Cao and Chau

[2019] FamCA 416

FAMILY COURT OF AUSTRALIA

CAO & CHAU [2019] FamCA 416

FAMILY LAW – COSTS – Where the respondent’s conduct exacerbated the applicant’s costs during proceedings – Where the respondent did not provide full and frank disclosure – Where the respondent was wholly unsuccessful in the proceedings – Where the applicant made a number of offers for settlement – Where those offers would have resulted in a better outcome for the respondent than achieved by litigation – Where the circumstances are not so exceptional to attract indemnity costs – Order made for the respondent to pay party-party costs.

Family Law Act 1975 (Cth) s 117(2A)

APPLICANT: Mr Cao

RESPONDENT: Ms Chau

FILE NUMBER: SYC 2741 of 2014

DATE DELIVERED: 3 July 2019

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Rees J

IN CHAMBERS: 1 July 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Christie of Senior Counsel

SOLICITOR FOR THE APPLICANT: Linden Legal

SOLICITOR FOR THE RESPONDENT: W B Legal

Orders

IT IS ORDERED

1. That the wife pay the costs of the husband of the substantive proceedings, as agreed or assessed, on a party and party basis, such costs to be paid within three months of agreement or assessment.

Note: The form of the order is subject to the entry of the order in the Court’s records.

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

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 r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 2741 of 2014

Mr Cao

Applicant

And

Ms Chau

Respondent

REASONS FOR JUDGMENT

1. Defended proceedings in relation to property between Mr Cao (“the husband”) and Ms Chau (“the wife”) were determined by judgment delivered on 27 February 2019.

2. The wife’s application for property settlement was dismissed.

3. The husband, who was the respondent to the application, has made an application for an order that the wife pay his costs of the proceedings on an indemnity basis, or, in the alternate, as agreed or assessed.

4. The husband has incurred costs of $126,395.52.

5. On 29 March 2019, a registrar made orders for each party to file and serve written submissions in relation to the issue of costs. The wife’s material was to be e-filed by 10 May 2019 and the registrar indicated that the application would be dealt with in chambers after 1 June 2019.

6. The wife has filed no material.

7. The husband relies on an affidavit of his solicitor and written submissions.

8. The application falls to be determined having regard to the provisions of s117(2A) of the Family Law Act 1975 (Cth) which will be considered in so far as each is relevant.

   a)        the financial circumstances of each of the parties to the proceedings;

9. The husband is retired. He owns an unencumbered unit in which he lives and has invested funds. His assets were valued at trial at $1,421,762.

10. As is explained in the reasons for judgment, no finding could be made about the wife’s assets in Country B.

    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;

11. The husband relies on the wife’s conduct in the proceedings.

12. At paragraphs 22 to 27 of the reasons, the husband’s efforts to obtain proper financial disclosure from the wife are set out.

13. Orders requiring the wife to make financial disclosure were made on 8 August 2014; 31 October 2014; 29 January 2015; and 27 June 2018. On each occasion, those orders were made on the application of the husband.

14. In addition, the husband was obliged to issue subpoenas and a Notice to Admit Facts (to which the wife did not respond).

15. The wife produced a volume of documents which related to bank accounts belonging to third parties which required further work by the husband’s solicitors and which were ultimately demonstrated to have no relevance to the present matter.

16. Further, the wife actively resisted the husband’s attempts to secure production of documents relating to the transfer by her to her brother of a property in Country B and to the alleged loans from her family, asserting, through her lawyers, that the production of those documents would serve no legitimate forensic purpose.

17. I accept that the wife’s conduct exacerbated the husband’s legal costs.     

    e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;

18. The wife sought an order that she receive an amount equivalent to half of the assets held by the parties.

19. At all relevant times, the husband’s application was that the wife’s application be dismissed.

20. Her application was dismissed.

21. She was wholly unsuccessful.

    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;

22. The husband made a number of offers of settlement.

23. On 16 February 2015, the husband offered to pay the wife $50,000.

24. On 11 May 2015, the husband offered to pay the wife $100,000, each party otherwise to retain the assets in his or her possession.

25. On 19 May 2015, the husband offered $75,000.

26. On 10 June 2015, the husband offered $50,000.

27. None of the husband’s offers received any response from the wife.

28. The only offer made by the wife, of which I am aware, was an offer to settle for $100,000 at the Conciliation Conference on 11 May 2015. The solicitor for the husband deposed that, when the husband accepted the wife’s offer, she withdrew the offer and asked instead for $800,000. .

29. The husband’s offers, if accepted, would have resulted in the wife receiving a sum of money and would have placed her in a better position than that she achieved by pursuing the litigation.

30. I am satisfied, having regard to all of those matters, that it is appropriate that the wife pay the husband’s costs of the proceedings.

Indemnity costs

1. The husband relies on the findings in the reasons for judgment that the wife’s failure to make proper disclosure was deliberate.

2. At paragraphs 148 and 149 of the reasons, I stated:

   I am not satisfied that the wife has made proper disclosure and I am unable to make a finding about what assets she may have in Country B.

   It was not submitted in the wife’s case that any lack of disclosure was inadvertent. The wife’s failure to make proper disclosure was deliberate, as was amply demonstrated in her cross-examination where she repeatedly said that relevant documents were in her possession in Country B or in the possession of her brother. It was peculiarly within the wife’s power to make disclosure of her bank accounts in China and Country B and only she could have ensure that the statements and other relevant documents relating those accounts were before the Court. Similarly, it was only the wife who could have put before the Court the documents relevant to the various transfers of the Suburb J apartment which she said were in the possession of her brother. Absent any evidence on the part of the wife that she had asked for the documents and that her brother had refused to give them to her, the conclusion that her failure to provide those documents was deliberate is inevitable.

3. The law in relation to indemnity costs has been the subject of a number of judgments by the Full Court and is well known.

4. The Court needs to be satisfied that there are exceptional circumstances in this case which would enliven the discretion to depart from the general rule that each party pay his or her own costs, and make an order for costs on a solicitor/client or indemnity basis.

5. I am not satisfied that the conduct which has been outline above comes within that category of exceptional conduct that would justify the making of an order for indemnity costs.

I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rees delivered on 3 July 2019.

Associate:

Date: 3 March 2019