Banh & Siu

[2021] FamCA 430

FAMILY COURT OF AUSTRALIA

Banh & Siu [2021] FamCA 430

File number(s):

MLC 12059 of 2019

Judgment of:

MACMILLAN J

Date of judgment:

23 June 2021

Catchwords:

FAMILY LAW – COSTS – where the Applicant seeks an order for costs following the making of consent orders arising out of threshold proceedings as to forum and jurisdiction – where the Applicant seeks an order that his costs be paid on an indemnity basis – where the First Named Respondent seeks an order that costs be reserved until the determination of the substantive proceedings – where the Fourth and Fifth Named Respondents did not file submissions as to costs – where the circumstances of this case are not exceptional – where an order for costs is made in favour of the Applicant on a party and party basis – where the matter is listed for mention to determine the quantum of the costs to be paid.

Legislation:

Family Law Act 1975 (Cth) s 117

Family Law Rules 2004 (Cth) r 19.18

Cases cited:

Colgate–Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 [1993] FCA 801

Kohan & Kohan (1993) FLC 92-340

Munday v Bowman (1997) FLC 92-784

Number of paragraphs:

32

Date of last submissions:

19 March 2021

Date of hearing:

Written Submissions

Place:

Melbourne

Solicitor for the Applicant:

Kammoun Sukari Lawyers

Solicitor for the First Named Respondent:

Berrigan Doube Lawyers

Solicitor for the Second Named Respondent:

Roberts Gray Lawyers

Solicitor for the Third Named Respondent:

Roberts Gray Lawyers

Solicitor for the Fourth Named Respondent:

Mustard Seed Lawyers

Solicitor for the Fifth Named Respondent:

Mustard Seed Lawyers

ORDERS

MLC 12059 of 2019

BETWEEN:

MR BANH

Applicant

AND:

MS HIUNG
First Named Respondent

AND:

MS SIU
Second Named Respondent

AND:

MR HOK
Third Named Respondent

AND:

MS CHAO
Fourth Named Respondent

AND:

MR PANG
Fifth Named Respondent

ORDER MADE BY:	MACMILLAN J
DATE OF ORDER:	23 JUNE 2021

THE COURT ORDERS THAT:

1.The First Named Respondent pay the Applicant’s costs of an incidental to paragraphs 1 and 3 of her Response to Initiating Application filed 21 February 2020 on a party and party basis.

2.The quantum of the costs to be paid by the First Named Respondent to the Applicant be reserved.

3.The Applicant’s application for costs be otherwise adjourned for mention before the Honourable Justice Macmillan at 11.00 am on 29 June 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 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).

IT IS NOTED that publication of this judgment by this Court under the pseudonym Banh & Siu has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

MACMILLAN J

1. This matter initially came before me in the Judicial Duty’s List on 10 June 2020. The applicant (“the de facto husband”) filed his Initiating Application on 24 October 2019 seeking orders for property settlement. This included orders with respect to properties owned by third parties.

2. The first named respondent (“the de facto wife”) filed a Response to the de facto husband’s Initiating Application on 21 February 2020 seeking orders striking out the de facto husband’s application on the basis of Australia being an inappropriate forum. In the alternative the de facto wife sought orders dismissing the de facto husband’s application on the basis that the parties were not in a de facto relationship as claimed by the de facto husband and that the Court did not have jurisdiction to hear the application. Further in the alternative she sought orders dismissing the husband’s application on the basis that it had been filed more than 12 months after she and the de facto husband divorced.

3. The matter was listed for a 3 day hearing of the threshold issues commencing on 28 October 2020. The second named respondent Ms Siu and third named respondent Mr Hok who are the registered proprietors of one of the properties the subject of the proceedings were excused from appearing at the hearing on 28 October 2020.

4. The de facto husband filed an Amended Initiating Application on 1 July 2021 seeking the following orders:

   1.A declaration that the de facto husband and de facto wife were in a de facto relationship from 20 November 2014 to 22 August 2018.

   2.Pursuant to s 44 of the Family Law Act 1975 (Cth) the de facto husband is granted leave for filing 12 months following the date of divorce.

   3.That the de facto wife’s response seeking that Australia is not an appropriate forum be dismissed.

   4.That the de facto wife pay the husband’s costs incidental to the threshold hearing.

5. The matter was unable to conclude within the three days allocated to it and was adjourned part heard for a further hearing on 21 December 2020. On 22 December 2020 I made orders reserving the matter for judgment. On 10 February 2021 the legal practitioners for the de facto husband and de facto wife emailed my Chambers with a proposed minute of orders, the de facto wife having conceded that this Court was an appropriate forum and that there had been a de facto relationship, and on 12 February 2021 I made the following orders :

   IT IS ORDERED THAT UPON THE COURT being satisfied that it has the jurisdiction to hear this matter and that it is an appropriate forum I MAKE THE FOLLOWING DECLARATION

   1.A declaration that a de-facto relationship existed between the applicant and the first respondent between 20 November 2014 and 22 August 2018 as defined by s 4AA of the Family Law Act 1975 (Cth).

6. All question of costs were reserved for determination in Chambers and I made orders for the filing of written costs submissions incidental to the threshold hearing.

7. The de facto husband filed his written submission on 8 March 2021 seeking an order that the de facto wife pay his costs fixed in the sum of $79,001 plus interest made up as follows:

   (a)Costs to 28 October 2020: $65,801

   (b)Costs from 1 November 2020 to 22 December 2020: $11,000; and

   (c)Costs from 23 December 2020 to present: $2,200.

8. The de facto wife filed her written submissions on 19 March 2021 opposing the Court making an order for costs at what she described as this “preliminary stage of the proceedings”.  It was her submission that costs should be reserved until the determination of the final property proceedings.

9. Although on the first day of the hearing the fourth and fifth named respondents made submissions in relation to the forum issue they otherwise did not participate in the hearing. No order for costs was sought against them and no submissions were filed on their behalf as to costs.  

   LEGAL PRINCIPLES

10. Pursuant to s 117(1) of the Family Law Act 1975 (Cth) ("the Act") the general rule in this Court is that each party to proceedings pursuant to the Act shall bear his or her own costs of those proceedings. However if the Court is satisfied that there are circumstances in the particular case which justify it doing so it can make such order as to costs as it considers just (s 117(2)).

11. In considering what if any order should be made the Court must have regard to the matters in s 117(2A) of the Act which are 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, inspections, 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.

12. Although the Court is required to consider all of these factors clearly their relevance to a particular case will depend upon the circumstances of that case.

13. Rule 19.18 of the Family Law Rules 2004 (Cth) ("the Rules") sets out the various methods by which any costs that are ordered may be calculated. The Court may order costs of a specific amount, as assessed on a particular basis such as party and party or indemnity costs, in accordance with the method specified in the order or for part of a case or part of an amount assessed in accordance with Schedule 3 of the Rules. The general rule is that when the Court makes an order for costs those costs are calculated on a party and party basis.

    ARE THERE CIRCUMSTANCES JUSTIFYING A COSTS ORDER

    Financial Circumstances of each of the Parties

14. The de facto husband is 68 and lives and is employed in Country B as a manager earning $10,140 per annum.  The de facto husband submits that the company he works for has been temporarily closed because of the COVID-19 pandemic. The de facto wife does not accept the husband’s financial circumstances.

15. The de facto wife is 64 and she says that she is unemployed. She lives with her sister in the People’s Republic of China (“China”) and says that she is dependent upon the support she receives from her family and friends for her living expenses and payment of her legal fees. The de facto wife’s case is that she does not own any real property and has only limited cash and superannuation in Australia.

16. As a result of the de facto wife’s objection to both jurisdiction and forum the parties have not as yet made full and frank disclosure. In support of his application the de facto husband referred to numerous financial transactions made by the de facto wife which she did not deny.  At the conclusion of the de facto wife’s evidence I expressed my reservations about her evidence and although there is some uncertainty about the de facto wife’s financial circumstances I am not satisfied that she does not have the capacity to meet an order for costs.

17. Although in my view the de facto husband’s financial circumstances are not alone sufficient to justify an order for costs in his favour even if I were to accept the de facto wife’s evidence with respect to her financial position in my view that would not preclude the Court making an order for costs in his favour. 

    Legal Aid

18. Neither the de facto husband nor the de facto wife is in receipt of legal aid.

    The Conduct of the Parties to the Proceedings

19. In summary it is the de facto husband’s case that his trial material contained what he described as “a plethora of objective evidence” in support of his case as to the existence of a de facto relationship and the forum issue. This evidence with respect to the de facto relationship included but was not limited to the following examples of the parties:

    ·continuing to live together after the divorce including having a sexual relationship;

    ·buying property together, including after they divorced, and establishing family trusts;

    ·travelling and taking holidays together;

    ·socialising and participating in family events; and

    ·making joint decisions about the purchase and sale of personal assets.

20. The de facto husband submitted that although the de facto wife was forced to make significant concessions during cross-examination, ultimately consenting sometime after the conclusion of the hearing to the orders he sought, he had by then been put to the significant expense of proving his case. The de facto husband submitted that he would not have incurred this expense if the de facto wife had not denied the existence of a de facto relationship and resisted the de facto husband’s case with respect to forum. Having regard to the nature and extent of the de facto husband’s evidence and my reservations with respect to the de facto wife’s evidence I accept that there is some force in the de facto husband’s submission that the de facto wife was not acting in good faith.

21. The de facto wife in reply relied upon the de facto husband’s failure to comply with orders and how she says that conduct added to the cost of the proceedings. Even if I were in a position to determine that issue in my view it would not alter the fact that it was the de facto wife who took issue with both this Court’s jurisdiction and forum maintaining in particular her denials with respect to the existence of a de facto relationship notwithstanding the de facto husband’s evidence and the fact that there were significant aspects of that evidence which she did not challenge. The de facto wife continued to deny the existence of that relationship notwithstanding that as the case proceeded it became clearer that she and the de facto husband had lived in a de facto relationship, as defined by the Act, following their divorce.

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

22. This is not a relevant consideration in this case.

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

23. In circumstances where the de facto wife ultimately made concessions with respect to both forum and the existence of a de facto relationship between the parties between 20 November 2014 and 22 August 2018, it is not strictly the case that the de facto wife’s application has been wholly unsuccessful. However the fact that the de facto wife essentially withdrew her opposition to the de facto husband’s application which is in my view a complete vindication of the de facto husband’s position is a matter that the Court can and in this case in my view should have regard to.

    Whether any party to the proceedings has made an offer in writing to the other party to the proceedings to settle and the terms of any such offer

24. Neither party sought to rely upon any offer in writing to settle the matter.

25. I am satisfied that for all the reasons discussed that there are circumstances in this case which justify the Court making an order for costs in the de facto husband’s favour.

    Indemnity Costs

26. Although it is not totally clear from his submissions I have assumed that the costs sought by the de facto husband have been calculated on an indemnity basis. 

27. The general rule is that when the Court makes an order for the payment of costs by one party to the other, those costs are payable on a party and party basis and the Court “…should not depart lightly from the ordinary rules relating to costs between party and party and the circumstances justifying the departure should be of an exceptional kind" (Kohan & Kohan (1993) FLC 92-340 (at page 79,614)) (“Kohan”).

28. Holden CJ in Munday v Bowman (1997) FLC 92-784 at page 84,660, Holden CJ summarised the circumstances which might warrant an order for indemnity costs identified by Shepherd J in the decision of Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 ("Colgate"). They were in summary as follows:

    ·     Where an action has been commenced or continued in circumstances where a party properly advised should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts;

    ·     The making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud;

    ·     Evidence of particular misconduct causing loss of time to the court and to other parties;

    ·     The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions;

    ·     An imprudent refusal of an offer to compromise.

29. In my view although the de facto wife’s case was flawed I am not satisfied that the circumstances of this case are as “exceptional” as envisaged by the Full Court in Kohan. In these circumstances I am not satisfied that I should depart from the general rule and order costs on an indemnity basis.

    CONCLUSION

30. The de facto wife submitted the substantive proceedings being in there early stages and the parties’ entitlements being unclear it would be premature to make an order for costs and that the Court should await the outcome of the substantive proceedings before determining the question of the costs of the threshold issues. The Court being then in a position to make orders that could be enforced against the de facto wife’s entitlements if any. It is inherent in this submission that it is the de facto wife’s case that if she does not have any entitlement to property in Australia that the Court should not make any order for costs arising out of the threshold proceedings. The de facto wife further submitted that reserving the costs would allow her to participate in the substantive proceedings without prejudice to the de facto husband.

31. These are discreet proceedings and in my view although the de facto husband may have difficulty in the short term enforcing any order for costs it does not follow that the Court should not make an order where it is satisfied that there are circumstances that justify it doing so. These threshold proceedings were conducted by the de facto wife at a significant cost to the de facto husband. In these circumstances I do not propose to reserve the question of the de facto husband’s costs.

32. I am however satisfied that I should make an order for a specific amount and on that basis I propose to list the matter for mention. This will allow the parties the opportunity to reach agreement as to the quantum of costs calculated on a party and party basis and absent agreement the opportunity to make brief submissions with respect to this issue. 

I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Macmillan.

Associate:

Dated:       23 June 2021