an itemised debtor statement to date. The wife's legal fees from 13 May 2022 until 10 August 2022 were $42,255 with the solicitors' fees being greater than the relevant Legal Profession (Family Court of Western Australia) Determination 2020, while the costs charged by her then senior counsel, was less than scale.[48]

[48] Wife's Costs Submissions filed 15 October 2024, at [59] - [61].

59 The wife observes that: (1) her legal fees with her current solicitors from August 2022 were less than scale, as were the costs charged by her senior counsel;[49] and (2) both her solicitor and senior counsel did not charge for various work conducted on behalf of the wife, and charged discounted rates, for some tasks.[50]

Conclusion

[49] Wife's Costs Submissions filed 15 October 2024, at [63] - [65].

[50] Wife's Costs Submissions filed 15 October 2024, at [68], [69].

60 The discretion to award costs is a "broad" one, and the various enumerated factors are not to be read in any restrictive way.[51] Any one of the factors may be the sole foundation for an order for costs.[52] Nevertheless, the matters enumerated "must all be taken into account and all balanced in order to determine whether the overall circumstances justify the making of an order for costs".[53] It is unnecessary to spell out detailed reasons for costs decisions. An exercise of discretion to order costs will be upheld if it appears to the Appellate Court there are reasons upon which the Trial Judge could rely.[54]

[51] Collins and Collins (1985) FLC 91-603.

[52] Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish & Anor (2005) 33 Fam LR 123.

[53] I and I (No 2) (1995) FLC 92-625 at [82,277].

[54] B and B (No 3) [2015] FCWA 65; Greedy and Greedy (1982) FLC 91-250; Luadaka v Luadaka (1998) FLC 92-830.

61 I am mindful that an order for costs is compensatory, not punitive.[55] The primary rule in this jurisdiction is that each party bears their own costs. Impecuniosity is not, of itself, a bar to a costs order. The husband's financial position may be relevant to the extent that it may inform the structure of any costs order, such as providing for the payment of costs over time, to avoid hardship and improving the prospects of compliance.[56]

[55] Braithwaite & Braithwaite [2007] FamCA 468 at [106] - [107].

[56] Northern Territory v Sangare (2019) 265 CLR 164 at [32].

62 After careful consideration and noting the broad discretion I have, I am satisfied it is appropriate to depart from the usual principle. The husband's conduct as a litigant and his failure to accept the offers made in May 2022 and April 2024, justify an award of costs in favour of the wife.

63 The award of indemnity costs in the Court has been called a significant departure from the normal standard, rare and requires something exceptional.[57]

[57] Munday v Bowman (1997) FLC 92-784; ; Kohan and Kohan (1993) FLC 92-340; Madin & Palis(Costs) (2016) 55 Fam LR 59 (2016) 55 Fam LR 59.

64 Where costs are sought on an indemnity basis, and the costs incurred arise under a cost agreement, the terms of the agreement must be disclosed to the Court.[58] The wife's failure to adduce the costs agreement with her former solicitors and counsel, are fatal to her application for indemnity costs.

[58] [Family Court Rules 2021 (WA) r 331(3)]; Addison & Lahey [2008] FamCA 248.

65 Irrespective of that failure, despite the criticisms of the husband's conduct as a litigant, and his imprudent rejection of the offers, I am not satisfied the case falls within the category to support an order for indemnity costs. I am fortified in that view, in light of the criticisms of the wife's conduct as a litigant, to which I have referred.

66 Rule 335(1)(a) of the Rules permits the Court to make an order that a party is entitled to costs of a specific amount. In the interests of both parties, I intend to exercise my discretion to fix the amount of costs, to avoid putting the parties to the additional expense of taxing the costs and further delay in resolving the matter overall.

67 Having carefully considered the costs claimed by the wife, the issues in the proceedings, the duration of the trial, and the circumstances, I have concluded that the husband should be required to pay an amount, fixed in the sum of $120,000.

68 I propose to make orders which provides the husband three calendar months in which to pay the wife. I consider the quantum and timing of payment to be proper in the circumstances.

PROPOSED ORDERS

1.The husband is to pay the wife's costs, fixed in the sum of $120,000, by no later than three calendar months.

2All outstanding applications for costs be and are hereby dismissed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Family Court of Western Australia.

CD

Associate

4 DECEMBER 2024