Aquita & Hikal-Aquita

[2021] FedCFamC1F 84

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

Aquita & Hikal-Aquita [2021] FedCFamC1F 84

File number(s):	PAC 5664 of 2016
Judgment of:	HANNAM J
Date of judgment:	1 October 2021
Catchwords:	FAMILY LAW – COSTS – Where each party seeks an order that the other party pay their costs in relation to final property proceedings – Where final parenting orders were made with the consent of the parties almost two years prior to the completion of property proceedings – Where consideration of the applicable principles – Where both parties are self-represented – Where the financial circumstances of the parties are unclear – Where there are issues regarding the conduct of both parties – Where neither party was wholly unsuccessful – Where offers of settlement related to both property and parenting aspects of the proceedings – Where little weight is given to those offers – Where circumstances do not justify an order for costs – Applications dismissed
Legislation:	Family Law Act 1975 (Cth) s 117
Cases cited:	Aquita & Hika-Aquita [2021] FamCA 491 D & D (Costs)(No. 2)(2010) FLC 93-435 Penfold v Penfold (1980) 144 CLR 311
Division:	Division 1 First Instance
Number of paragraphs:	33
Date of last submission/s:	20 August 2021
Place:	Sydney
Solicitor for the Applicant:	Self-Represented
Solicitor for the Respondent:	Self-Represented

ORDERS

PAC 5664 of 2016

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MR AQUITA

Applicant

AND:

MS HIKAL-AQUITA

Respondent

ORDER MADE BY:	HANNAM J
DATE OF ORDER:	1 OCTOBER 2021

THE COURT ORDERS THAT:

1.The wife’s application that the husband pays her costs is dismissed.

2.The husband’s application that the wife pay his costs is dismissed.

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 pseudonyms Aquita & Hikal-Aquita is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

HANNAM J:

INTRODUCTION

1. Following the completion of property settlement proceedings, both the applicant husband and respondent wife pressed applications for the other party to pay their costs in relation to those proceedings.

2. The applicant husband seeks that the wife pay his legal costs in the sum of $74,247.20 which he contends is calculated in accordance with Schedule 3 of the Family Law Rules and the respondent wife seeks that the husband pays her costs in the sum of $165,000.

3. The parties agreed that the respective applications for costs could be dealt with in chambers after submissions had been filed. Following receipt of both parties’ written submissions, judgment was reserved in August 2021.

4. The question for me to determine is whether there are circumstances that justify departing from the usual Rule that each party shall bear his or her own costs.

   BACKGROUND

5. The parties who are both in their 50s, were born in an overseas country. The husband immigrated to Australia in 1987 and the wife immigrated also following their marriage overseas in 1998. Throughout the marriage the husband was in full-time employment. The wife principally assumed the role of homemaker and primary carer for the parties’ two daughters (“the children”) whom are now aged 10 and 13, but was also engaged at times in paid employment outside the home.

6. Over the course of the marriage the parties purchased three properties, with one becoming the family home and the other two being investment properties. They also acquired other assets such as vehicles and share portfolios.

7. The parties separated on a final basis sometime between late 2015 and April 2016.

8. The procedural background of this matter can be gleaned from the following extracts from the final Judgment Aquita & Hika-Aquita [2021] FamCA 491:

   20.The husband initiated proceedings in December 2016 seeking orders in relation to parenting and property.

   21.In her Response filed a short time later the wife sought orders only in relation to the future parenting of the children. The wife later amended her Response slightly with respect to the children's time with the husband and also sought property settlement orders.

   22.Following a hearing on 16 January 2017, the parties agreed on interim orders ("the 2017 orders") that the children live with the wife and spend defined time with the husband. They also agreed on orders that the wife have sole use and occupation of the family home and that the husband have sole use and occupation of the R St property. The husband moved out of the family home and the parties have each lived in these properties since that time. 

   23.The 2017 orders made with the parties' consent also provided for the sale of the investment property and that $150,000 of the proceeds of sale be paid to each party and the balance into an offset mortgage account to service the loans on the family home and the R St property.

   24.In April 2017 orders were made by a Registrar directing the parties to provide financial disclosure. The husband in particular was ordered to disclose his past and current shareholdings and any car loans, while the wife was required to provide information in relation to any pension entitlement relating to her previous role as a lawyer in the overseas country. Each party was also directed to provide disclosure as to any probate documents they held regarding overseas inheritances.

   25.In July 2018 orders were made for a mechanism to identify and value the parties' respective alleged property interests in the overseas country. The steps required to be taken pursuant to those orders were not taken and the parties' respective contentions about the other's overseas interests have not been resolved, nor the identified property valued.

   26.In March 2019 the parties were divorced.

   27.On 4 September 2019 the parties reached agreement in relation to the future parenting arrangements for their children and orders were made with their consent for the children to live with the wife for nine nights a fortnight and with the husband for five nights and to spend half of each school holiday period with each parent on a "week about" basis. 

   28.There was a delay in listing the property dispute for hearing due to the restrictions associated with the COVID-19 pandemic and the requirement that the hearing proceed in person as the parties were each self-represented. The hearing eventually took place on 5 November 2020.

9. On 9 July 2021 final judgment was delivered and orders were made by way of final property adjustment which brought about a division of the asset pool of approximately 55% to the wife and 45% to the husband, with the parties retaining one property each and the husband receiving the balance of monies in the parties’ offset account.

   THE LAW & DISCUSSION

10. Applications for costs in this Court are the exception to the rule. Section 117(1) of the Family Law Act 1975 (“the Act”) sets out the general rule as being that each party is to bear his or her own costs. That principle is, however, subject to subsection (2) which gives a Court a discretion to make an order for costs if there are circumstances that it in the opinion justify it in doing so. Any such order for costs is to be pursuant to section 117(2) “as the Court considers just”.

11. The High Court in Penfold v Penfold[1] indicated that the circumstances justifying an order for costs need not be exceptional, but they must, of themselves, be sufficient to justify the making of an order for costs.  Therefore, there is no additional or special onus on an applicant seeking an order for costs other than the Court finding justifiable circumstances to make such an order.

    [1] (1980) 144 CLR 311

12. Section 117(2A) sets out the relevant matters, if any are applicable, to which the Court is to have regard in considering an order for costs. The matters relevant in this case are considered below.

    The financial position of each of the parties to the proceedings

13. The husband submits that he does not have the financial capacity to pay an order for costs as he is in casual employment and earns a minimal income (being approximately $20,000 per annum) although he does not provide any evidence of this assertion. He also asserts that he has no funds remaining of the funds received by way of partial property settlement in January 2017. Although the husband received the balance of the parties’ offset account by way of final property settlement, he submits that the balance of this account has been significantly reduced as these are the only funds available to him for mortgage repayments and his day to day living expenses. He provides evidence that the balance of this account as at 4 August 2021 was $28,413.13.

14. Curiously, in written submissions the husband makes no reference to those assets which he retained following final property adjustment (other than the offset account) such as his superannuation entitlements, motor vehicle and share portfolio. The evidence in relation to each of these assets was unsatisfactory in the final property proceedings though it was determined that the husband’s vehicle is valued at $26,450, his share portfolio is valued at $494 and his superannuation entitlements are valued at $228,273.73.

15. The wife provided no current evidence and makes no clear submissions regarding her current financial circumstances other than claiming that she is struggling to find employment in circumstances where she is responsible for caring for the children for nine days per fortnight. Although the wife has not provided any clear information regarding her current financial position it can be gleaned from her Financial Statement filed in January 2020 that at that time her only source of income was government entitlements in the amount of approximately $480 per week. Further, it was not in dispute in the proceedings that the wife holds a superannuation interest in the amount of $53,735.66 and owns a vehicle valued at $7,000.

16. The wife contends in this application that the husband is in a more favourable financial position than he asserts (including in the property proceedings) and has chosen to work less hours and be paid in cash in order to mislead the Court as to his true financial position. The wife similarly contends that the husband receives rental income from an apartment held in his name in Country J and he also receives income from shares. There was no evidence adduced in the property proceedings or in this application as to these contentions.

17. Although there are some uncertainties in relation to both party’s financial positions, it appears that while each party has some capacity to satisfy an order for costs, both appear also to be experiencing some financial challenges. However, it is trite to say that even if the Court accepts a party’s contention that he or she is suffering from financial hardship this matter is not determinative as impecuniosity is no bar to the making of an order for costs,[2] particularly where there are circumstances which otherwise justify an order for costs.

    [2]D & D (Costs)(No. 2)(2010) FLC 93-435.

    Whether any party to the proceedings is in receipt of assistance by way of legal aid

18. Neither party is in receipt of legal aid.

    The conduct of the parties to the proceedings in relation to the proceedings

19. The husband contends that he incurred unnecessary legal fees due to the wife maintaining her position that she was entitled to a final property adjustment of between 60-70% of the parties’ total property interests. Although s 117(2A)(c) of the Act provides that in considering whether to make an order for costs the Court should have regard to the conduct of the parties in proceedings including “in relation to pleadings” this is only one factor for the Court to take into consideration.

20. In my view the wife was entitled to pursue her own case and have it tested on its merits and it cannot be said that the claim for a property settlement in her favour was without merit. It should also be considered, that while the wife did seek at final trial an adjustment of 75% (although it was not clear if the actual orders she sought would achieve this result), the husband submits that at some time during the course of proceedings the wife sought a final property adjustment that would see her receive a 60% share of the total property interests. This share is not significantly greater than the 55% adjustment that the wife did receive in orders made following the conclusion of final hearing.

21. In relation to the wife’s conduct, the husband also submits that she did not respond to a letter dated 9 October 2017 seeking disclosure as to the manner in which she had been paying her legal fees and how the interim property adjustment she received has been disbursed. The husband does not explain how the wife’s failure to respond to this letter caused him to incur unnecessary legal fees.

22. It is submitted by the husband that the parties reached an agreement in principle during a conciliation conference with a Registrar in September 2017. He further submits that the wife consequentially withdrew her consent to this agreement after the conference and this caused him to incur further legal fees. The wife’s failure to agree to offers of settlement is something I will return to later in these Reasons. It suffices to say in relation to the wife’s conduct that at this stage this agreement was said to have been reached, the property and parenting disputes were completely enmeshed and either party’s failure to reach agreement cannot be isolated to be an issue in relation to the conduct of the property proceedings.

23. The husband’s conduct in relation to the proceedings is also a significant focus in the wife’s submissions. However, virtually all of her submissions in this regard relate to the parenting dispute and amount to little more than general comments on his personal character. For example, the wife submits that throughout the proceedings the husband delayed the court process by “twisting facts”, changing his position throughout mediation and following the parties reaching agreement and by filing additional applications. The wife, however, provides no evidence of these assertions and it is unclear how they relate to this application.

24. It was the wife’s case at final hearing that the husband had made significant withdrawals from the parties’ joint bank account and treated it as his own property, and she submits that this conduct should also be taken into account in relation to her costs application. She also submits that the husband sold shares and a vehicle, lent money to his relatives and generally hid and wasted matrimonial assets. Further, the wife contends that these actions of the husband represent a failure of the husband fulfilling his duty of full and frank disclosure. The wife provided no evidence of these assertions during final proceedings or in relation to this costs application. In those circumstances it is not possible for these assertions as to the husband’s conduct to be given any weight in this application.

25. The wife is generally critical of the husband’s conduct throughout proceedings claiming that he was manipulative and mislead the Court, although she does not submit that this lead to her incurring further costs in the proceedings. Although it can be taken that such conduct if proven may well have lead to a party incurring further costs in the proceedings the wife provides virtually no evidence that the husband conducted himself in this way. One matter that the wife does rely upon in this regard is at a court event before a Registrar in October 2018 when it appears the parties had reached an agreement about the value of a property held by the husband overseas with such agreement noted by the Registrar. However, by the time of final hearing the husband had withdrawn his consent to this property being placed on the Balance Sheet with this agreed value. The wife contends that this is an example of the husband “manipulating” the Court. It can be observed however that a notation by a Registrar is not an order of the Court and in all of the circumstances, especially given both parties change of position since that court event, in my view little weight can be attached to that notation in these proceedings.

    Whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court

26. Neither party contends that the proceedings were necessitated by a failure of a party to the proceedings to comply with previous orders of the Court however each party observes that on one occasion the other party did not comply with particular orders.

27. It is contended by the husband that the wife did not comply with orders of the Court which facilitated the valuation of the parties’ overseas property and as a result this property was not included in the Balance Sheet at final hearing. The husband provides evidence of letters sent by his lawyers to the wife’s legal representatives which do seek implementation of the orders for the valuation of the property. However, in circumstances where the husband merely asserts that the wife “did not fully respond” to the letters but provides no evidence of her responses, no finding about these matters was made in the proceedings other than that the valuation orders were not implemented.

28. The wife makes complaint that the husband did not comply with orders made for disclosure of documents which were necessitated by his failure to comply with disclosure obligations as required under the rules. The wife makes general assertions about the husband’s failure to disclose but provides no evidence as to these matters or how this failure necessitated further proceedings or caused her to accrue further legal fees.

    Whether any party to the proceedings has been wholly unsuccessful in the proceedings

29. It is correctly contended by the husband that neither party was wholly unsuccessful in the proceedings. The wife makes no submissions in relation to this section other than acknowledging that it is something the Court may have regard to.

30. The husband further submits that although neither party was wholly unsuccessful, the final orders made were more in line with the orders sought by the husband than the wife. While I accept this submission made by the husband, in circumstances where neither party was wholly unsuccessful in the proceedings, little weight can be attached to this matter.

    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

31. The husband submits and provides evidence that he made several offers in writing to the wife to settle the proceedings.

32. The wife submits that all offers of settlement made by the husband related to both the parenting and property aspects of the proceedings and agreement was sought effectively to the orders as a package. It is to be noted that the parenting orders proposed by the husband in each of the offers of settlement were substantially different to those made by the Court. The husband at one time sought that he hold sole parental responsibility in regards to education and sought that the children live with the parties on an equal basis. Ultimately, final parenting orders provided that the parties hold equal shared parental responsibility in relation to all issues and that the children live with the wife and spend five nights per fortnight with the husband. As the parenting proposals were unacceptable to the wife she was not able to accept any offers of settlement made by the husband. I accept this submission made by the wife and consider it inappropriate to place much weight on these offers of settlement when they were on all occasions presented by him as dependent upon the wife’s acceptance of the parenting orders.

    CONCLUSION

1. Having regard to the foregoing matters, I am not satisfied that there is sufficient justification to depart from the usual rule that each party bears their own costs.

I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hannam.

Associate:

Dated:       1 October 2021