Chang and Liao and Ors (No 2)

[2009] FamCA 980

FAMILY COURT OF AUSTRALIA

CHANG & LIAO AND ORS (NO. 2) [2009] FamCA 980

FAMILY LAW – COSTS

Family Law Act 1975 (Cth)

APPLICANT: Ms Chang

RESPONDENT: Mr J Liao

SECOND RESPONDENT: Mr H Liao

THIRD RESPONDENT: C Pty Ltd

FILE NUMBER: SYC 1271 of 2008

DATE DELIVERED: 15 September 2009

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Judicial Registrar Loughnan

HEARING DATE: 15 September 2009

REPRESENTATION

APPLICANT: In Person

RESPONDENT: No appearance

COUNSEL FOR THE 2^ND & 3^RD

RESPONDENTS

Ms Doust

SOLICITOR FOR THE RESPONDENTS: Yau & Wang Lawyers

Orders

1. That the wife pay to the solicitor for the 2^nd and 3^rd Respondents $30,000 by way of the costs of the 2^nd and 3^rd Respondents of and incidental to the property proceedings concluded by orders on 17 July 2009.  Payment to be made as follows:

   (a)Firstly from the net proceeds of sale of the property at D in the State of New South Wales forthwith upon the sale of that property and for the purposes of that order that payment is to rank after subparagraph (d) of order 3 of the orders made on 17 July 2009 AND those orders are varied for the purpose of giving effect to that obligation.

   (b)In the event that prior to the sale of that property the wife is paid $75,000 through her solicitor by the husband, pursuant to Order 1 of the orders of 17 July 2009, $30,000 is to be paid forthwith from that sum to the solicitor for the 2^nd and 3^rd Respondents; and

   (c)In any event that $30,000 is not paid earlier is to be paid within six (6) months from today’s date. 

2. No order is made in relation to the costs of these proceedings.

3. The Wife shall forthwith advise the solicitor for the 2^nd and 3^rd Respondents of the date appointed for settlement of the sale of the D property.

IT IS NOTED

1. For the purposes of the Wife securing further legal advise that the character of the payment referred to in Order 1 made on 17 July 2009 is property settlement and not costs as between the Wife and the Husband, which issue is yet to be agitated by either party.

IT IS NOTED that publication of this judgment under the pseudonym Chang & Liao and Ors is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 1271 of 2008

MS CHANG

Applicant

And

MR K LIAO

First Respondent

And

MR H LIAO

Second Respondent

And

C PTY LTD

Third Respondent

REASONS FOR JUDGMENT

1. These are proceedings for costs being the costs of the third parties to proceedings for settlement of property determined by me after a hearing in March and May of this year, by final judgment delivered on 17 July 2009.  The applicants for costs are the husband’s brother, H Liao, and his company C Pty Ltd.  They were belatedly named in the wife’s case as respondents in relation to orders to set aside various transactions so as to repatriate into the pool of assets moneys that the wife was going to argue, were really matrimonial funds.

2. The wife sought that a transaction whereby the husband transferred an interest in a taxi plate to C Pty lTd in August 2006 be set aside, or the transaction whereby the husband transferred the proceeds of sale of the taxi plate to his brother H Liao be set aside, and a transaction whereby the husband transferred his shares in C Pty Ltd for a nominal sum to H Liao be set aside.  The wife was unsuccessful in relation to all three applications. The company and H Liao seek their costs.

3. Generally parties bear their own costs.  The court has power to make an order for costs and in doing so is required to consider certain things.  As has been said on behalf of the applicants these are unusual circumstances because the applicants for costs are strangers to the marriage.  Normally both parties to property settlement proceedings seek orders and in that way one can understand the logic of a regime whereby parties bear their own costs, rather than the approach taken generally in civil litigation of costs following the event.

4. Costs following the event means that if a party is successful they get their costs; if a party is unsuccessful they do not.  The thrust of the submission here is that there are two propositions.  Firstly, the wife was wholly unsuccessful as against the second and third respondents and, secondly, they were strangers to the litigation and they should be protected in relation to their costs. 

5. The wife appears today on her own account; she does not have legal representation.  She has misunderstood the terms of the orders that I have made.  She has misunderstood comments I made in relation to an alternate prayer for relief or the possibility of self-executing orders and she is under a considerable disadvantage.  She is assisted by an interpreter today and has a neighbour to assist her, but it is very hard for her to deal with the issues.

6. In the substantive proceedings I was not able to make findings in relation to the wealth of the husband’s brother, H Liao, or the value of C Pty Ltd.  I commented in the judgment that the documents that I was provided made no sense in relation to C Pty Ltd. H Liao was not required to make a disclosure of his own wealth.  As to the wife she is entitled under the orders I made to receive $75,000 from the husband as part of her property settlement and all of the proceeds of sale of the D property.  The wife thinks that the D property is worth $575,000. It had a value of $1,150,000 in the substantive proceedings and to be fair, the wife says that one half of the interest is $575,000.  I do not know why she has only referred to one half as under the orders she is entitled to all of it.  The property is encumbered and as at the date of the hearing she owes $750,000.

7. The wife has a nominal amount in the bank, a modest motor vehicle, some household contents, modest superannuation of $12,000. She owes YZ $20,000 and C Chang $50,000, and some solicitors $1920. She has an income of $638 a week made up of various forms, accommodation clients, wages, parenting payments and outgoings of $1584 a week.  

8. The wife has been wholly unsuccessful against H Liao and C Pty Ltd.  There is nothing about the conduct of the proceedings that comes to attention.  I do not know of any offers of settlement under section 117C or otherwise in writing between the second and third respondents and the wife.  There has been no breach of court orders.  The wife says that this is unfair because - and I think the evidence supports the fact that, in effect, she relied on something that her husband deposed to that turned out not to be accepted by the court. 

9. She suspects, and she said something like, there was some sort of cooperation between the brothers, H Liao and K Liao.  I did not make a finding to that effect that I can recall and it is an available inference to be made, but that is very different to being able to prove something. 

10. So on the face of it, the wife sought orders against H Liao and C Pty Ltd and those applications were wholly unsuccessful. In terms of conduct, H Liao was a very poor witness and the records of C Pty Ltd were in a poor state. That does not preclude some indemnity for their costs. It is appropriate that there be an order.  The claim is for just over $35,000. The hourly rate is a bit over the rate provided for in the rules. The scale of counsel’s fees are well within the provision of the rules.

11. I am going to make an assessment as I do not want to put the parties to proceedings before a taxing officer.  I am going to fix the costs at $30,000.  As to the time to pay, I note that there is no available fund.  The possibilities are that the wife might receive the payments that she is to receive by way of property settlement.  They cone in two tranches: $75,000 from her husband through her solicitor, and the net proceeds of sale of the home. I will contemplate each of those events.

12. In the event that there is a sale of the home I will vary the orders to give the second and third respondents priority and require that notice be given to their attorneys in relation to settlement so that they can keep an eye on things.  In default of that the payment can be made out of the $75,000, if it is paid. In any event the payment is to be made within six months.

13. There is an application for the costs of today.  These are remarkable proceedings.  They have been proceedings complicated for reasons associated with the relationship between the husband and his brother. The proceedings were extended to some extent because of problems of evidence and it seems to me that I should make no order in relation to the costs of these proceedings.

14. I note for the purposes of the wife securing further legal advice that the character of the payment referred to in order 1 made on 17 July 2009 is property settlement and not costs as between the wife and the husband. The latter issue has yet to be agitated by either party.

I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of Judicial Registrar Loughnan.

Associate: 

Date:  12 October 2009