GONG & YEE (No.2)

[2020] FCCA 670

FEDERAL CIRCUIT COURT OF AUSTRALIA

GONG & YEE (No.2) [2020] FCCA 670

Catchwords:
FAMILY LAW – Costs – respondent seeks costs after applicant wholly unsuccessful in application for leave to proceed out of time.

Legislation:

Family Law Act 1975 (Cth), ss.44(3), 44(6), 117, 117(1), 117(2A)

Cases cited:

Gong & Yee [2020] FCCA 400

Applicant: MS GONG

Respondent: MR YEE

File Number: MLC 8666 of 2019

Judgment of: Judge Harland

By way of Written Submissions: 28 November 2019 & 11 March 2020

Date of Last Submission: 11 March 2020

Delivered at: Melbourne

Delivered on: 26 March 2020

REPRESENTATION

Solicitors for the Applicant: Mr Guo of GR Lawyers

Counsel for the Respondent: Mr Schmidt

Solicitors for the Respondent: Blackwood Family Lawyers

ORDERS

1. That the applicant pay the respondent’s costs in the sum of $7,669.00 within 60 days.

IT IS NOTED that publication of this judgment under the pseudonym Gong & Yee (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 8666 of 2019

MS GONG

Applicant

And

MR YEE

Respondent

REASONS FOR JUDGMENT

1. The applicant filed an application on 4 August 2019 pursuant to s.44(6) of the Family Law Act 1975 (Cth) (“the Family Law Act”) seeking leave to issue an application adjusting the parties’ property interests out of time.

2. On 28 February 2020 I delivered my reasons in this matter dismissing the applicant’s application. The background and circumstances of the matter are set out in my primary judgment Gong & Yee [2020] FCCA 400. These reasons should be read with those reasons for background.

3. The respondent sought an order for costs and addressed the issue of costs in his written submissions filed before the interlocutory hearing. As the applicant did not address the issue of costs, I required the applicant to file any written submissions in response to the respondent’s application for costs within 14 days.

4. The respondent is seeking that the applicant pay his costs of the proceedings on a party-party basis in the sum of $9,669. The respondent submits that this figure represents his costs from the time of the first return on 7 October 2019 until and including preparation and appearances for the interlocutory hearing on 5 December 2019. He sets out a calculation of his solicitor’s and counsel’s fees as a disbursement in accordance with the costs scale of the Federal Circuit Court Rules 2001 (Cth).

5. In the applicant’s written submissions filed 11 March 2020, she seeks that the Court not make any order as to costs as “the matter ceased at an early stage” and because “the husband had not won the case on the facts of what money he had taken and under which circumstances”.

6. The applicant’s written submissions are misconceived and do not make any reference to s.117 of the Family Law Act. Her submissions make reference to my primary judgment and the criticisms I made regarding the formulation of the applicant’s case. At paragraph 26 of my primary judgment I note that whilst the application is for specific relief, the claim and evidence in the applicant’s affidavit reads as “enforcing some sort of commercial transaction and not relief under Part VIII of the Family Law Act”. The applicant submits that she sought to be repaid the $100,000 rather than an adjustment of the overall asset pool to “reduce the amount of dispute and expenses such as valuations and to contain the dispute to provide proportionality”. Her submissions also assume that she had established on the material that she had advanced $100,000 to the respondent. That is not the case.

7. Section 117(1) of the Family Law Act provides that each party to proceedings shall bear their own costs. In order for the Court to make a costs order in favour of either party, there must be justifying circumstances as set out in s.117(2A) of the Family Law Act:

   (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.

The financial circumstances of each of the parties to the proceedings

1. Neither set of submissions set out the full financial positions of the parties.

2. The applicant submits that as the applicant is due to give birth and considering the costs of raising a young child, the court should not make an order for costs in favour of the respondent, who appears to be in a better financial position given “his vast property portfolio”.

3. In the applicant’s financial statement filed 4 August 2019, she indicates that her weekly income is approximately $1,630. At paragraphs 29 to 37 of her affidavit filed 4 August 2019 the applicant outlines her and her parents’ financial circumstances. She deposes at paragraph 30 that now that her parents are retired, she is responsible for caring for them and supporting them financially. The applicant notes at paragraph 31 that her parents have expended approximately $180,000 to treat her mother’s Leukaemia.

4. She further deposes at paragraphs 34 and 35 that the unit in Suburb G, which she and her current partner reside in, as well as an apartment in the city are both in her name, however were purchased using her parents’ funds and that mortgage repayments are made with the assistance of her parents. She says she and her partner cannot meet these payments solely.

5. The respondent was not required to file a financial statement given the threshold issue. He does not outline his current financial position in his affidavit filed 4 October 2019 however deposes at paragraph 6 that he and the applicant have no financial connection and never owned any property together. He outlines the purchase of the property at A Street, Suburb B at paragraphs 18 to 26 of his affidavit. He sold that property and bought others.

6. In the submissions the applicant submits that the respondent has been able to build up a property portfolio with the $100,000 she advanced. Again, this has not been established. I refer to my primary reasons.

Whether any party to the proceedings is in receipt of assistance by way of legal aid

1. Neither party is in receipt of legal aid.

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

1. The applicant brought her application for an adjustment of property more than five years out of time. Paragraph 39 of my primary judgment outlines the applicant’s reasons for not commencing proceedings earlier.

2. The respondent submits that in the event the applicant’s application is summarily dismissed, costs should be awarded to the respondent as the applicant’s initiating application had no reasonable prospect of success. The respondent further submits that even if the applicant were granted leave to proceed out of time, all costs incurred by the respondent up to the interlocutory hearing would and should have been avoided had she filed her application within the time limit prescribed by s.44(3) of the Family Law Act.

3. The respondent also submits that further costs were incurred due to the applicant’s failure to comply with Order 3 of the Orders made on 7 October 2019. The applicant was ordered to file any further material by 4 November 2019. The respondent states that due to the late filing of the applicant’s second affidavit on 23 November 2019, costs were thrown away with respect to the respondent’s submissions, which required substantial amendment in order to address the second affidavit. I accept that the respondent incurred additional costs because of the non-compliance with orders. This additional cost is reflected in the breakdown of disbursements for counsel’s fees.

Whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court

1. This is not applicable.

Whether any party to the proceedings has been wholly unsuccessful in the proceedings

1. The respondent submits that the applicant’s initiating application had no reasonable prospect of success.

2. The respondent states at paragraph 29 of his affidavit filed 4 October 2019 that the applicant did not inform him of her intention to bring her application. The respondent outlines in his written submissions that the applicant has been on notice since 26 September 2019 that if she decided to proceed with her application then a costs order would be sought against her. The applicant annexes to her affidavit filed 23 November 2019 this email correspondence from the respondent’s solicitors.

3. I noted at paragraph 48 of my primary judgment that there was no attempt by the applicant to negotiate prior to both parties incurring filing costs. It appears from the applicant’s submissions that she agrees that she did not write to the respondent demanding repayment of the monies but also submits that the respondent did not offer at any stage to repay any amount in order to reduce or avoid legal costs. Again, she makes these submissions on the erroneous assumption that this is not a disputed fact.

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

1. Neither party made written offers of settlement.

Such other matters as the Court considers relevant

1. The applicant submits that if she were ordered to pay the respondent’s costs then it would be “adding salt to wound” and penalising the applicant for bringing proceedings late. She further submits that she is a victim having lost $100,000, feeling “shame and lack of power or determination to pursue litigation” and that it would not be just and equitable if she had to pay the person, who she had already given $100,000, even more money for trying to get the money back. This submission is misconceived as again it assumes that she established she was owed $100,000.

Conclusion

1. The applicant did not attempt to mitigate costs by putting the respondent on notice of the proceedings prior to filing her material with the Court.

2. The submissions, like the earlier material, contain several emotive statements and assume that the respondent has been disingenuous and lacks credibility. Again, I refer to my primary reasons. As the issue to be determined was a threshold issue, neither party’s evidence has been tested. The onus to establish the claim rested on the applicant not the respondent. It is also inappropriate to submit that no order as to costs should be made to “avoid further escalations or appeal”. Aspects of both the primary and the costs submissions are simply misconceived.

3. The applicant’s submissions do not engage with s.117 of the Family Law Act and the respondents submissions. Her submissions are silent about the quantum sought. She refers to the respondent being in a stronger financial position than her. This may be correct although as stated above I have little information about the parties’ financial circumstances.

4. Assuming that the respondent is in a stronger financial position than the applicant does not mean the Court should not order costs. The respondent had no forewarning of the proceedings. He had no choice but to seek legal advice and respond. Given the time that had passed since the parties’ divorce, he was entitled to make whatever arrangements he sought fit, assuming that the applicant would not file any claim. His lawyer put her on notice he would seek costs if she continued with her claim pointing to problems with the application. The applicant refers to it not being just and equitable to order costs. That is not the test. I am satisfied that the circumstances of this case justify a costs order being made.

5. I observe that the first return date had to be adjourned because whilst the respondent sought that the application be summarily dismissed that day, his response and affidavit was only filed the previous Friday, giving the applicant less than a business day to consider the material. In those circumstances I am not satisfied that the applicant should pay the appearance fees for the respondent’s Counsel’s fees of $2,000.

6. I will order the applicant to pay the respondent costs of $7,669 within 60 days.

I certify that the preceding twenty-nine (29) paragraphs are a true copy of the reasons for judgment of Judge Harland

Date:  26 March 2020