HF v SJ[2011] QDC 96

DISTRICT COURT OF QUEENSLAND

1. [1]
   The applicant seeks Property Adjustment Orders pursuant to Part 19 of the Property Law Act 1974 (Qld).  She and the respondent lived together on a “genuine domestic basis” from 1986 to August 2004, so a de facto relationship which endured for 18 years.  The applicant was born on 14 August 1937 so is now 73 years of age and the respondent was born on 29 September 1945 so he is currently 65 years of age.  Both are retired and will not work again.  There were no children from their relationship.

2. [2]
   The applicant filed her application on 10 July 2006 and the matter proceeded expeditiously until October 2006. In 2008 the respondent filed a Notice that he was acting for himself.

3. [3]
   On 2 November 2010 the applicant applied to this Court for an Order to dispense with the respondent’s signature on a request for trial date a form which he had on the evidence not returned to the applicant’s solicitors as they had requested. The application was heard by his Honour Judge McGill SC on 23 November 2010, and as well as granting the Order sought his Honour granted the applicant leave to proceed notwithstanding the expiration of more than two years since the last substantive step in the proceeding. The respondent did not appear, and his Honour reserved the costs of that application to me. I will deal with this issue at the conclusions of my reasons in relation to the Pt 19 application.

4. [4]
   The proper approach to such applications is well established and is set out and discussed in a number of decisions of the Court of Appeal: GAJ v RAJ [2011] QCA 65 per White JA at paras [8]-[10] of her Honour’s judgment; FO v HAF [2006] QCA 555 per Keane JA (as the Chief Justice of the Federal Court then was) at paras [46]-[52].  In that judgment, his Honour referred to the utility and value of applying to applications of this kind the four step approach undertaken by the Full Court of the Family Court in Hickey v Hickey [2003] FLC 93-143 at 78, 386.

5. [5]
   At the hearing the applicant was represented by counsel and the respondent represented himself via telephone link from his home in Victoria.  This came about because he had sent a medical certificate which certified that for health reasons he was not fit to travel to Queensland.  The applicant was anxious to keep the trial and due to the uncertainty of if and when the respondent would be fit enough to come to Queensland, I determined to conduct the hearing in this manner.  The respondent has never suggested any disadvantage to him as a result.

6. [6]
   As the record will show both he and the applicant gave evidence and were cross-examined although it proved difficult to focus the respondent on the distinction between asking questions and making statements and allegations unrelated to the evidence. In any event, his case was properly presented in his affidavit and statement filed pursuant to the practice direction on 27 September 2006 when he was represented by solicitors.

7. [7]
   The applicant was an impressive witness, and even allowing for the disadvantage of being self-represented the respondent impressed me as a poor historian, not prepared to make concessions, and his reliability was tainted by bitterness directed variously at the applicant, her solicitor and his former solicitor, all of whom where the subject of various insults during the hearing despite my attempts to focus him on the real issues in dispute. It follows that where his evidence conflicts with hers I prefer her evidence.

8. [8]
   The pool of assets now available for distribution comprises cash only being the sum of $168,242.11 (as at 23 January 2011) invested by the applicant’s solicitors at the direction of the parties being the proceeds of the sale of a jointly owned property in July 2009.

9. [9]
   At the commencement of the de facto relationship I accept the applicant’s evidence that she had a total of $175,580 comprising the proceeds from the sale of her house, cash from her late husband’s superannuation, and a motor vehicle. She was also then receiving a fortnightly annuity in the sum of $180.02 which had increased to $342.48 by the time of separation. The respondent then had a property situated in Bendigo. 

10. [10]
    In his affidavit he values it at $55,000. I reject this evidence. This was in fact the price for which the property was sold on 17 July 1988 (i.e. some years in to the relationship). I accept the applicant’s evidence that the property was in very poor condition when their relationship commenced, and that she engaged tradespeople to complete the kitchen, construct a veranda, install new curtains and carpet, and a septic system. I accept her evidence (supported by documentation) that she paid $8,412.37 for these improvements from her own monies and that her estimate of the value of the property at the start of the relationship of $30,000 is realistic.

11. [11]
    The respondent also owned two vacant blocks at the commencement of the relationship which he values at $12,750 and $13,000 respectively. He says that the blocks were sold in late 1986 and mid-1987 and the proceeds from these sales and the proceeds of the monies received from the sale of the applicant’s property contributed to the purchase of a farm property in joint names at Kin Kin. The applicant disputes this. She says the blocks were sold and the proceeds went to the respondent’s mother who had asserted some legal claim to the land. The respondent asserted in his oral evidence at trial that only $10,000 of the proceeds went to his mother. Even this partial concession is contrary to para 24 of his original affidavit filed 27 September 2006 at a time when he was legally represented. He says this can be proved by reference to bank records in Gympie which have never been produced. I accept the applicant’s evidence that he made no contribution from the sale of the two blocks of land to the financial resources of their de facto relationship.

12. [12]
    At the time of the commencement of the relationship he also had shares in the Bendigo Bank which he valued at $50,000. He says that these shares were still valued at $50,000 at the end of their 18 year relationship. He also accepts that the shares were retained by him and none were ever sold by way of contribution to their joint assets during the currency of the relationship. He said in oral evidence that he used dividends to purchase more shares. He also said these dividends (which he described as being small) in part were used for joint expenses. He was not cross-examined on this issue; particularly the number of shares and the alleged value at the time of separation, but I comfortably reject his assertions that he applied any of the dividends to joint expenses.

13. [13]
    I accept the applicant’s evidence that during the course of the relationship she received $35,000 from her mother’s estate, $10,000 which was used to purchase a car for herself which she still has, and $20,000 was expended towards joint expenses.

14. [14]
    In her affidavit prepared for the trial she sets out the financial history of the parties during their relationship including initial financial contributions from paragraphs 12-46 which I accept. It follows that her financial contribution initially and during the course of the relationship was vastly superior to that of the respondent. In that affidavit she makes concessions about his contributions (e.g. from the times when he worked and from his pension and to improvements to the Kin Kin property) which is in stark contrast to his refusal to make any concessions particularly in his oral evidence to the court.

15. [15]
    I also accept her evidence that she effectively undertook all the household shopping and cooking etc during the course of the relationship. She conceded his contributions in maintaining the Kin Kin farm but I reject his evidence in para 44 of his initial affidavit that her non-financial contributions were extremely limited.

16. [16]
    Unfortunately for the parties the two properties purchased during this long relationship did not appreciate much beyond the value of their joint assets at the commencement of the relationship. In fact in real terms the value of their initial contributions diminished.

17. [17]
    In undertaking the four step approach mandated by the authorities I hold that a just and equitable result is the one contended for by the applicant; namely that the respondent be paid $15,000 from the cash held in the investment account and that the applicant received the balance. Before making final Orders I will hear the parties on the issue of costs of the primary application and the formal Orders to be made.

Cost of the application filed 2 November 2010

18. [18]
    The two affidavit’s filed by the applicant’s solicitor in support of this application were not contested by the respondent. I infer that his Honour Judge McGill SC (reasonably) did not accept the applicant’s contention that a substantive step had been taken within two years of the filing of the application, therefore a leave to proceed was necessary which his Honour granted. As the affidavit filed by the applicant’s solicitor on 2 November 2010 reveals there were many attempts to have the matter mediated both prior and subsequent to the respondent electing to represent himself. There were also delays as the parties agreed to suspend negotiations until the sale of the jointly owned property which occurred in 2009.

19. [19]
    The application and the supporting affidavit filed on 2 November 2010 were served by registered mail both to the respondent’s address for service as noted in the Notice filed by him on 15 August 2008, and to his last known address instructed by the applicant. He did not appear or respond when the matter was heard and made no attempt to contest any of the facts set out in the affidavit, and I am satisfied that he was deliberately avoiding having the matter progress. It is clear that negotiations had broken down, and it is clear from his wilful avoidance of any response to the application that he is not interested in resolving the matter except on his terms. It follows that the applicant is entitled to her costs of that application.

20. [20]
    I publish my reasons today and direct that a copy be forwarded to each party.

21. [21]
    I will give leave to the parties to make submissions in writing as to the appropriate Orders to be made in accordance with these findings and also submissions in relation to costs of the substantive application. I direct that the applicant file her submissions within 7 days and serve a copy on the respondent and that he then have 14 days thereafter to respond if he wishes. I will decide the matter on the basis of those submissions but if either party requires an oral hearing they should notify the Registrar in writing within the above times and I will list the matter and permit both parties to appear by telephone if they wish.

Costs

22. [22]
    On 6.5.11 I published reasons in support of an order that from the proceeds of sale of a former property of the parties the sum of $15000 be paid to the respondent and the balance to the applicant. I gave leave to the parties to make submissions about costs in relation to the primary application which I have received and read.

23. [23]
    The general rule is that a party to a proceeding under Part 19 of the Property Law Act 1974 (Qld) bears the party’s own costs: s 341(1). However s 341(2) does provide a discretion to a court to make a costs order if “satisfied there are circumstances justifying it making an order”.

24. [24]
    S 341(4) sets out the circumstances which the Court must consider in considering whether there are any circumstances justifying it making an order.

25. [25]
    Unfortunately neither party refers to s 341. Rather both written submissions focus on costs powers in the UCPR.

26. [26]
    The circumstances relied upon by the applicant relate to offers made by her solicitors to the respondent on a without prejudice basis save as to costs, on the 26.11.08, 10.09.09, 19.11.09, 29.10.2010, all of which significantly exceeded the order made after trial, and all of which were not accepted by the respondent who was then self- represented.

27. [27]
    This issue clearly is a “circumstance” envisaged by s 341(4)(a) (in a general sense)(e) and (g). (f) is also relevant. As the respondent’s solicitors correctly point out the offers were not strictly in the form required by the rules: s 353(3). Even if this was an application for costs under the UCPR, given that I am satisfied that the applicant was at all times ready, willing and able to carry out what was proposed in the offers, she would have otherwise fully complied with r 360 of the UCPR. In the circumstances I would have excused her failure as an irregularity pursuant to r 371(1).

28. [28]
    Thankfully the respondent has engaged solicitors for the costs argument and I have read their written submissions. Their point about any costs agreement between the applicant and her solicitors is irrelevant to this argument, but may be relevant to the assessment stage if a costs order is made.

29. [29]
    The respondent argues that the offer in November had not crystallized and did not include documentation to prove some disbursements. No evidence is produced that the respondent asked for such proof at the time. As the applicant’s solicitors note, in fact if the respondent had accepted that offer he would have received $66,736.49, that is at the end of November 2008. The second offer on 10.9.09, after the property had been sold, would have resulted in him receiving $64,428.93.

30. [30]
    His failure to accept these offers and force the applicant eventually to trial confirm convincingly my impression of his attitude at trial that “he is not interested in resolving the matter except on his own terms”.

31. [31]
    In my view the discretion to award costs pursuant to s 341(2) of the Property Law Act 1974 (Qld) is enlivened here and the justice of the case requires that the applicant have her costs from the time of the making of the first offer on 26.11.08.

32. [32]
    The applicant seeks costs on an indemnity basis. I have considered the principles summarised by Sheppard J in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 at 256 and those referred to by the Full Family Court in Yunghanns v Yunghanns [2000] FLC 93-029; [2000] 26 Fam LR 331. Even allowing for the fact that the respondent was representing himself, his imprudent refusal to accept no fewer than (4) offers which would have resulted in a much greater return to him and substantial savings to the applicant both in legal costs and in being able to use her share of the proceeds, is sufficient in itself to justify an award of indemnity costs. To a lesser extent, but also relevant, is the conduct of the respondent in relation to the proceedings up to and including his attitude at trial. Seen as a whole, his refusal to accept much higher offers made well before trial and his conduct generally can be regarded as exceptional in such a simple case. I therefore order the respondent to pay the applicant’s costs of and incidental to the proceedings on an indemnity from the 26.11.08 to today’s date. I direct that the respondent’s $15000 be retained in the investment account, and the balance of the investment be paid forthwith to the trust account of the applicant’s solicitors for disbursement to her. I am told that the assessment process should not take long and if there is no dispute or appeal then the respondent’s liability for the costs order I have just made should be known within a reasonable time. 

33. [33]
    I direct that such of the $15000 as may be required to satisfy the costs orders be applied to satisfy those orders and the balance (if any) be paid to the respondent.

34. [34]
    I will allow the parties liberty to apply by the giving of (7) days notice in writing to the official addresses for service as noted in the Court file.