Goyal and Goyal (No 2)

[2019] FamCA 526

FAMILY COURT OF AUSTRALIA

GOYAL & GOYAL (NO. 2) [2019] FamCA 526

FAMILY LAW – COSTS – where the wife asserts lack of financial capacity – whether the wife should pay the second respondent’s costs – indemnity fixed at $8000

Family Law Act 1975 (Cth) s 117(2), (2A)

Lenova & Lenova (Costs) [2011] FamCaFC 141

Ebbner & Pappas [2014] FamCAFC 229

Bhatt & Acharya (Costs) [2017] FamCAFC 71

APPLICANT: Mr Goyal

FIRST RESPONDENT: Ms Goyal

SECOND RESPONDENT: Mr C Goyal

INDEPENDENT CHILDREN’S LAWYER: JLM Family Lawyers Pty Ltd

FILE NUMBER: SYC 6633 of 2017

DATE DELIVERED: 15 August 2019

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Henderson J

HEARING DATE:

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Harper

SOLICITOR FOR THE APPLICANT: O'Sullivan Legal

COUNSEL FOR THE RESPONDENT: Self-Represented Litigant

COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER: Ms Reheby

SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: JLM Family Lawyers Pty Ltd

Orders

1. The respondent wife is to pay, by way of costs, the sum of $8,000 to the second respondent paternal grandfather, or as he may otherwise direct, within three months of today’s date.          

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 Goyal & Goyal 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 SYDNEY

FILE NUMBER: SYC6633 of 2017

Mr Goyal

Applicant

And

Ms Goyal

Respondent

REASONS FOR JUDGMENT

1. The matter of Goyal was an application by the second respondent, being the paternal grandfather, for his costs of having been joined in a property dispute proceedings between his son and former daughter-in-law.

2. The costs sought by the second respondent is an extremely modest sum of $8,000.

3. To their credit, the parties resolved all property and parenting issues between themselves and the husband’s father at the commencement of the proceedings.

4. In any application for costs, I must have regard to section 117(2) of the Family Law Act 1975 (Cth) (“the Act”). The primary position under the Act is that each party to the proceedings bears their own costs. However, this is a costs application by a third party who is not a party to the marriage and was joined in proceedings by a party to a marriage, namely the wife.

5. Section 117(2)[1] provides that:

   if, in proceedings under this Act, the court is of the opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A), (5) and (6) 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.

   [1]Family Law Act 1975 (Cth), s 117(2).

6. Section 117(2A)[2] reads:

   [2]Family Law Act 1975 (Cth), s 117(2A).

   In considering what order (if any) should be made under subsection (2), the court shall have regard to:

   (a)the financial circumstances each of the parties in 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 limning 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 is made an offer in writing to the other party to the proceedings to settle the proceedings in the terms of any such offer; and

   (g)such other matters as the court considers relevant.

7. It is clear from the chronology that in 2008, the husband and his father discussed purchasing land and building a home for the family. The parties had been married for five years prior to that time and had purchased and sold property in Suburb R. The parties used the funds from that sale to open a restaurant and to assist the husband’s parent’s move to Australia.

8. In 2009, the parties purchased land in Suburb N for $315,000 as to 95% in the husband’s father’s name and 2.5% in each of the parties’ names. The husband’s father paid a deposit of $31,500 for the land, obtained a first home owner’s grant for $24,000, and borrowed $304,000 from the Commonwealth Bank.

9. In June 2009, the home was constructed for $242,060. The husband’s father paid the home building contract deposit of $12,103, and the parties borrowed the balance of funds from the Commonwealth Bank in the amount of $229,864.

10. In July 2010, the home was completed and the parties moved into the property. The husband’s father contributed an additional $42,800 to landscaping, furnishings, carpets and the like for the home. The husband and wife made mortgage payments in respect of both lines over the property.

11. In May 2013, the husband’s father discharged the second mortgage with a lump sum payment of approximately $221,000.

12. From July 2010 to date, the husband’s father paid all outgoings on the property including electricity, water rates, council rates, gas, bills, pest control and home repairs. The husband’s father also purchased food for the parties whilst they were living in the home. At that time there were five people living in the property, being the parties and their son, and the husband’s father and his wife. This arrangement continued until the wife vacated the property in 2017. At the date of the hearing, the home was worth $1,050,070, with a mortgage of $263,452, giving a net value of $811,548.

13. On 4 May 2019, the second respondent made an offer in writing to the wife and husband to pay 15% of the equity in the home to resolve the matter as between the 2^nd respondent and the husband and wife. This was rejected in writing on 10 May 2019 by the wife the husband accepted the offer.

14. The offer was re–made by the second respondent on 6 May 2019, and remained open until 8 May 2019.

15. The offer was accepted by the wife on 2:37pm on 8 May 2019, three minutes prior to it expiring.

16. On 10 May 2019, the acceptance was withdrawn by the wife. At that time, the wife was still represented. This necessitated the second respondent re-briefing Mr Coleman SC of Counsel to represent him at the trial. These are the costs he seeks to be reimbursed and none other.

17. The wife has never pleaded in any formal response or application the precise orders she sought against her former father-in-law other than her objection to his entitlement to 95% of the net value of the property.

18. The wife became unrepresented prior to the trial and represented herself throughout the trial which trial was in relation to the parenting issues only.

19. The settlement reached on 8 May 2019 was that the husband and wife be paid $121,730, representing a 15% share of the net equity in the Suburb N property. The second respondent paid that sum into court on 4 June 2019.

20. The wife agreed to settle the matter on the first day of trial on the terms that she received $100,000 of this sum and her husband the balance being the same terms as that she had first accepted on 8 May 2019 and then resiled from on 10 May 2019.

21. The wife has obtained precisely the same verdict that she would have obtained had she not resiled from the settlement reached between all the parties on 8 May 2019 and at a time she was represented.

22. I accept the wife’s financial position is difficult, given that she is not working but is retraining to re-enter the workforce. However, the Full Court in Lenova[3] found that impecuniosity is, of itself, no bar to a costs order. This decision was upheld in the Full Court decisions of Ebbner & Pappas[4] and Bhatt & Acharya[5]. Additionally, whilst the wife has limited income, she is not entirely impecunious in that she has received $100,000 by way of property settlement.

    [3]Lenova & Lenova (Costs) [2011] FamCAFC 141.

    [4]Ebbner & Pappas [2014] FamCAFC 229.

    [5]Bhatt & Acharya (Costs) [2017] FamCAFC 71.

23. The father-in-law is also in a difficult financial position being of an age that he no longer works.

24. No party was entitled to Legal Aid, and I note the mother has paid one half of the Independent Children’s Lawyer’s costs for the parenting matter.

25. The most highly relevant factor for me is that the wife agreed at the day of the trial to accept a settlement which was in precisely the same terms as the settlement reached on 8 May 2019 five days prior to the trial. Her resiling from the agreement on 10 May 2019 had necessitated the second respondent re-engaging his senior counsel for the hearing. This is conduct by the wife which has resulted in the second respondent incurring unnecessary legal costs, and his claim is a modest $8,000.

26. Having regard to all the factors in the matter, and that it is the wife’s conduct that has resulted in the second respondent incurring unnecessary legal fees, I have formed the view that despite the wife’s limited income, it is proper that she pay the sum of $8,000 to a third party to her marriage, being her former father-in-law. I will give the wife three months of today’s date to pay these costs.

I certify that the preceding twenty-six (26) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Henderson delivered on 15 August 2019.

Associate:

Date: 15 August 2019