Chen & Tan (No 2)
[2012] FamCA 796
FAMILY COURT OF AUSTRALIA
| CHEN & TAN (NO. 2) | [2012] FamCA 796 |
| FAMILY LAW – COSTS – Applicable principles for costs Orders relating to forum proceedings – Power under which costs can be ordered FAMILY LAW – COSTS – Principles for indemnity costs Orders – whether an indemnity costs Order was appropriate in this case |
| Civil Proceedings Act 2011 (Qld) Family Law Act 1975 (Cth) Judiciary Act 1903 (Cth) Supreme Court Act 1995 (Qld) |
| Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 Skinner v Alfonso-Skinner (Costs) (2010) FamCA 1108 Yeo & Huy (Costs) [2012] FamCA 758 |
| APPLICANT: | Ms Chen |
| RESPONDENT: | Mr Tan |
| FILE NUMBER: | BRC | 7088 | of | 2011 |
| DATE DELIVERED: | 19 September 2012 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Chambers |
| JUDGMENT OF: | Kent J |
| SUBMISSONS RECEIVED: | Respondent: 16 and 28 May 2012 Applicant: 17 May 2012 and 8 June 2012 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms McLennan |
| SOLICITOR FOR THE APPLICANT: | Dante Chen Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Kirk SC |
| SOLICITOR FOR THE RESPONDENT: | Dixie Ann Middleton & Associates |
Orders
The Husband pay the Wife’s costs of and incidental to the Husband’s application for a permanent stay of the Wife’s application on a party and party basis, with costs to be agreed and, failing agreement, to be assessed and taxed.
Paragraph 1 of these Orders is stayed pending the outcome of the Husband’s Notice of Appeal filed 9 May 2012. Should the Husband’s appeal be discontinued or dismissed, then paragraph 1 is to be re-enlivened from the date of dismissal or discontinuance. Should the Husband’s appeal be successful, the stay of paragraph 1 of these Orders is to be permanent.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Chen & Tan has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: BRC 7088 of 2011
| Ms Chen |
Applicant
And
| Mr Tan |
Respondent
REASONS FOR JUDGMENT
Introduction
On 12 April 2012 I made Orders and delivered reasons for judgment dismissing the Husband’s application for a permanent stay of the Wife’s proceedings for financial relief under Part VIII of the Family Law Act 1975 (Cth) (“the Act”) filed in Australia. I further ordered that the parties be at liberty to apply to this Court regarding an Order for the costs of and incidental to that application. Such Order provided that in the event that the parties are unable to agree in writing within 21 days of the Order as to costs, each party was to file written submissions in respect of that issue within a further 14 days (that is, by 17 May 2012).
Both parties complied with this Order, with the Husband filing written costs submissions on 16 May 2012 and the Wife doing likewise on 17 May 2012. Then, despite acknowledging that the Orders referred to above made no provision for the filing of submissions in reply, the Husband nonetheless filed further submissions as to costs on 28 May 2012, resulting in yet further submissions in reply being filed on behalf of the Wife on 8 June 2012.
I grant retrospectively an extension of time for the filing of submissions in reply as, unfortunately, given the proximity in time within which the Wife’s and the Husband’s submissions were filed, neither deals fully with the issues raised in the other and thus some submissions in reply are required to afford natural justice to the parties.
The Husband’s submissions seek, in essence, that any Order as to the costs of the interim forum hearing referred to above be reserved pending the outcome of the Husband’s appeal of those Orders, which is currently proceeding towards a hearing in the Full Court of this Court. The Husband alternatively submits that if the Court were to make a costs Order in favour of the Wife, the recovery of any costs ought be stayed pending the outcome of the appeal. I note that these submissions contrast significantly with the Orders sought by the Husband in his Response to an Initiating Application filed on 1 November 2011 (which formed the basis of his application for a permanent stay of any Australian property proceedings between himself and the Wife), which included an Order that the Wife pay the Husband’s costs of and incidental to that application on an indemnity basis.
The Wife, by contrast, submits that this Court ought make an Order that the Husband pay the Wife’s costs of and incidental to the interim hearing on forum on an indemnity basis in the amount of $58,939.17. In support of those Orders, the solicitor for the Wife filed an affidavit on 17 May 2012 outlining the Wife’s costs to date and attaching correspondence from the Husband’s solicitor dated 11 April 2012 whereby the Husband still sought to claim his costs from the Wife on an indemnity basis.
Background
By an Initiating Application filed on 15 August 2011, the Wife sought final property Orders against the Husband. The Husband, by way of his Response filed 1 November 2011, sought that the Wife’s application be permanently stayed on the basis that Australia was a clearly inappropriate forum in which to hear the parties’ property dispute.
The Husband’s submissions, in brief, were that given the parties’ Taiwanese citizenship (the Husband having dual Taiwanese-Australian citizenship) and the fact that they had conducted the entirety of their brief relationship (including the conception and birth of their only child) in Taiwan, the Australian proceedings instituted by the Wife should be permanently stayed, with any consequent dispute to be determined by the Courts in Taiwan.
The Wife’s submissions revolved around the contention that despite the factors put forward by the Husband connecting the dispute to Taiwan, there were nonetheless substantial connecting factors between the parties’ dispute and Australia which warranted the conclusion Australia was not a clearly inappropriate forum for the Wife’s proceedings here.
On 12 April 2012, I handed down my reasons for judgment which, in summary, made the following findings in dismissing the Father’s application for a stay:
·the threshold test of whether Australia is a “clearly inappropriate forum” had not been met;
·the ties between the case and Australia were real and valid; and
·There was not such an absence of connection as to render this Court a “clearly inappropriate” form in which to litigate this dispute.
The Appropriate Costs Power in Forum Cases
It is uncontroversial that the principles which generally guide applications as to costs are contained within s 117 of the Family Law Act 1975 (Cth) (“the Act”). However, it is submitted on behalf of the Husband that, should any costs Order be made (which he rejects), the particular conditions of this case render s 117 inapplicable. Rather, the Husband submits that the approach to be taken in relation to the ordering of costs in a forum dispute should be that set out by Murphy J in the case of Skinner v Alfonso-Skinner (Costs) (2010) FamCA 1108 (“Skinner”). The Wife, in the submissions in reply filed on her behalf on 8 June 2012, rejects this submission and submits that s 117 of the Act is in fact applicable to this case as the Wife’s Initiating Application was commenced under the Act.
In Skinner (which was determined in the context of the parties agreeing that s 117 was inapplicable to a costs application in relation to a forum hearing), his Honour reviewed the relevant authorities and found that s 117 was only applicable, as its terms indicate, to applications made, “…in proceedings under this Act…” Specifically, Murphy J held at [20]-[22]:
20. Thus, it is submitted, where the jurisdiction exercised by the Court is accrued equitable jurisdiction (or, indeed, the Court’s implied jurisdiction – CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345 at 391-392), proceedings referenced to that jurisdiction are not proceedings “under the Act”.
21. That conclusion is reinforced, it is argued, by the determination of the Full Court of this Court that the Court has no statutory power (ie no power “under the Act”) to stay proceedings in favour of a foreign court; rather it has an implied power to do so (see In the Marriage of B [2003] FLC 93-136, par 51-57; EGK v TSL [2006] FLC 93-297, par 83(i) and (ii)).
22. I agree with the submission just outlined and that the concession by counsel for the husband is properly made. I conclude that the power to award costs in respect of the instant proceedings does not lie pursuant to the Act (and, specifically, s 117). If such a power exists, it needs to be found elsewhere.
In that case, as here,[1] the forum dispute concerned proceedings commenced under the Act via an Initiating Application in this Court (as well as an Application for Divorce in the Federal Magistrates Court and a Petition for the Dissolution of Marriage filed in the Family Court of First Instance in Madrid, Spain). I do not find that the mere fact that the forum dispute concerned the potential staying of proceedings commenced under the Act renders the interim hearing conducted before me in this matter a ‘proceeding under the Act’. Proceedings which dispute as to whether Australia is a clearly inappropriate forum are not regulated by the Act; rather, they arise either as part of this Court’s equitable accrued jurisdiction or its inherent jurisdiction as a Court of superior record to regulate the proceedings before it.
[1] See the substantive judgment of Murphy J in this matter: Skinner & Alfonso-Skinner [2010] FamCA 329.
The Wife submitted that, in the event that I made such a finding, I should turn to s 79(1) of the Judiciary Act 1903 (Cth), which provides that in the event of a lack of Commonwealth legislation as to procedure, a federal Court is to turn to the applicable State legislation (which the Wife submits in this case is the Supreme Court Act 1995 (Qld)). His Honour Justice Murphy agreed with this approach in his recent decision of Yeo & Huy (Costs) [2012] FamCA 758, in which he held:
9. In short summary, the reason for that is that proceedings for stay are an exercise by the Court of its accrued equitable jurisdiction or its implied jurisdiction (see CSR Ltd v Cigna, above at 391-392), and are not proceedings “under the Act”. Section 117, which contains the Court’s power to order costs, refers to proceedings “under the Act”. In a case of this type, the source of the Court’s power to award costs is s 79(1) of the Judiciary Act 1903 (Cth) and, relevantly, s 221 of the Supreme Court Act 1995 (Qld) (noting that the Civil Proceedings Act 2011 (Qld) which repeals that Act has not yet commenced operation in relevant respects). The former Act provides:
(1) The laws of each State or Territory, including the laws relating to procedure, evidence, and the competency of witnesses, shall, except as otherwise provided by the constitution or the laws of the Commonwealth, be binding on all courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable.
10. Section 221 of the Supreme Court Act 1995 (Qld) provides:
The Supreme Court shall have power to award costs in all cases brought before it and not provided for otherwise by this section.
11. Uniform Civil Procedure Rules 1999 (Qld) (“UCPR”) 681(1) provides:
Costs of a proceeding, including an application in a proceeding, are in the discretion of the court that follow the event, unless the court otherwise orders.
12. By reference to s 79(1) of the Judiciary Act 1903 (Cth), s 221 of the Supreme Court Act 1995 and the UCPR are “binding” on this Court, it being a court exercising Federal jurisdiction in Queensland and rendered applicable by reason of the non-application of s 117 of the Act.
13. In my view, then, the applicable legislation provides that costs should follow the event unless I order otherwise by reference to the discretion granted by the section. It follows that, in my view, the specific factors enumerated in s 117(2A) of the Act are not, in terms, the provisions which govern the exercise of any costs discretion applicable in this case. As will be appreciated, however, consideration of the type there enumerated may also inform the discretion conferred by s 221 of the Supreme Court Act and r 681, UCPR.
In those circumstances, I agree with the reasoning of his Honour Justice Murphy as to the source of this Court’s power to award costs in this case. I further note that the new Civil Proceedings Act 2011 (Qld) had not yet entered into force at the time of the filing of the final submissions of each of the parties in this matter. In that event, both the Wife and the Husband’s submissions as to the correct approach to be taken under s 117 assist only as to whether the general rule that costs follow the event ought be followed.
Is a Costs Order Appropriate?
Given that the Husband was wholly unsuccessful in his application to have the Wife’s application permanently stayed, the effect of r 681 of the UCPR is that the onus is upon the Husband to demonstrate why an Order for costs ought not be made against him.
It is submitted on behalf of the Husband that a costs Order is inappropriate in this case as, “The application made by the Husband was clearly justified in these circumstances…” such circumstances being:
(i) the parties married in Taiwan in May 2008 and lived there (with their child born in October 2008) throughout their relationship until separation in July 2011;
(ii) that within 19 days of separation, the Wife, who had never previously set foot in Australia, commences property proceedings here;
(iii) that proceedings in respect of the divorce, the child and property were commenced by the Husband in the Taiwan Courts in September 2011 and interim child orders were made shortly thereafter.
However, this fails to take into account my findings that despite such connections to Taiwan, the Husband has significant financial connections to Australia about which he gave contradictory and inconsistent evidence in his affidavit material which painted a misleading picture as to the nature of his connections to Australia. Given the detail contained in my reasons for judgment handed down on 12 April 2012, I need not repeat those findings here. Suffice to say, by way of summary, that although I found that there were some factors which prima facie connected the matter to Taiwan, including those listed by the Husband above, a closer analysis of the evidence revealed that the Husband’s financial and familial integration with Australia, including his declared future plans to raise the only child of the relationship in Australia, was such that Australia was not a clearly inappropriate forum for the property settlement dispute between the parties.
In those circumstances, I find that a costs Order is appropriate and that the Husband has not demonstrated that the general rule that costs should follow the event should not apply to the interim hearing before me in January of this year. However, I reject the submission of the Wife that such an Order ought be one for indemnity costs.
In Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 (a case upon which the Wife relies in her written submissions), Sheppard J, after a review of the relevant authorities, set out the relevant principles relating to indemnity costs orders at pp 256-257:
4. In consequence of the settled practice which exists, the court ought not usually make an order for the payment of costs on some basis other than the party and party basis. The circumstance of the case must be such as to warrant the court in departing from the usual course. That has been the view of all judges dealing with applications for payment of costs on the indemnity or some other basis whether here or in England. The tests have been variously put. The Court of Appeal in Andrews v Barnes (39 Ch D at 141) said the court had a general and discretionary power to award costs as between solicitor and client ‘ ‘(sic) as and when the justice of the case might so require”. Woodward J in Fountain Selected Meats appears to have adopted what was said by Brandon LJ (as he was) in Preston v Preston ([1982] 1 All ER at 58) namely, there should be some special or unusual feature in the case to justify the cou rt (sic) in departing from the ordinary practice. Most judges dealing with the problem have resolved the particular case before them by dealing with the circumstances of that case and finding in it the presence or absence of factors which would be capable, if they existed, of warranting a departure from the usual rule. But as French J said (at 8) in Tetijo: ‘ ‘(sic) the categories in which the discre tion (sic) may be exercised are not closed”. Davies J expressed (at 6) similar views in Ragata.
5. Notwithstanding the fact that that is so, it is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion. I instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud (both referred to by Woodward J in Fountain and also by Gummow J in Thors v Weekes (1989) 92 ALR 131 at 152; evidence of particular misconduct that causes loss of time to the court and to other parties (French J in Tetijo); the fact that the proceedings were commenced or continued for some ulterior motive (Davies J in Regata) or in wilful disregard of known facts or clearly established law (Woodward J in Fountain and French J in J-Corp); the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (Davies J in Ragata); an imprudent refusal of an offer to compromise (eg Messiter v Hutchinson (1987) 10 NSWLR 525; Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at 724(Court of Appeal); Crisp v Kent (SC(NSW)(CA) (sic), 27 Sept 1993, unreported) and an award of costs on an indemnity basis against a contemnor (eg Megarry V-C in EMI Records). Other categories of cases are to be found in the reports. Yet others to arise in the future will have different features about them which may justify an order for costs on the indemnity basis. The question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for payment of costs other than on a party and party basis.
6. It remains to say that the existence of particular facts and circumstances capable of warranting the making of an order for payment of costs, for instance, on the indemnity basis, does not mean that judges are necessarily obliged to exercise their discretion to make such an order. The costs are always in the discretion of the trial judge. Provided that discretion is exercised having regard to the applicable principles and the particular circumstances of the instant case its exercise will not be found to have miscarried unless it appears that the order which has been made involves a manifest error or injustice.
(emphasis added)
Although I made findings in my reasons for judgment handed down on 12 April 2012 as to the existence of gaps in the information provided by the Husband and the misleading nature of some of his evidence, I do not find that, at this interim stage, the Husband’s conduct has yet reached the point that it constitutes some, “…special or unusual feature in the case to justify the court in departing from the ordinary practice.” It is well-established that, at an interim hearing, a trial Judge is not in a position to making concluded findings of fact in relation to disputed issues. Thus, whilst I noted the inconsistencies and gaps in the Husband’s evidence relied upon at the forum hearing, I cannot find, on the basis of an interim hearing, that such conduct was deliberately aimed at obfuscating the Court or was of such a kind as to warrant costs being awarded on an indemnity basis. Consequently, I do not find that an indemnity costs Order is appropriate.
It is the Husband’s submission that, in the event that I found that a costs Order was appropriate, such an Order ought be stayed pending the outcome of the appeal. I accept this submission.
A costs Order in this particular case is based largely upon the Husband being wholly unsuccessful in his application to have the Wife’s application for property Orders permanently stayed. Should that decision be overturned on appeal, that foundation would be removed. Therefore, I propose to make Orders in such a form that the costs Order I have contemplated above will only activate should the Husband’s appeal be unsuccessful or be discontinued.
I therefore make Orders as set out at the commencement of these reasons.
I certify that the preceding twenty-three (23) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Kent delivered on 19 September 2012.
Associate:
Date: 19 September 2012
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