DING & DING

[2018] FamCA 1143

FAMILY COURT OF AUSTRALIA

DING & DING [2018] FamCA 1143

FAMILY LAW – COSTS – where the trial results in dismissal of wife’s application after years of litigation-where despite concerns about her conduct of the proceedings, the overwhelming factor is the financial circumstances-where an order for costs cannot be justified.

Family Law Act 1975 (Cth)

Collins and Collins (1985) FLC 91-603
I and I (No 2) (1995) FLC 92-625
Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72
Prantage & Prantage (2013) FLC 93-544

APPLICANT: Mr Ding

RESPONDENT: Ms Ding

FILE NUMBER: ADC 4389 of 2012

DATE DELIVERED: 26 March 2018

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: By way of written submissions

SUBMISSIONS RECEIVED FROM

SOLICITOR FOR THE APPLICANT: Jaak Oks Lawyers

SOLICITOR FOR THE RESPONDENT: Harry Alevizos

Orders

1. That the application of the husband filed 28 November 2017 and the response of the wife filed 7 February 2018 are both dismissed.

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 Ding & Ding 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 MELBOURNE

FILE NUMBER: ADC 4389  of 2012

MR DING

Applicant

And

MS DING

Respondent

REASONS FOR JUDGMENT

1. Mr Ding (the husband) seeks costs against his former wife Ms Ding (the wife). The wife opposes the application.

2. The substantive proceedings concerned a property dispute between the husband and the wife in which the wife was the applicant. She was unsuccessful. She also unsuccessfully sought periodic spousal maintenance and I made final orders on 1 November 2017 dismissing all extant applications.

3. Rule 19.08 of the Family Law Rules 2004 provides that a party may apply for a costs’ order, relevantly here, by filing an Application in a Case within 28 days after the final order is made. That application was filed by the husband on 28 November 2017.

4. The costs’ application was listed before me but it seems that the solicitor for the wife overlooked it. Sensibly, agreement was reached that the application be adjourned to allow the wife to deal with the matter properly. Rather than add to the costs’ burden, I ordered that the parties deal with the matter by written submission and ordered I would deal with it in chambers. That is what occurred.

5. I now have the written submission of the husband filed 22 February 2018 and of the wife filed 7 March 2018.

6. The husband’s 11 page submission says:

   ·The matter had a lengthy history with various changes of respondents and proposed orders;

   ·During the lengthy course of the proceedings, the wife made late applications for the admission of evidence and then a recusal application almost at the end of the trial upon the determination of an interlocutory matter;

   ·The wife’s unsuccessful case revolved around allegations of the husband divesting himself of property interests and that some property was held on trust for the husband;

   ·In the alternative and also unsuccessful, it was the wife’s case that various transactions should be set aside; and

   ·That the nub of the wife’s case was that some of these transactions occurred when the marriage relationship was in trouble thereby supporting a conclusion that the husband’s motive was to defeat her claim.

7. The husband’s submission dealt with a synopsis of each of the claims against the relevant assets and then the findings made including the spousal maintenance.

8. It was submitted that:

   (a)the financial circumstances of the parties were modest;

   (b)In terms of the conduct of the proceedings, there was a lack of attempt by the wife to conduct proper discovery and she called no evidence other than an accountant valuer but that related to an asset in which the husband had a modest interest. As such, her case was based on an attack on the credibility and motives of the husband and his witnesses; and

   (c)The wife had been wholly unsuccessful.

9. Thus, it was submitted that the wife’s application was doomed to fail and she had “simply chosen to ‘fly a kite’”.

10. Subsequent to the final orders and delivery of judgment, the wife lodged notice of appeal. That appeal is pending.

11. The wife’s submission began by seeking that the costs’ application be adjourned to “abide” the decision of the Full Court. There is some attraction to that because if the orders made in November are set aside, it is conceivable that the husband would be said to have been unsuccessful and the parties may have to start again. However, it might also be said that even though the appeal could be successful, the husband might be entitled to costs by virtue of the way the trial was run by the wife. It might further be said that if the wife was unsuccessful on the appeal and the costs’ application was not determined until after that appeal, there might have to be another appeal over any costs’ order. On balance, I consider it better that the Full Court have the opportunity to deal with all issues including any costs’ determination.

12. The wife’s submission was then pleaded in the alternative by reference to s 117 of the Act the nub of which focused on her financial position alone. It did not address the more fundamental questions of the submissions of the husband about the way she conducted her case nor about whether there was some justifying feature that would entitle the Court to depart from s 117. I was therefore not assisted by the alternative position put.

13. I agree with the submission of the husband that there was a lack of attempt by the wife to conduct proper discovery and I made that statement in the reasons. The wife’s approach was perplexing but I am conscious that English was her second language (she required an interpreter throughout) and her approach to the litigation both in this Court and in separate proceedings in the South Australian District Court was very much under the control of her advisors. It had to be that way having regard to her background, language and skills. By occupation, she is a part time therapist and for some part of the relationship she was engaged in undertaking English language courses at a local college. It is not appropriate in my view to blame her for any lack of prudence even if she had given instructions to “fly a kite”. That is particularly so here when she had participated in the proceedings in the District Court and therefore must have known what the husband and his family were going to say. Her conduct of the family law litigation was over a long period of time punctuated by the District Court litigation. Because of the complexity of the issues about which I was asked to make a determination, I do not accept that the wife alone was responsible for the conduct of the proceedings in assessing whether there is a justifying circumstance to depart from the fundamental principle that each party pay their own costs.

14. There is little dispute that the parties’ financial circumstances are modest. Nothing from the evidence would indicate that the wife’s earning capacity would reach even the limited heights that the husband currently has with his tertiary skills. One issue of contention in the proceedings, and in the District Court, was that the wife had taken money from the relevant pharmacy but no evidence was presented to show that the wife still had that money. Thus, from both a capital and an income perspective, the difference between the parties was insignificant.

15. It is correct to say that the wife’s case was based on an attack on the credibility and motives of the husband and his witnesses but largely without discovery. Much of the cross-examination, which took up time focused on credit and in that regard, the cross-examiner was largely bound by the answers given. Thus again, the wife’s unusual circumstances as I have described earlier, could only partially be the foundation for a finding of conduct in relation to the running of the litigation.

16. In a simple submission, counsel for the wife said that the husband as a result of the judgment had “retained the entire asset pool”. To the extent that the husband had very few assets (and this was not addressed by the wife), that was correct. To the extent that the submission was meant to say that the husband kept the assets that the wife was seeking, and which I found belonged to the family, the submission was inappropriate.

17. Both parties addressed the essential provision which is subsection 117(1) of the Act. It provides that subject to subsection 117(2), each party to proceedings shall bear his or her own costs. Subsections 117(2) and 117(2A) provide that if the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to some matters not presently relevant, make such order as to costs considered just.

18. So too, the provisions of s 117(2A) are not controversial although as can be seen above, how to apply them was. Section 117(2A) refers to what order, if any, should be made if there are justifying circumstances. Section 117(2A) is a mandatory consideration.

19. The discretion conferred by s 117 is “broad” and the factors in s 117(2A) are not to be read in a restrictive way (Collins and Collins (1985) FLC 91-603). Any one of the s 117(2A) factors may be the sole reason for an order although all must be taken into account and balanced to ensure a justification for the order (I and I (No 2) (1995) FLC 92-625).

20. It is also important to remember that, as Murphy J observed in Prantage & Prantage (2013) FLC 93-544, s 117 indicates a very clear legislative intent but s 117(2) adds the discretionary element to enable an award of costs to be made if justice so requires it (see also Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72). Thus, despite any natural inclination to consider that a party who has been wholly unsuccessful, and maybe even “flown a kite”, is still entitled to have the Court consider the legislative provisions before that discretion is exercised.

21. In contemplating alone the justification question here, it is correct to say that I was critical of the wife’s case but the husband also appears not to have taken steps to summarily dismiss the application along the way. The case just seemed to wander and was only the subject of focus when it ultimately got to trial. At that stage, the husband was well prepared and the wife was not but as I have already said, I am not convinced that is a matter that was her responsibility alone. I do not know, and cannot know, whether if discovery had been done comprehensively, the evidence or the outcome would have been different.

22. The perplexing way the wife approached the case required the husband to follow and participate and that alone must be seen as very unusual and justifying a finding that the principle in s 117 should not apply. But when all of the factors in s 117(2A) are considered, I find:

    (a)The financial circumstances of each are modest and the wife cannot afford to pay costs. The husband could not pay his own costs save for the benefit of the support of his family so in that sense, he has a benefit that the wife does not have even if at some unspecified day in the future, he has to repay his family;

    (b)Neither party had the assistance of legal aid funding;

    (c)The conduct in respect of the proceedings has been the subject of comment and I find the wife did not assist the Court or alleviate the need for the husband to participate;

    (d)The wife has been wholly unsuccessful; and

    (e)No offers have been mentioned.

23. I find the most significant factor here is (a) above. I appreciate that impecuniosity is not a basis not to make an order because, apart from not dissuading pointless litigation, judgment debts are good for many years and the present financial circumstances of the wife may change. However, with all of the background here, the latter is unlikely but at least the husband has qualifications to improve his financial lot.

24. I find in the circumstances that an order for costs could not be justified here.

I certify that the preceding Twenty Four (24) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 26 March 2018.

Associate: 

Date:  26 March 2018