Drasha and Gani
[2017] FamCA 1097
•22 December 2017
FAMILY COURT OF AUSTRALIA
| DRASHA & GANI | [2017] FamCA 1097 |
| FAMILY LAW – COSTS – Where wife seeks husband pay her costs on an indemnity basis or as assessed by the Registrar – Where husband’s application for declaration of nullity of marriage was wholly unsuccessful – Where husband brought proceedings in disregard of clearly established law – Where costs ordered on an indemnity basis – Where costs to be assessed by Registrar – Husband’s response to application in a case dismissed. |
| Marriage Act 1985 (Cth) s 23B Family Law Act 1975 (Cth) ss 70NFB, 117, 117AA, 117AC, 118 Family Law Rules 2004 (Cth) rr 19.08,19.18 |
| Gani & Drasha [2017] FamCA 475 Yunghanns & Ors & Yunghanns (2000) FLC 93-029 Colgate-Palmolive Company & Colgate-Palmolive Pty Ltd v Cussons Pty Ltd (1993) FCR 225 Kohan & Kohan (1993) FLC 92-340 Muldoon & Carlyle (2012) FLC 93-513 Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd [1988] FCA 364 J Corp Pty Ltd v Australian Building Labourers Federation Union of Workers (WA Branch)(No 2) [1993] FCA 42 Z (A Solicitor) v Limousin (Costs) [2010] FLC 93-433 Deniz & Deniz (1977) FLC 90-252 |
| APPLICANT: | Ms Drasha |
| RESPONDENT: | Mr Gani |
| FILE NUMBER: | MLC | 7387 | of | 2015 |
| DATE DELIVERED: | 22 December 2017 |
| PLACE DELIVERED: | In Chambers |
| PLACE HEARD: | In Chambers |
| JUDGMENT OF: | Tree J |
| HEARING DATE: | Last submissions 11 October 2017 |
REPRESENTATION
| SOLICITORS FOR THE APPLICANT: | Cornish Lawyers |
| THE RESPONDENT: | In person |
Orders
That the husband pays the wife’s costs of and incidental to his Application filed 30 January 2017, and the wife’s Application in a Case filed 15 August 2017, on an indemnity basis as assessed by a Registrar.
Otherwise the wife’s Amended Application in a Case filed 29 August 2017, and the husband’s Response to an Application in a Case filed 7 September 2017, are 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 Drasha & Gani 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 CAIRNS IN CHAMBERS |
FILE NUMBER: MLC7387/2015
| Ms Drasha |
Applicant
And
| Mr Gani |
Respondent
REASONS FOR JUDGMENT
INTRODUCTION
For reasons delivered 7 July 2017, I dismissed the Initiating Application which Mr Gani (“the husband”) had filed on 30 January 2017: Gani & Drasha [2017] FamCA 475. In that Initiating Application, the husband sought an order that the marriage solemnised between himself and Ms Drasha (“the wife”) in Australia on 1 March 2008, be declared void on the grounds that it was procured by fraud. However I determined that the use of the word “fraud” in s 23B of the Marriage Act 1985 (Cth) was only as to the identity of the other party or as to the nature of the ceremony, which was not established on the evidence before me.
By Amended Application in a Case filed 29 August 2017, the wife seeks an order that the husband pay her costs on an indemnity basis in the total of $31,091.03, or alternatively, as assessed by a Registrar. By Response filed 7 September 2017, the husband sought the following relief (in original):
1.The cost application be dismissed due to non-compliance and breach of marriage laws in Australia;
2.The applicant be referred to the relevant authorities for breach of marriage laws in Australia and concealment of the marriage held overseas;
3.I seek suitable compensation as deemed appropriate by the Court for suffering an economic loss due to Ms Drasha’s reckless and repeatedly false statements that I relied upon.
Pursuant to orders which I pronounced on 24 August 2017, the resolution of the wife’s costs application proceeded by way of written submissions, with my decision standing reserved upon the receipt of the wife’s submissions in reply.
This is my decision and the reasons for it in relation to the wife’s application.
BACKGROUND FACTS
The background facts are adequately contained in my reasons of 7 July 2017, which I incorporate in these reasons.
RELEVANT STATUTORY PROVISIONS AND LEGAL PRINCIPLES
Costs orders generally
The starting point for a consideration of these applications is s117 of the Family Law Act which relevantly provides as follows:
117(1) Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AC and 118 each party to proceedings under this Act shall bear his or her own costs.
117(2) If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
117(2A) In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(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, inspection, 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.
…
It is also relevant to note s118 which provides as follows:
118 The court may, at any stage of proceedings under this Act, if it is satisfied that the proceedings are frivolous or vexatious:
(a)dismiss the proceedings; and
(b)make such order as to costs as the court considers just.
Rule 19.08(3) imposes a mandatory obligation in the following terms:
A party applying for an order for costs on an indemnity basis must inform the Court if the party is bound by a Costs Agreement in relation to those costs and, if so, the terms of the Costs Agreement.
Rule 19.18 deals with the method of calculation of costs in the following terms:
19.18(1) The court may order that a party is entitled to costs:
(a)of a specific amount;
(b)as assessed on a particular basis (eg lawyer and client, party/party or indemnity);
(c)to be calculated in accordance with the method stated in the order; or
(d)for part of the case, or part of an amount assessed in accordance with Schedule 3.
Example
For paragraph (1)(c), the stated method may be in accordance with Schedule 3 but with an additional percentage for complexity.
19.18(2) If costs are payable under the Act or these Rules, or the court orders that costs be paid and does not specify the method for their calculation, the costs are to be assessed on a party/party basis.
19.18(3) In making an order under subrule (1), the court may consider:
(a) the importance, complexity or difficulty of the issues;
(b) the reasonableness of each party’s behaviour in the case;
(c) the rates ordinarily payable to lawyers in comparable cases;
(d) whether a lawyer’s conduct has been improper or unreasonable;
(e)the time properly spent on the case, or in complying with pre-action procedures; and
(f)expenses properly paid or payable.
Principles relating to indemnity costs
In order to justify the making of an order for costs on other than a party/party basis, all that is required are particular facts and circumstances of the case in question warranting the making of such an order.[1] That said, such an order is a very great departure from the normal standard, and hence it is imperative that the court be aware of what the nature of the indemnity is, in the sense of what the costs agreement between the parties seeking the order in their solicitors is.[2] That said, such an order remains wholly compensatory and not punitive.[3]
[1]Yunghanns & Ors & Yunghanns (2000) FLC 93-029 adopting Sheppard J in Colgate-Palmolive Company & Colgate-Palmolive Pty Ltd v Cussons Pty Ltd (1993) FCR 225.
[2]See Kohan & Kohan (1993) FLC 92-340 and FLR 19.08(3).
[3]See Muldoon & Carlyle (2012) FLC 93-513 at [115].
It is well established that proceedings brought in wilful disregard of known facts or clearly established law are one of the established categories which justify indemnity costs.[4] An instance of that in this court is the decision of Limousin[5] where the Full Court did not disturb a costs order against a solicitor who had failed to have any proper regard to the prospects of success of a claim.
[4]Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd [1988] FCA 364; J Corp Pty Ltd v Australian Building Labourers Federation Union of Workers (WA Branch)(No 2) [1993] FCA 42; Colgate-Palmolive (supra and Yunghanns (supra).
[5]Z (A Solicitor) v Limousin (Costs) [2010] FLC 93-433.
SHOULD THERE BE A COSTS ORDER AGAINST THE HUSBAND
By reference to the matters enumerated in s 117(2A) I note as follows.
Both parties are in employment and have assets of some substance under their control. Specifically the husband is employed by E Bank and earns an income of around $105,344.00 per annum, and, pursuant to orders of Judge Harland, is entitled to 37.5 per cent of the net asset pool of the parties, which pool is said to be worth $760,165.00.
For her part the wife is employed in the community sector and earns $73,000.00 per annum. She is to receive 62.5 per cent of the parties’ net asset pool.
Neither party in these proceedings were in receipt of Legal Aid.
Before me the husband self-represented. It cannot be said that his conduct in the proceedings unduly increased the burden, or the length, of the hearing, and particularly I note that he did not seek to cross-examine the wife, which probably led to the proceedings being able to be concluded in a shorter time frame than they otherwise would have.
The proceedings were not necessitated by the failure of a party to comply with previous orders of the court, but rather came about in consequence, it seems, of the husband seeking to allege, in divorce proceedings, that the parties were never married, as he contended that the marriage was a nullity.
The husband has been wholly unsuccessful in his application.
I have no evidence of any offer to settle the proceedings on terms better than the ultimate outcome.
The wife contends that there are a number of other matters relevant to costs. Particularly she says that the husband’s motives in filing the application were more than a simple desire for the marriage to be recognised as void, and particularly that it was part of a scheme to try and obtain financial compensation from the wife for her alleged fraud. Further it is said that the husband’s additional motive was to ultimately have the wife charged with some species of criminal offence, and indeed that appears to be correct.
Weighing all of those matters in the balance, I am satisfied that the usual rule in relation to costs is displaced, and there should be an order that the husband pay the wife’s costs.
SHOULD THE HUSBAND PAY COSTS ON AN INDEMNITY BASIS
As I observed at [24] of my reasons of 7 July 2017, the authorities clearly established that the use of the word “fraud” in s 23B of the Marriage Act was only as to the identity of the other party or as to the nature of the ceremony. I noted that although there was one old authority (Deniz & Deniz (1977) FLC 90-252) to the contrary, it did not represent current or good law. Therefore, notwithstanding the fact that the father self-represented, the proceeding which he brought was in disregard of clearly established law, and I am satisfied that commencing proceedings in those circumstances does enliven one of the established categories which justifies indemnity costs.
The wife relies upon other circumstances as justifying indemnity costs. Particularly she says, via the affidavit of Ms Cornish filed 15 August 2017, at [32](g):
The wife was required to engage lawyers and incur costs not only on the basis of defending the proceedings but in light of the serious ramifications as threatened/requested by the husband in his Application. Special care and attention was required as the husband sought that criminal charges be laid against the wife for many findings made by the Family Court. Accordingly the proceedings were elevated beyond normal family law proceedings.
I accept that submission.
Further, she says the husband has the capacity to pay costs on an indemnity basis.
I am satisfied that the husband’s application was always, as a matter of law, doomed to fail. It should not have been brought. It appears to have been part of a much broader strategy of his, and he was intent on obtaining some tactical leverage elsewhere from any finding of a nullity by this court.
Perhaps an application for summary dismissal could have been made by the wife under s 118, and hence obviated the need for a trial, however I do not place much weight on that, as the husband’s argument advanced by his application was rather opaque, and only clarified during the hearing before me.
In all of those circumstances I am satisfied that there should be an order for indemnity costs.
SHOULD THE COSTS REQUIRE ASSESSMENT
The amount claimed of $31,091.03 seems high, considering that ultimately the wife was successful on a point of law, which was clearly established by the authorities. Moreover, the trial lasted only one day, and the material in it was not particularly voluminous. However I accept that different cities in Australia seem to have markedly divergent cost cultures in relation to family law litigation, and hence my impression may not be reasonable for Melbourne matters.
I am satisfied that in order to afford the husband an opportunity to argue that some part of the work was not properly incurred, even on an indemnity basis, that the matter should be assessed by a Registrar, and I will so order.
THE HUSBAND’S CLAIM FOR OTHER RELIEF
Since on 7 July 2017 I dismissed the husband’s Initiating Application, the only matter left to be resolved is costs. The matters raised by the husband’s Response extend well beyond costs, and there is no basis for me entertaining such claims, given that there are no primary proceedings on foot. The husband’s Response to an Application in a Case will be dismissed.
CONCLUSION
For these reasons there will be orders as set out at the commencement of this judgment.
I certify that the preceding thirty-one (31) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Tree delivered on 22 December 2017.
Associate:
Date: 22 December 2017
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