El Maalouf and Issa (No 2)
[2020] FamCA 636
•3 August 2020
FAMILY COURT OF AUSTRALIA
| EL MAALOUF & ISSA (NO. 2) | [2020] FamCA 636 |
| FAMILY LAW – COSTS – Where final de facto property orders – Where application for costs made by the wife – Where application for costs made by the husband – Where consideration of applicable principles – Where no circumstances justifying departure from the general rule – Where applications dismissed. |
| Family Law Act 1975 (Cth) s 117 |
| Collins & Collins (1985) FLC 91-603 Penfold v Penfold (1980) 144 CLR 311 |
| APPLICANT: | Ms El Maalouf |
| RESPONDENT: | Mr Issa |
| FILE NUMBER: | PAC | 2389 | of | 2017 |
| DATE DELIVERED: | 3 August 2020 |
| PLACE DELIVERED: | Parramatta |
| PLACE HEARD: | Parramatta |
| JUDGMENT OF: | Foster J |
| HEARING DATE: | By way of written submissions last received on 30 June 2020 |
REPRESENTATION
| SOLICITOR FOR THE APPLICANT: | Adam Jones Solicitor |
| SOLICITOR FOR THE RESPONDENT: | Circle Bridge Legal |
Orders
All applications for costs 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 El Maalouf & Issa 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 PARRAMATTA |
FILE NUMBER: PAC 2389 of 2017
| Ms El Maalouf |
Applicant
And
| Mr Issa |
Respondent
REASONS FOR JUDGMENT
On 14 February 2020 in de facto property proceedings between the applicant wife and respondent husband the Court made final orders as to property adjustment as follows:
(1)That within six months from this date the applicant pay to the respondent the sum of $60,000.
(2)That in default of the sum provided for in Order 1 being paid by the due date, the applicant and respondent sign all necessary documents and do all things necessary to sell the said property at H Street, Suburb J at the best price reasonably available and that from the net proceeds of sale the respondent be paid a sum that would then represent 12.5 per cent of the asset pool for adjustment as set out at [64] of these reasons for judgment.
(3)That the wife do all things necessary to permit the husband or his nominee within one month from this date to collect a motorbike presently in her possession and such items of his clothing and personal effects that she agrees remain in her possession.
Thereafter by Application in a Case filed 13 March 2020 the wife sought an order that the husband pay her costs of and incidental to the proceedings. By way of Amended Application in a Case filed on 10 June 2020 the wife sought, in summary, the following orders:
a)that the third-party costs order made on 4 July 2019 be discharged;
b)that the husband pay to the wife costs fixed in the amount of $24,000 pursuant to section 117 of the Family Law Act 1975 (Cth) (“the Act”),
c)that costs payable to the wife may be received by the wife by way of deduction from monies owing to the husband by the wife pursuant to orders made 14 February 2020.
In support of her application for costs the wife relied upon her affidavit filed 13 March 2020 together with the documents exhibited thereto.
In response to the wife’s application for costs, the husband sought orders:
a)that the wife’s application for costs be dismissed; and
b)that the wife pay the husband’s costs.
The husband relied upon:
a)his affidavit filed 29 May 2020; and
b)the affidavit of his solicitor filed 13 March 2020.
The costs applications were before the Court on 26 May 2020 for directions and the following orders were made:
(1)The mother file and serve written submissions in support of her application for costs as against the father by no later than Tuesday, 9 June 2020.
(2)The father file and serve written submissions in support of his application for costs and in response to the mother’s application for costs by no later than Tuesday, 23 June 2020.
(3)The mother file and serve any written submissions in response to the father’s application for costs by no later than Tuesday, 30 June 2020.
(4)Upon completion of written submissions, judgment be reserved to chambers.
Following final receipt of submissions judgment was reserved on 8 July 2020.
These reasons assume familiarity with the reasons of the Court in the primary application for property adjustment: El Maalouf & Issa [2020] FamCA 76.
Costs
Section 117 of the Act provides that each party to the proceedings shall bear his or her own costs.
That principle is, however, subject to the discretion afforded to the trial judge in subparagraph (2), which provides that if the Court is of the opinion that there are circumstances that justify it in doing so, the Court may, subject to further subsections thereof and the applicable Rules of the Court, make such order as to costs as the Court considers just.
Although s 117(2) requires a finding of justifiable circumstances as an essential preliminary to making an order for costs, there is no additional or special onus on an applicant who seeks an order for costs: Penfold v Penfold (1980) 144 CLR 311.
The matters relevant to determining what order, if any, should be made for costs are set out in subsection (2A) of that section. They are as follows:
(a)the financial circumstances of each of the parties to the proceedings;
(b)whether any party has legal aid and the terms of any grant of aid;
(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 answers, 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.
In Collins & Collins (1985) FLC 91-603 (at 79,877), the Full Court described the discretion conferred by s 117 as being a “broad” one and held that the factors set out in s 117(2A) are not to be read in a restrictive way.
The Full Court in Hawkins & Roe [2012] FamCAFC 77; (2012) 47 Fam LR 526 said:
17.With respect to the application of the section, in Penfold v Penfold (1980) 144 CLR 311, the High Court said at 315 and 316:
1.Sub-section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional or special onus on an applicant for an order for costs. Consequently, with respect to their Honours in the Family Court, we do not agree with the suggestion made in the judgment under appeal that an order can only be made under s. 117 (2) in "a clear case".
2.Sub-section (2) does not in our view as a matter of law require the judge to specify the circumstances which justify the making of an order. It does not expressly say so, and in the context of the making of an order for costs there is no sufficient basis for making an implication. Judges very frequently make orders for costs without giving reasons or making findings, even when costs are in issue. The absence of reasons or findings does not in itself indicate that a judge has erroneously exercised his discretion to award costs, though it will place an appellate court in the position of examining the circumstances and of determining for itself whether the circumstances show that the discretion was erroneously exercised (Kent v Kent). Accordingly, in the absence of some positive legislative indication we should not attribute to Parliament the requirement that a judge must make particular findings in relation to an order for costs.
(footnotes omitted)
18.The weight to be given to a particular consideration under s 117(2A) is a matter for the discretion of the judge. However, in I and I (No 2) (1995) FLC 92-625 the Full Court of this Court held that the relevant matters in s 117(2A) “must all be taken into account and all balanced in order to determine whether the overall circumstances justify the making of an order for costs”. That is not to say that one single matter may not ultimately be determinative. The Full Court confirmed this in Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 Fam LR 123 at paragraph 41:
… A number of factors are then listed in the subparagraphs. The financial circumstances of each of the parties to the proceedings is the first mentioned factor. Nowhere in subs (2A) or elsewhere in s 117, is there any prescription that more than one factor must be present before an order for costs is made nor of comparative weight of the factors set out in subs (2A). As a consequence, there is nothing to prevent any factor being the sole foundation for an order for costs.
In Greedy & Greedy (1982) FLC 91-250 and Luadaka & Luadaka (1998) FLC 92-830, the Full Court made clear that it is unnecessary to spell out detailed reasons for decisions in costs matters.
The wife’s application
The wife provides a somewhat detailed history of the proceedings in her affidavit in support of her application for costs.
She makes complaint as to the husband’s lack of engagement in the proceedings, in particular, in relation to appropriate disclosure and discovery. Otherwise, the husband at various times failed to comply with orders as to the filing and service of documents.
In 2018 the respondent was sentenced to two years imprisonment in relation to fraud offences unrelated to these proceedings.
Otherwise, the wife makes complaint as to the costs incurred by her in dealing with third parties to these proceedings. In relation to a third-party intervener in these proceedings, the wife obtained a costs order against that party in the sum of $6,600 on 4 July 2019. It appears that she has been unsuccessful at this stage in enforcing that debt. It is not the position that the wife can now sheet home any liability for those unpaid costs as against the husband.
The quantum of the costs order sought by the wife would appear to meet the totality of her costs to her solicitor.
An order for costs is by reason of firstly, the disparity in the financial circumstances of each party, the husband’s lack of engagement in the proceedings and his failure to comply with orders as to filing of documents.
The husband’s application
The husband for his part takes issue with many of the complaints made by the wife in relation to the conduct of these proceedings, although he acknowledges that on the second day of the property hearing he did seek to provide historical financial disclosure, particularly, as to his tax returns during cohabitation.
On 29 October 2018 the respondent husband sought to resolve the matter by way of an offer of settlement as follows:
a)that there be a payment by the wife to the husband of $150,000; and
b)that such sum be paid by way of an initial payment of $25,000 with the balance to be paid at the earlier of the date of the wife’s remarriage or within 30 days of written demand by the husband with such demand to be no earlier than 1 October 2020.
The husband’s offer of settlement bore little resemblance to the final orders of the Court that facilitated the husband retaining his superannuation entitlement of about $10,000 and receiving a payment from the wife of $60,000 within six months from the date of orders.
Again, for his part, the husband provides detailed particulars of the history of these proceedings with much of that history being irrelevant to the present applications.
Discussion
The primary position in relation to costs is set out above. A consideration of the relevant factors in determining whether the rule should be appropriately displaced, reveals no circumstances which would justify a departure from the general rule.
In all of the circumstances the cross applications for costs will be dismissed.
I certify that the preceding twenty seven (27) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 3 August 2020.
Associate:
Date: 3 August 2020
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