Farina & Naima (No. 3)

[2017] FamCA 824

FAMILY COURT OF AUSTRALIA

FARINA & NAIMA (NO. 3) [2017] FamCA 824

FAMILY LAW – COSTS – the Applicant seeks costs in relation to the final property settlement aspect of the proceedings – Application granted.

Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth)

Brott & Joachim (2006) FLC 93-259
D & D (Costs) (No 2) (2010) FLC 93-435
Latoudis & Casey (1990) 170 CLR 534
Lenova & Lenova (Costs) (2011) FamCAFC 141
Ruddock and others & Vadarlis and others (2001) 188 ALR 143
Stephens & Stephens and others (Enforcement) (Costs) [2010] FamCAFC 172

APPLICANT: Ms Farina

RESPONDENT: Mr Naima

INDEPENDENT CHILDREN’S LAWYER: Carter Farquar Mediation & Family Law

FILE NUMBER: BRC 9358 of 2014

DATE DELIVERED: 9 October 2017

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Hogan J

HEARING DATE: In Chambers on the papers following the receipt of written submissions  

REPRESENTATION

SOLICITOR FOR THE APPLICANT:	Maguire Barnes Family Lawyers by way of written submissions filed on filed on 21 August 2017
RESPONDENT:	By way of written submissions in response filed 15 September 2017

SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: Carter Farquar Mediation & Family Law

Orders

IT IS ORDERED THAT

1. The Respondent pay the Applicant’s costs of and incidental to the property settlement aspect of the proceedings between the parties, with such costs to be paid on a party and party basis in an amount agreed between the Applicant and the Respondent or, failing agreement as to quantum, as assessed on a party and party basis, with the amount agreed or assessed to be paid within 30 days of either agreement of quantum or assessment of quantum.

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 Farina & Naima (No. 3) 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 BRISBANE

FILE NUMBER: BRC 9358 of 2014

Ms Farina

Applicant

And

Mr Naima

Respondent

REASONS FOR JUDGMENT

1. On 28 July 2017, I made orders and delivered Reasons for Judgment which disposed of the dispute between the parties in relation to the property settlement aspect of the proceedings on foot between them. 

2. Those proceedings, together with the proceedings for parenting orders, commenced before me on 16 January 2016. 

3. On 18 January 2016, the parties reached agreement in relation to interim parenting orders – interim orders were made by consent.  What remained for disposition was the competing applications for orders in the property settlement proceedings aspect of the overall proceedings.

4. The parties at that stage were diametrically opposed. 

5. Ms Farina sought orders dismissing Mr Naima’s application for property settlement or adjustment orders.  In complete contrast, Mr Naima sought orders which would, if made, have affected an equal division of the property of the parties. 

6. The orders I made on 28 July 2017 dismissed Mr Naima’s application for property settlement orders, as detailed in paragraphs 12 to 24 of the Amended Response filed 18 January 2016, and in paragraphs 12 to 25 and 27 to 29 of the Amended Response filed 14 September 2016. 

7. The orders made also made provision for Ms Farina to seek costs and that, if she sought to do so, such application proceed by way of the provision of written submissions and be determined in Chambers – after affording Mr Naima the opportunity to provide written submissions in response. 

8. I have now received written submissions from each of the parties. 

9. Ms Farina seeks an order that Mr Naima be required to pay, on a solicitor and own client basis, the costs of the property aspect of the proceedings between them.  Mr Naima objects to the making of any order for costs. 

10. Section 117(1) of the Family Law Act 1975 (Cth) provides that each party to proceedings under the Act shall bear his or her own costs. However, if the Court is satisfied there are circumstances which justify it, an order may be made as to costs as considered just by the Court: s 117(2) of the Family Law Act 1975 (Cth).

11. In considering what order, if any, as to costs should be made, the Court must have regard to the matters set out in s 117(2A) of the Act. 

12. It is clear in the present case that Ms Farina is in a significantly superior financial position vis-à-vis Mr Naima.  Reference to the Reasons for Judgment delivered on 28 July 2017 contains sufficient particulars of the significant financial disparity between them.  In summary, Ms Farina, who is currently about 43 years of age, has available to her about $1,000,000.00 following the sale of a business.  She is also the owner of real property and other items of property as particularised in the Reasons for Judgment. 

13. In contrast, Mr Naima is, on the evidence before me, currently in receipt of Newstart Allowance: this has been the case between January and June of this year, during which time he has received about $6,121.00 in payments.  Prior to this, in the period from July 2016 to January 2017, it seems he was in receipt of what is described as a “special allowance” and received $7,583.00.  That is, between 1 July 2016 and about 21 June 2017, it seems that Mr Naima received $13,704.00 by way of government-provided payments.  Extrapolated over the 50 weeks of that period, his income was in the vicinity of about $274.00 per week. 

14. Information from the Child Support Agency suggests that his taxable income for the 2017 financial year was $15,268.00.  When coupled with the information to which reference has already been made, it appears that he earned, therefore, less than about $2,000.00 from a source other than government-funded payments during that financial year.

15. Ms Farina accepts that her financial position is significantly superior to that of Mr Naima.  However, she relies upon the comments in D & D[1] for the submission that his impecuniosity (or relative impecuniosity) is not a bar to the making of an order for costs if the Court is otherwise persuaded that the circumstances justify the making of the same. 

    [1] (2010) FLC 93-435.

16. I accept, of course, that D & D[2] clearly establishes that insolvency or impecuniosity of itself is not something which mitigates against the making of an order for costs if such order is otherwise thought by the Court to be justified in the circumstances in which any application falls to be considered.  As was said in D & D[3], whether an applicant seeking costs orders against an impecunious respondent ever recovers any of the money awarded by way of costs order is a different issue.

    [2] (2010) FLC 93-435.

    [3] (2010) FLC 93-435.

17. In opposing the making of any order that he pay Ms Farina’s costs of and incidental to the property settlement aspect of the overall proceedings between the parties, Mr Naima submits that it is important for the Court to remember that an order for costs is not to be made by way of punishing any party for continuing in litigation. 

18. I completely accept the submission that an order for costs is not punishment for litigating.  In fact, in Stephens & Stephens and others (Enforcement) (Costs)[4], the Full Court of this Court said (at paragraph 67 of the Reasons for Judgment), amongst other things, that an order for costs is made to compensate a party against expense incurred in litigation and is not punitive in nature.  Costs are not a penalty or damages:  Latoudis & Casey[5] by Mason CJ at 543 and McHugh J at 567;  Ruddock and others & Vadarlis and others[6] per Full Court of the Federal Court at 12;  and Brott & Joachim[7] per Full Court (Holden, Warnick and Boland JJ) at 80,403-404. 

    [4] [2010] FamCAFC 172.

    [5] (1990) 170 CLR 534.

    [6] (2001) 188 ALR 143.

    [7] (2006) FLC 93-259.

19. Consequently, it is clear, as I have said, that any order for costs that I might be persuaded to make should not be regarded by Mr Naima or Ms Farina as constituting punishment for his continuation of the litigation. 

20. I take into account, as I am required to do in the circumstances of the case, that neither party was in receipt of Legal Aid.

21. I take into account that Ms Farina appeared with the assistance of solicitors and Counsel and that Mr Naima acted on his own behalf as a litigant in person. 

22. I am not persuaded that there is anything in the conduct of either of the parties to the proceedings in relation to the proceedings which, of itself, persuades that the circumstances justify the making of an order departing from the starting point established by s 117(1) of the Act.

23. I am also not persuaded that there is anything before me to establish that the proceedings for property settlement orders were necessitated by either party’s failure to comply with any previous orders of the Court. 

24. Mr Naima relies upon the fact that, in about December 2016, he proposed to Ms Naima that the parties reach resolution of the property settlement aspect of the proceedings and the parenting aspect of the proceedings on a certain basis.  Insofar as the property aspect of the proceedings is concerned, he proposed that orders be made which would have the effect of seeing him receive property having a value of 30 per cent of the net value of the total property of the parties. 

25. It is immediately obvious that Mr Naima did not do as well following the making of final orders as this proposal.  It is also obvious, I think, that Ms Farina was wholly successful in her application that his application for property settlement orders be dismissed, and that, consequently, he was wholly unsuccessful in attempting to prosecute that proceeding. 

26. Whilst it is perhaps unnecessary to remark upon it for the purpose of disposing of the application for an order for costs, I record that I do not accept the contention (or any contention) in relation to the assistance provided to Mr Naima by an interpreter during the course of the proceeding.  I do not accept any suggestion, implicit or otherwise, that Mr Naima was in some way hindered in his presentation of his case; noting as I do (as recourse to the transcript will no doubt reveal) that he made very limited use of the interpreter provided, at public expense, for his assistance during the course of the proceeding.  On occasion, he was, in fact, happy to disavow the necessity for the return of the interpreter. 

27. In any event, I take into account, also, the information provided by Mr Naima to the effect that his current child support assessment is in the amount of about $35.00 per month.

28. It is submitted on his behalf that any costs order would inevitably lead to his bankruptcy.  The potentiality of this consequence, in my view, is not, of itself, a complete bar to the making of an order for costs, if I am otherwise persuaded that the circumstances justify the making of such an order.

29. I have concluded, in the exercise of the broad discretion provided by the terms of section 117(2) of the Family Law Act 1975 (Cth), that the circumstances of the case justify the making of an order that Mr Naima pay Ms Farina’s costs of and incidental to the property settlement aspect of the proceedings between them, on a party-and-party basis in an amount agreed or, failing agreement, an amount assessed.

30. I have done so taking into account the matters to which I have already referred, noting as I do the significant disparity in financial circumstances between Ms Farina and Mr Naima.

31. I have arrived at my conclusion that the circumstances justify the making of the order I intend to make, in circumstances where, as I have already found in the Reasons for Judgment delivered on 28 July 2017, Mr Naima failed to establish those factual contentions he specifically relied upon, for example, by way of his asserted contributions. 

32. I have taken into account that he was not legally represented and appeared on his own behalf.  But, I have also taken into account that, as is implicit in the reasoning of the Full Court in Lenova & Lenova(Costs)[8], that a failure to make an order for costs where appropriate may well be an encouragement for parties to continue with unmeritorious applications.

    [8] (2011) FamCAFC 141.

33. I am not persuaded, however, that the circumstances justify the making of an order that Mr Naima pay Ms Farina’s costs of and incidental to the property settlement aspect of the proceedings on a solicitor and own client basis.  I am not persuaded that the circumstances justify a departure from the usual order for costs, namely, that they be paid on a party-and-party basis, as assessed if agreement as to quantum cannot be reached.

34. Insofar as the quantification of the costs payable by Mr Naima to Ms Farina is concerned, it is important to emphasise that the order I make covers only those matters of and incidental to the property settlement aspect of the proceedings between the parties – that is, the property settlement proceedings contained within the overall property settlement and parenting proceedings in which the parties have been involved – and do not extend to any aspect of the parenting proceedings which remain on foot before me.

35. Whilst it may be that the costs associated with assessing the costs and arriving at the quantum of the same outweigh the benefit to Ms Farina of the order I intend to make, that is entirely a matter for her.  In the same way, it is entirely a matter for her as to the likelihood (or otherwise) of her being able to recover and benefit from the order that I intend to make.

I certify that the preceding thirty-five (35) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hogan delivered on 9 October 2017.

Associate:                 

Date:    9 October 2017