DISTRICT COURT OF QUEENSLAND

1. [1]
   In this matter I delivered reasons on 16 September 2011 making an order under part 19 of the Property Law Act 1974 that the respondent pay $21,000 to the applicant by way of adjustment of property interests of the parties. Following the publication of those reasons the solicitors for the applicant applied for an order for costs, relying in particular on the fact that, on 18 May 2011, nine days prior to the hearing, the applicant offered to accept $15,000, a sum which was less than the amount which I ordered to be paid, with each party to bear their own costs.

2. [2]
   Special provision is made in relation to the question of costs in the Property Law Act 1974 part 19, s 341. This section provides a prima facie position that a party proceeding under this part bears the party’s own costs. There is however the power to make an order for costs a court considers appropriate “if the court is satisfied there are circumstances justifying it making an order”: subs (2).

3. [3]
   In considering whether to take that step the court is required to consider the matters listed in subs (4). One of these is whether any party made an offer to settle under the UCPR and the terms of the offer. I consider that this permits the offer to settle to be taken into account, but that the terms of s 341 are inconsistent with rule 360 (and for that matter rule 361) so that the prima facie entitlement to indemnity costs which would arise from the operation of rule 360 does not apply in a proceeding under part 19. Rather the position is that this is something to be considered along with the other circumstances specified in subs (4). This appears to be consistent with the view of Applegarth J in RD v DB (No. 2) [2011] QSC 124.

4. [4]
   The first is the income property and financial resources of each of the parties. To some extent this is dealt with in my earlier reasons on the basis of the evidence put before me at the trial. However the respondent in relation to the question of costs put before me a good deal more information about his current financial position, which broadly speaking shows that it is a good deal worse than I had assumed it to be on the basis of the limited evidence touching on this which was put before me at the trial. At that stage the respondent owned a house which he had purchased in about September 2008, which was subject to a mortgage, with equity of rather less than the amount that he had apparently put into the purchase as the amount realised by the sale of the previous house. It appears however that in September 2011, soon after I made my order, that replacement house was sold as well, the respondent saying that this was at a loss, presumably a capital loss, of $3,500.^[1] 

5. [5]
   The respondent has completed a statement of financial position dated 4 October 2011 and this was put before me, together with a copy of a document prepared by Uniting Care Community dated 20 October 2011 and these are a little difficult to reconcile. The former claimed net income of $2,086.31 per week, though it appears from the answer to the following question that he is actually paid fortnightly, and I suspect that the figure represents the fortnightly payment. The amount shown for his income on the other document is $5,400 per month, and that document also discloses “other income” of $1,000 a month, although it is not clear how this came about; he had at one stage been renting out the property that was sold, but by October 2011 that was presumably all over. In any case, the figures do not match.

6. [6]
   The document also asserts that he has a new partner, who already had two children before she had another child by the respondent, all of whom are wholly or partly dependent on him for financial support. One document says he pays rent of $375 per week, the other $1,500 per month. The statement of financial position does not disclose any interest in his superannuation fund, although the respondent had such an interest according to the statement of financial circumstances relied on at the trial: [17]. I suppose it is possible that he no longer has that interest.

7. [7]
   The same statement discloses a debt of $9,432 to the Australian Taxation Office, whereas the other statement discloses the order made under part 19 as well as a debt of $17,000 to DR Admin, and $1,200 to Flexirent. The former is presumably DR Administration Pty Ltd, who have provided him with a letter dated 12 October 2011 to confirm that he is currently in a Part IX debt agreement with scheduled payments of $90 per week. Unfortunately that letter does not provide any confirmation as to the amount of his debts. The fact that he is subject to this debt agreement however does tend to confirm that his financial position is somewhat worse than I had assumed for the purposes of my earlier order. Although the material before me is not all consistent, it does generally lead to the same conclusion.

8. [8]
   With regard to the other matters in ss (4), neither party had legal aid, and there was nothing in particular by way of conduct in the proceeding which would justify any particular order either way in relation to costs.^[2]  There was no failure to comply with any previous order by either party, neither party could have been said to be wholly unsuccessful in the proceeding,^[3] and there is I think no other relevant fact or circumstance which the justice of the case requires to be taken into account.

9. [9]
   Broadly speaking therefore I am left with a starting point of no order as to costs, the making of a pre-trial offer which the applicant beat, and the fact that the respondent’s financial position is quite modest, and indeed more modest than I had assumed for the purposes of my order. Of course if the respondent failed to put relevant material before the court and as a result I formed a view of his financial position which was unrealistic that is his problem; it is certainly not the applicant’s problem. On the other hand, once a clearer understanding is reached of his financial position it is appropriate for that to be taken into account. That follows from s 341(4)(a). Overall my impression in the light of all the material I have seen is that his financial position is rather worse than that of the applicant. This is somewhat different from the conclusion that I arrived at on the evidence before me for the purposes of the hearing.

10. [10]
    Overall I am therefore not satisfied that the circumstances justify making an order for costs in favour of the applicant, notwithstanding the making of the offer to settle. There will therefore be no order as to costs.