Anand & Chaudhary (No 2)
[2022] FedCFamC1F 878
Federal Circuit and Family Court of Australia
(DIVISION 1)
Anand & Chaudhary (No 2) [2022] FedCFamC1F 878
File number(s): MLC 13409 of 2019 Judgment of: HARTNETT J Date of judgment: 10 November 2022 Catchwords: FAMILY LAW – COSTS – Where the applicant wife’s Application in a Proceeding to join third parties was unsuccessful – Where the wife’s Application in a Proceeding was not wholly unsuccessful – Where the third parties sought their costs of and incidental to the Application in a Proceeding – Where there had been no change in circumstances for re-joinder – Where the wife is in receipt of Centrelink benefits – Where there are circumstances which justify an order for costs – Costs ordered. Legislation: Family Law Act 1975 (Cth) ss 117, 117(1), 117(2A)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 12.28
Cases cited: Collins and Collins (1985) FLC 91-603
Penfold v Penfold (1980) 144 CLR 311
Division: Division 1 First Instance Number of paragraphs: 21 Date of last submission/s: 2 November 2022 Date of hearing: On the papers Place: Melbourne Counsel for the Applicant: Dr Ingleby Solicitor for the Applicant: Aitken Partners Counsel for the Respondents: Ms O’Connell Solicitor for the Respondents: Shapra Lawyers The Second Respondent: Litigant in person Counsel for the Interested Parties: Mr Dickson KC Solicitor for the Interested Parties: Asher Freeman Lawyers ORDERS
MLC 13409 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS ANAND
Applicant
AND: MR CHAUDHARY
First Respondent
MS SARAI
Second Respondent
C PTY LTD
Interested PartyB PTY LTD
Interested Party
order made by:
HARTNETT J
DATE OF ORDER:
10 NOVEMBER 2022
THE COURT ORDERS THAT:
1.The applicant wife pay the costs of C Pty Ltd and B Pty Ltd, in respect of and incidental to the Application in a Proceeding filed by the Applicant on 5 August 2022 including the hearing on 19 August 2022 on a party-party basis to be assessed in default of agreement.
2.Pursuant to r 12.28 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) this matter reasonably required the attendance of counsel including King’s Counsel.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Anand & Chaudhary has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARTNETT J
On 15 September 2022, the Court made interlocutory orders in respect of the applicant’s Amended Application in a Proceeding filed 10 August 2022. Included in the orders made was the following:
…
6.The application for costs of the proposed joinder Fifth and Sixth Respondents not so joined is to be determined by the Court upon the receipt of written submissions from the proposed Fifth and Sixth Respondents within 28 days hereof together with any written submissions from the parties or any of them within a further 14 days thereafter. A right of reply shall be available to the Fifth and Sixth Respondent within 7 days thereafter.
C Pty Ltd and B Pty Ltd the proposed fifth and sixth respondents, sought their costs of and incidental to the dismissal of the applicant’s Application in a Proceeding for joinder of C Pty Ltd and B Pty Ltd on a party-party basis to be assessed in default of agreement. A further order was sought to certify for costs of King’s Counsel at the hearing of that Application in a Proceeding.
The reasons for judgment published on the 15 September 2022 set out the relevant history of the applicant wife’s claim, and noted amongst other things that C Pty Ltd had previously been joined to the proceeding on 23 August 2021, and was subsequently removed as a party to the proceeding on 4 April 2022. As stated in those reasons, there was no basis to join C Pty Ltd or B Pty Ltd to the proceeding as no final relief was sought against either company (they were not necessary parties); the occupation of the wife in the E Street, Suburb G being a property owned by the C Trust, was heard and determined by the Registrar with no review application being filed; there was no change in circumstances; and there was significant prejudice to C Pty Ltd as it was unable to make an income, as intended, if the wife were to continue to reside in the E Street, Suburb G Property.
In October 2022, C Pty Ltd and B Pty Ltd emailed their submissions to chambers, noting that as a non-party to the proceeding they were unable to file via the normal procedure. On 28 October 2022, the applicant filed written submissions. On 2 November 2022, C Pty Ltd and B Pty Ltd emailed submissions in reply to chambers noting their only reply submission was that they had raised an objection to joinder on an earlier occasion before the Registrar.
Legal Principles
While C Pty Ltd and B Pty Ltd are not parties to the proceedings, and indeed are third party cost applicants and not parties to the applicant’s marriage, s 117 of the Family Law Act 1975 (Cth) (“the Act”) applies. Section 117(1) of the Act sets out the general rule that each party shall bear their own costs. However, the Court being satisfied that there are circumstances justifying it doing so, may make such order for costs as it considers just in accordance with the Court’s discretion.[1] In considering what (if any) order for costs it should make the Court shall have regard to the matters in s 117(2A) of the Act as follows:
(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.
[1] Family Law Act 1975 (Cth) s 117(2).
Although the Court must have regard to all of these matters, and their relevance will depend upon the particular circumstances of each case, it is not required to consider these matters in any particular order, and no matter takes precedence over another. It is also not necessary for there to be more than one relevant consideration for the purposes of deciding that an order is justified.
In Collins and Collins (1985) FLC 91-603 at page 79,877, the Full Court of the Family Court (Evatt CJ, Pawley & Barblett JJ) said:
In deciding whether the circumstances justify an order for costs, there is a broad discretion to be exercised, having regard to the factors set out in subs. (2A) so far as relevant. Those factors…. are not to be read in a restrictive way, however, the discretion remaining is a broad one: Penfold v Penfold (1980) FLC 90-800 at pp 75,053-75,054 (High Court); quoted in Mallet v Mallet (1984) FLC 91-507 at pp 79,123-79, 124 (by Wilson J).
In Penfold v Penfold (1980) 144 CLR 311, the High Court (Stephen, Mason, Aickin and Wilson JJ) held that:
12.It is an accurate description of s. 117(1) to say that it expresses a general rule, provided that it is firmly understood that the subsection is not paramount to s.117(2). As subsec (1) is expressed to be subject to subsec (2) the former must yield whenever a judge finds in a particular case that there are circumstances justifying the making of an order for costs.
13.Subsection (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional or special onus on an applicant for an order for costs. Consequently …... we do not agree with the suggestion….... that an order can only be made under s.117(2) in a 'clear case'.
Are there circumstances justifying a costs order
In the circumstances of the case, not all of the matters set out in s 117(2A) of the Act are relevant. Accordingly, only those matters applicable to the matter are discussed below.
Financial circumstances of each of the parties
The applicant wife is currently unemployed and is in receipt of Centrelink benefits. The wife’s Financial Statement filed on 21 February 2022 indicates the wife continues to be engaged in home duties and to be in receipt of Centrelink benefits of approximately $517.65 per week. Her weekly expenses as claimed are $632, with nil mortgage payments. Her assets and superannuation benefits as claimed by her are minimal; an asserted fact disputed by the husband. The wife claims to have some debt. The wife submitted that any order for costs made against her could hinder her financial ability to care for the parties’ child who lives in her primary care.
C Pty Ltd is a bare trustee of the C Trust and has no assets in its own right.
C Pty Ltd submitted that any current lack of means to meet a costs order by the applicant wife ought not to be a barrier to the Court making such an order. Rather, it is either an issue for enforcement as to when the order is sought to be enforced, or a matter the applicant wife wishes to take up with her solicitors, as was occasioned in April 2022 in relation to third party costs. In the circumstances of this matter I accept the submission that the wife’s claimed financial inability to meet a costs order presently is not a barrier to the making of such order, and that the issue of the wife’s means will become an enforcement issue at the relevant time.
Legal Aid
Neither party, nor C Pty Ltd and B Pty Ltd, were in receipt of Legal Aid.
The conduct of the parties
The applicant wife asserts that her joinder application was not vexatious and was appropriate to preserve the property pool which she claims the husband has tried to divest himself of post-separation. However, in the final orders sought, the wife sought no final relief against C Pty Ltd or B Pty Ltd and nor were they necessary parties. It was not a meritorious application for them to be joined to the proceeding.
It was submitted by C Pty Ltd that the wife was aware of the structure of the company, in particular that C Pty Ltd was trustee for the C Trust, and that she had considerable time to have properly formulated her orders sought. I accept this submission.
As referred to in [3], C Pty Ltd was previously a party to the proceeding and subsequently removed as a party to the proceeding. There was no change in circumstance which justified the re-joinder of C Pty Ltd, and the Application in a Proceeding with respect to C Pty Ltd should not have been made.
Whether any party to the proceedings has been wholly unsuccessful in the proceedings
The applicant wife was wholly unsuccessful in her joinder application in respect of C Pty Ltd and B Pty Ltd, and in her application for injunctive relief, despite not being wholly unsuccessful in the entirety of her Application in a Proceeding.
Conclusion
I am satisfied in these circumstances that an order for costs is appropriate.
In exercising the Court’s discretion and in accordance with r 12.28 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), I am satisfied, given the complexity of the matter that it was necessary for King’s Counsel to be engaged by C Pty Ltd and B Pty Ltd for the hearing on 27 October 2022.
The general rule in this Court is that costs are payable on a party-party basis unless the Court decides to exercise its discretion to order costs on other terms, including indemnity costs. The costs sought by C Pty Ltd and B Pty Ltd are modest being costs on a party-party basis.
In all the circumstances, I will make orders in those terms as sought by C Pty Ltd and B Pty Ltd.
I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hartnett. Associate:
Dated: 10 November 2022
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