Wolfe and Wolfe - [2008] FMCAfam 393

FEDERAL MAGISTRATES COURT OF AUSTRALIA

WOLFE & WOLFE

[2008] FMCAfam 393

FAMILY LAW – Costs application – application in proceedings wholly unsuccessful – costs application granted.

Family Law Act 1975, s.117(2A)
Federal Magistrates Court Rules Part 21

W & W [2007] FMCAfam 538

Applicant:

MR WOLFE

Respondent:

MS WOLFE

File Number:

SYM7059 of 2004

Judgment of:

Altobelli FM

Hearing date:

31 March 2008

Date of Last Submission:

31 March 2008

Delivered at:

Sydney

Delivered on:

22 April 2008

REPRESENTATION

Solicitor advocate for the Applicant:

Ms Down

Solicitors for the Applicant:

Katie Smith Solicitor

Solicitor advocate for the Respondent:

Mr Torok

Solicitors for the Respondent:

Andrew A Torok

ORDERS

The Wife pay the Husband’s costs in the amount of $6,965.00 within 42 days of the date of these orders.

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

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYM7059 of 2004

MR WOLFE

Applicant

And

MS WOLFE

Respondent

REASONS FOR JUDGMENT

On 31 July 2007 I delivered written reasons and made orders, in the matter of W & W [2007]FMCAfam 538. The effect of those orders was to provide to the husband 40 percent of the net sale proceeds of the former matrimonial home at [S]. Both the husband and the wife were to otherwise receive the benefit of whatever else they have in their possession or control.
My frustration at the way in which the case was conducted is evident from paragraphs 13, 14 and 53 of my reasons. The evidence advanced on behalf of both the husband and the wife was unsatisfactory for various reasons that I refer to in those reasons.
By way of an application filed 28 August 2007 the husband seeks an order that the wife pay his costs of and incidental to the proceedings before the Court. His application is supported by an application of his solicitor, Katie Smith, also filed 28 August 2007. In that affidavit she sets out some brief background of the proceedings and then at paragraphs 13 and 14 set out the relevant offers of settlement that I should consider in the context of a costs application.
At paragraph 13 of the affidavit the solicitor deposes to the husband filing a notice of offer of settlement on 26 April 2007 which provided for the husband to receive 45 percent of the net proceeds of sale, less an amount of $21,600 being what the husband calculated as an adjustment in relation to superannuation entitlement. I am informed that the former matrimonial home has in fact been sold recently and that the net sale proceeds after paying the various debts secured against the property amount to $193, 565 (wife’s submissions regarding costs dated 9 November 2007). Based on the offer of settlement made 26 April 2007, the husband would have received $87,104.25 less $12,600, i.e. a net payment of $65,504.25.
At paragraph 14 of the solicitor’s affidavit she deposes to an offer to settle that was confirmed in writing following the adjournment of these proceedings on 12 February 2007 and which provided for the husband to receive 40 percent of the net proceeds of sale. Having regard to the actual sale of the property, this would have resulted in a payment of $77,426.
The fact of the making of these offers of settlement was not disputed on behalf of the wife.
In the wife’s submissions in relation to costs her solicitor confirms that the husband received about $77,426 dollars.
At the time these offers of settlement were made, no one knew the price at which the property would be sold, or the level of indebtedness secured at that time, let alone the net proceeds. Nonetheless, the offers were described with sufficient precision as to make it clear, certainly as at 6 February 2007, that the husband was prepared to accept 40 percent of the net sale proceeds.
The husband in fact received 40 percent of the net sale proceeds and a prima facie situation arises whereby offers of settlement were made during the course of these proceedings and the husband has either achieved a better result than the offers made, or at least matched an offer made.
The wife’s submission in relation to costs refers to the need to clarify the outcome of the case having regard to how superannuation assets were treated as part of the overall settlement. However I have re-read my reasons and I think it is perfectly clear both how and why I have dealt with the husband and wife’s superannuation entitlements, and, accordingly, why the order I made focused on the net sale proceeds of the former matrimonial home. In my opinion, no clarification is needed and I note that nobody asked for the matter to be re-listed pursuant to the slip rule, or that any appeal was filed. Accordingly, to the extent that the wife’s submissions are directed to removing the otherwise adverse impact on the wife of the offers for settlement referred to above, the submissions are unsuccessful. To the extent that the wife may not have understood the offer of settlement made 24 April 2007, I think it is abundantly clear in terms of “the bottom line” so to speak. The implications for the wife could easily have been calculated. In any event, the offer of 6 February 2007 was plain, and obvious. In short, to the extent the wife’s submissions in relation to costs depend upon lack of clarity of the offers, or seek to re-structure how the property pool was calculated and the application of the percentage to it, it is unsuccessful.
The wife filed a financial statement in court that was sworn 28 March 2008. It shows that she currently receives no income, and I was informed from the bar table that she was currently unemployed. Obviously, she receives no Centrelink benefits either. She claims expenses of $200 per week under the heading ‘mortgage payment/rent’, paid to named people, as well as $219 per week by way of loan repayments to St George Bank Ltd. I’m not sure how these two expenses are reconciled particularly when she does not refer to any property owned by her. Her living expenses are otherwise reasonable. She deposes to having $80,877 in the St George Bank Ltd, notwithstanding having a loan described as a ‘Get Set Loan’ with the St George Bank having a balance of $38,060. On her behalf it was submitted that she did not have capacity to meet an order for costs, but this is clearly incorrect having regard to the amount of her savings.
An application for costs is determined by reference to s.117(2A) of the Family Law Act as well as part 21 of the Federal Magistrates Court Rules.
When one has regard to the former, the totality of the material put before me in submissions leads me to conclude that the wife is in the financial position where she could meet an order for costs, and an order for costs is appropriate as she was unsuccessful in the proceedings, particularly in the face of one and possibly two offers of settlement that, in hindsight, she should have accepted. Accordingly, an order for costs is appropriate.
Part 21 of the Rules gives me considerable discretion as to how, precisely, a costs order should be made. In the circumstances of this case, to make an order for costs to be assessed, or as agreed, is, in my opinion, to invite future ligation between the parties.
I think it is appropriate to make an order for lump sum costs pursuant to Schedule 1 to the Rules as follows:- Stage 5: preparation for final hearing, as a two day matter, $3,965
Stage 6 final hearing costs for two days: $3,000. Total amount: $6,965.00.
I therefore order the wife to pay the husbands costs in the sum of within 42 days of the date of this order.

I certify that the preceding seventeen (17) paragraphs are a true copy of the reasons for judgment of Altobelli FM

Deputy Associate: Monique Robb

Date: 22 April 2008