Costs – husband wins appeal of costs order – wife’s settlement offer did not conclude all matters in issue

In Paradin [2020] FamCAFC 245 (7 October 2020) Strickland J, sitting in the appellate jurisdiction of the Family Court of Australia, set aside an order that the husband pay the wife’s costs of $62,000.

The wife sought an interim release for $40,000, a child support departure order and spousal maintenance of $600 per week; and sent a settlement offer to the husband titled “property matters” where she proposed a transfer and refinance of properties and a payment to her of $40,000.

At trial, the wife’s applications for child support and spousal maintenance were dismissed, but she was to receive a cash adjustment of $146,672, which primarily formed the basis of the subsequent costs order against the husband.

On appeal, the husband argued that the wife’s offer could not have been reasonably accepted by him at the time, particularly where the offer was silent as to the child support and spousal maintenance issues.

Strickland J said (from [33]):

“There is ample authority to the effect that an offer must be expressed ‘with precision’ and ‘in terms which are objectively capable of being clearly understood’ (Harris and Harris [1987] FamCA 7) (…)

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[40] The proceedings had only commenced on 26 October 2017, and the wife, both at that time, and when she filed her Amended Initiating Application at the same time as the offer … was unable to identify for the court the order for property settlement she was seeking. (…)

[57] … I am reminded … of what the Full Court said in Pennisi [ed: full citation: Pennisi & Pennisi [1997] FamCA 39], namely, it is critical to consider the context in which an offer is made … And, as was said by the Full Court in Cross & Beaumont [2008] FamCAFC 68 … at [51] that context can be that ‘[i]f the recipient of the offer is demonstrably unable to comply with his or her obligations under the proposed settlement, it is difficult to see how the offer could be relied upon in support of an application for costs’.”

Robert Glade-Wright is the founder and senior editor of The Family Law Book, a one-volume loose-leaf and online family law service (thefamilylawbook.com.au). He is assisted by Queensland lawyer Craig Nicol, who is a QLS Accredited Specialist (family law).