Asad & Asad (No 2)
[2022] FedCFamC2F 570
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Asad & Asad (No 2) [2022] FedCFamC2F 570
File number(s): PAC 1903 of 2016 Judgment of: JUDGE NEWBRUN Date of judgment: 4 May 2022 Catchwords: FAMILY LAW – costs application by Wife relating to Husband’s filing of a Notice of Discontinuance - costs Order made Legislation: Family Law Act 1975 (Cth), ss. 79A, 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), r. 10.02, 10.03
Cases cited: Wint v Medimobile Pty Ltd [2016] FCCA 102 Division: Division 2 Family Law Number of paragraphs: 41 Date of last submission/s: 29 March 2022 Date of hearing: 22 March 2022 Place: Parramatta Solicitor for the Applicant: Gill Lawyers Counsel for the Respondent: Mr Schroder Solicitor for the Respondent: Rafton Family Lawyers ORDERS
PAC 1903 of 2016 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR ASAD
Applicant
AND: MS ASAD
Respondent
ORDER MADE BY:
JUDGE NEWBRUN
DATE OF ORDER:
4 MAY 2022
THE COURT ORDERS THAT:
1.The Husband shall pay the Wife’s scale costs in the sum of $7,474, in relation to the Husband’s Notice of Discontinuance filed 15 March 2022 and the Wife’s related costs application, and such amount shall be paid from the amount to be distributed to the Husband in accordance with Order 2 c) v) of the Court’s Orders of 14 December 2021.
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 a pseudonym Asad & Asad has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE NEWBRUN
INTRODUCTION AND BACKGROUND
This is the determination of the Wife’s Application for costs, pursuant to Rule 10.03, following the Husband filing a Notice of Discontinuance on 15 March 2022 in relation to his Initiating Application filed 28 January 2022.
The Wife’s Application for costs against the Husband was set out in her Response to Final Orders, filed 17 March 2022.
In relation to the above Application for costs, the Husband’s written submissions state that, “Cost Orders be made as the Honourable Court deems fit.”
The Court, on 14 December 2021, following an undefended hearing held on 13 October 2021 in which the Husband did not appear, had made Orders pursuant to section 79A of the Family Law Act 1975 (Cth) (the Act) setting aside previous property Orders made on 2 August 2016 between the parties, and had then made property orders in substitution for those orders, including Orders that the former matrimonial home be sold, that the proceeds of sale of such home be distributed in a certain manner between the parties, and that the Husband pay the Wife’s costs incidental to the proceedings. The Court had made a Notation to its Orders of 14 December 2021 as follows:
A. Pursuant to Rule 10.13 of this Court’s Rules a party may apply to the Court to set aside Orders made in their absence. Any application by the Respondent Husband, pursuant to Rule 10.13 of this Court’s Rules, seeking to set aside the above Orders, shall be made within 14 days of being notified of such Orders.
The Husband’s above Initiating Application filed 28 January 2022 had sought both interim and final Orders, inter alia, that the Court’s Orders of 14 December 2021 be set aside, and that the Orders made on 2 August 2016 be reinstated. The Orders made on 2 August 2016 included Orders that that the Husband pay the Wife $225,000 and that the Wife transfer all her interest in the said home to the Husband.
On 1 February 2022, the Husband filed an application in an appeal to this Court’s Division 1 appellate jurisdiction seeking Orders in the same vein as the Orders he sought in his above Initiating Application filed 28 January 2022.
On 8 March 2022, the Husband’s Application in an Appeal seeking leave to file a Notice of Appeal out of time was dismissed by the Federal Circuit and Family Court of Australia (Division 1 Appellate Court). A costs Order was made against the Husband in the sum of $8,069.64.
The Wife relies on the following evidence filed to support her above costs Application:
(a)Affidavit of Ms Asad filed 7 March 2022;
(b)Financial Statement of Ms Asad filed 17 March 2022;
(c)Affidavit of Ms H filed 21 March 2022;
(d)Orders and Reasons of Judge Newbrun dated 14 December 2021;
(e)Her Case Outline filed 21 March 2022; and
(f)Her Outline of Written Submissions document filed 28 March 2022.
The Husband relied upon his Outline of Written Submissions document filed 29 March 2022 and his affidavits filed in the course of the proceedings. The Court has also had regard to the Husband’s Financial Statement filed 16 February 2022 being referred to in the Wife’s Written Submissions document.
RELEVANT LEGAL PRINCIPLES
Under Rule 10.03, if a party discontinues an application or response, the other party to the proceeding may apply for costs.
The Court refers to section 117 of the Act in relation to the Wife’s costs Application.
Under subsection (1) of section 117, each party to the proceedings bears his or her own costs subject to, inter alia, subsection (2) of section 117. The Court refers to subsection (2) and subsection (2A) of section 117.
Section 117 (2) provides:
If, in proceedings under this Act, the Court is of opinion that there are circumstances that justify it in doing so, the Court may, subject to subsections (2A), (4), (4A), (5) and (6) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the Court considers just.
The Court now turns to a consideration of relevant matters within subsection (2A) of section 117 of the Act.
(2A) In considering what order (if any) should be made under subsection (2), the Court shall have regard to:
(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.
Relevant matters under subsection (2A) will now be considered.
(a) the financial circumstances of each of the parties to the proceedings.
Both parties will receive significant lump sums of money, pursuant to the Court’s Orders of 14 December 2021 in relation to the sale of the former matrimonial home at B Street, Suburb C.
The Wife’s weekly personal expenditure exceeds her weekly average weekly income, according to her Financial Statement filed 17 March 2022, by $63. On the other hand, the Husband’s average weekly income significantly exceeds his weekly personal expenditure, according to his Financial Statement filed 16 February 2022.
The Wife has liabilities of about $29,000, and the Husband has liabilities of about $15,000, according to their respective Financial Statements.
The Wife asserts that she has outstanding legal fees in the sum of about $46,000 and that of these costs the costs that she incurred up to 14 December 2021 was about $31,000; a difference of about $15,000, but these are not scale costs.
Both parties are in full-time employment.
The Husband pays no child support to the Wife with the subject child aged 8 years; the child lives with the Wife and appears to spend no time with the Husband.
(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.
Neither party is in receipt of a grant of legal aid.
(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.
In relation to these proceedings up to the date of the Court’s judgment of 14 December 2021, the Court has already awarded costs to the Wife; see Order 9 of the Court’s Orders of 14 December 2021 wherein the Court ordered that the Husband pay the Wife’s costs incidental to these proceedings.
The Husband’s costs submissions, by reference to his Affidavit sworn 24 December 2021, assert that the Husband suffered from a medical condition whereby he had a limited mental capacity which precluded his participation in the proceedings in the past. The Court refers to paragraphs 15 to 22, 28 to 32, 46 to 47, and the annexed medical discharge summaries and medication prescription relating to the Husband (including diagnosis of paranoid schizophrenia), of that Affidavit in particular.
The Court refers to the Husband’s Affidavit filed 16 February 2022, in particular paragraph 25, in relation to the Husband visiting his GP in relation to his psychological health issues and the annexed Medicare statement relating to certain mental health treatment being annexure B to that Affidavit.
The Court refers to the Husband’s assertion, in his affidavit sworn 24 December 2021, under the heading “Issues with not complying with the Court Orders made on 2 August 2016”, that due to his mental health he was not able to make a decision and was surviving on medications. He later states that he believes that his mental health “has improved significantly after being on medication for last 11 months now and am able to make decisions that are right for me.”
Again, the Husband filed an Initiating Application on 28 January 2022, inter alia, seeking to set aside the Court’s orders of 14 December 2021. Under the Notation to those Orders, the Husband was permitted to seek to set aside those Orders under Rule 10.13 because those orders were made in his absence. He was required to make an application under Rule 10.13 within 14 days of being notified of the Court’s Orders, if he so decided to make such an application.
He asserts that he became aware on 17 December 2021 of the Court’s Orders of 14 December 2021; in this context he states that on 17 December 2021 a real estate agent informed him of Court Orders against him and that the property needed to be vacated within two days so that the property could be sold. The Husband states that he then logged into the “CommCourt Portal” “and realised that the previous orders made by Honourable Judge Harman have been set aside and new orders have been made by Honourable Judge Newman.”
The Wife’s solicitors sought particulars from the Husband’s solicitors on 8 February 2022 in relation to the above Initiating Application filed 28 January 2022. A reply was received from the Husband’s solicitors on 14 February 2022; the Husband maintained that he was denied procedural fairness in relation to the Court’s Orders of 14 December 2021 having been made in his absence.
The Husband’s submissions assert that the Husband after receiving the judgement of Appeal Judicial Registrar Cameron 8 March 2022, and having had a conference with counsel in relation to prospects, he instructed his solicitors to file a Notice of Discontinuance on 15 March 2022. The Husband’s submissions assert that the Husband discontinued on the first opportunity as soon as he was advised by Counsel following review of the judgement of Appeal Judicial Registrar Cameron.
Despite the above evidence relating to the Husband’s mental health, the Husband does not satisfactorily explain how it was that on the one hand he failed to attend the undefended hearing held on 13 October 2021 (or seek to take any step in the proceedings prior to the delivery of the Court’s Orders on 14 December 2021) by reason of his asserted adverse mental health, yet following being informed on 17 December 2021 that there were Court Orders against him in relation to the property, he was able to take steps to log into the CommCourt Portal and comprehend that the Court had made Orders on 14 December 2021, and then engage solicitors to commence proceedings in this Court on 27 January 2022 under rule 10.13.
The Husband’s submission that his mental health prevented him from participating in the proceedings prior to the Court’s Orders on 14 December 2021 is also inconsistent with the Husband’s assertion, in paragraph 47 of his affidavit sworn 24 December 2021, that he believes his “mental health has improved significantly after being on medication for last 11 months now and am able to make decisions that are right for me.”
In summary, the Court is not satisfied that the Husband has a reasonable explanation for failing to participate in the proceedings prior to 14 December 2021. In any event, the Husband has failed to adduce any persuasive evidence that, pursuant to Rule 10.13, he would have had material arguments available to him that might reasonably have led the Court to make Orders different to the orders made on 14 December 2021; see the decision in Wint v Medimobile Pty Ltd [2016] FCCA 102.
The Husband has also failed to satisfactorily explain why it was reasonable for him to file the Notice of Discontinuance as late as 15 March 2022; he fails to adequately explain why he only gave instructions to file a Notice of Discontinuance after the decision of Appeal Senior Judicial Registrar Cameron 8 March 2022 and having received an advice on prospects from Counsel. He fails to adequately explain why it was necessary for him to commence appeal proceedings in light of the Court’s Notation regarding Rule 10.13 made in its Orders of 14 December 2021, and fails to adequately explain why an advice on prospects from Counsel could not have been obtained earlier, if not before 27 January 2022. In the above circumstances, the filing of his Initiating Application and its continuation until the filing of the Notice of Discontinuance was probably unreasonable.
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the Court.
The Wife’s proceedings commenced on 12 February 2021 were brought about by the Husband’s failure to comply with the Court’s Orders of 2 August 2016. The Husband’s commencement of proceedings on 27 January 2022 related to his failure to participate in the proceedings prior to 14 December 2021.
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings.
The Husband has been unsuccessful in the proceedings by reason of the filing of his Notice of Discontinuance.
(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.
On 13 January 2022 the Wife’s solicitors made an offer to the Husband’s solicitors to withdraw his proceedings, without any costs implications. On 18 January 2022, a counter offer was made by the Husband’s solicitors merely offering that the Husband comply with his previous obligations under the Court’s orders of 2 August 2016, without addressing the substance of the Court’s Reasons for Judgment in respect to its Orders of 14 December 2021.
The Court has considered all the parties’ written submissions and contentions in relation to the Wife’s present costs Application.
Taking into account all the above discussed matters, under ss (2A) of section 117, it will be just that the Husband pay the Wife’s costs relating to the Husband’s proceedings commenced 27 January 2022 and discontinued on 15 March 2022 but those costs should only be paid on the scale basis. The Court is not satisfied, by reference to relevant legal principle relating to indemnity costs, and taking into account all the above discussed matters, that an order for indemnity costs should be made.
The Wife’s solicitors assert that the Wife’s scale costs from 27 January 2022 to 21 March 2022, including counsel fees (scaled) amount to about $7,474. The Court will order that the Husband pay that amount to the Wife and that such amount to be paid from the amount to be distributed to the Husband in accordance with Order 2 c) v) of the Orders made on 14 December 2021.
In the view of the Court, by reason of the Husband filing the Notice of Discontinuance on 15 March 2022, noting the Wife’s Response filed 17 March 2022 merely seeking costs orders against the Husband, and noting Rule 10.02 (5), no other Order should be made by the Court.
I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Newbrun. Associate:
Dated: 4 May 2022
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