Jalal & Malki
[2021] FedCFamC1F 260
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Jalal & Malki [2021] FedCFamC1F 260
File number(s): BRC 2053 of 2016 Judgment of: HOGAN J Date of judgment: 7 December 2021 Catchwords: FAMILY LAW – COSTS – Whether the applicant ought pay the respondent’s costs on an indemnity basis – Whether offers made by the respondent were in terms more favourable to the applicant than those ultimately ordered – Where the cash sum received by the applicant received was less than the quantum it was thought she would receive – Whether the applicant’s conduct in the proceedings justifies making a costs order against her – Where the applicant was self-represented. Legislation: Family Law Act 1975 (Cth) s 117 Cases cited: Jalal & Malki [2021] FamCA 637 Number of paragraphs: 21 Date of last submission/s: 15 September 2021 Date of hearing: Determined in Chambers following the receipt of written submissions Place: Brisbane Counsel for the Applicant: Self-represented Counsel for the Respondent: Mr MacDonald Solicitor for the Respondent: Stuart Percy & Associates ORDERS
BRC 2053 of 2016 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS MALKI
Applicant
AND: MR JALAL
Respondent
ORDER MADE BY:
HOGAN J
DATE OF ORDER:
7 DECEMBER 2021
THE COURT ORDERS THAT:
1.Mr Jalal’s application for an order that Ms Malki pay his costs of and incidental to the proceedings on either an indemnity or a party/party basis is dismissed.
2.Each party shall bear their own costs of and incidental to the application for costs.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Jalal & Malki has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HOGAN J:
On 27 August 2021, orders were made to finalise the property settlement proceedings between the parties.
By way of broad summary, those orders provided for:
(a)Ms Malki to receive a cash payment of about $110,000.00 (inclusive of $20,000.00 already payable to her by virtue of an earlier order) and retain her entitlement to superannuation (in an amount of about $338,430.00), chattels (having a value of about $1,450.00) and property (being vacant land in Country Q valued at $19,840.00); and
(b)Mr Jalal to receive a cash payment of $220,000.00 (inclusive of $20,000.00 already payable to him by virtue of an earlier order) and retain his entitlement to superannuation (in an amount of about $77,658.00), the chattels (having a value of about $64,200.00) and property in his possession and under his control (having a nett value of about $407,616.00) and, following transfer of the same, Ms Malki’s shares in various corporate entities.
The August 2021 orders were to cause Ms Malki to receive property and entitlement to superannuation having a total value of about $469,718.00 (which represented about 37.88[1] per cent of the nett value, as found, of the total property of the parties) and Mr Jalal to receive property and entitlement to superannuation having a total value of $769,474.00 (which represented about 62.05 per cent of the nett value, as found, of the total property of the parties). The conclusion that the orders made were just and equitable also took into account that Ms Malki had already had the benefit of receipt of about $32,000.00 from the sale of various chattels, which she had applied to her support since the September 2011 separation.
[1] Depending on the actual nett sale proceeds – see Jalal & Malki [2021] FamCA 637, footnote No. 4.
Mr Jalal now seeks an order that Ms Malki pay his costs of and incidental to the proceedings and that such costs be paid on an indemnity basis or, failing that, on a party/party basis.
It was submitted on his behalf that the Court would be persuaded that the circumstances justify the making of an order that Ms Malki pay his costs[2] and that it is just that the same be paid on an indemnity basis because he had previously made numerous offers to
Ms Malki to resolve the proceedings on terms more favourable to her than those ultimately ordered and otherwise because of her conduct in the proceedings. In the event that the submission that an order for costs be made against Ms Malki on an indemnity basis does not find favour, it was submitted that the Court would be persuaded to order the same to be paid on a party/party basis, calculated in accordance with the now-repealed Family Law Rules 2004 (Cth).
[2] Family Law Act 1975 (Cth) s 117(2).
Ms Malki opposes the making of an order for costs.
The usual course in relation to costs in proceedings under the Family Law Act 1975 (Cth) (“the Act”) is that each party bears their own costs.[3] However, if it is of the opinion that there are circumstances that justify it in doing so, the Court may, subject relevantly to s 117(2A) of the Act, make such order as it considers just.[4]
[3] Family Law Act 1975 (Cth) s 117(1).
[4] Family Law Act 1975 (Cth) s 117(2).
Neither party was in receipt of legal aid. Mr Jalal was represented by privately engaged lawyers at the trial. Ms Malki acted on her own behalf.
It was submitted on Mr Jalal’s behalf that Ms Malki has the financial capacity to meet any costs ordered to be paid because she will receive funds pursuant to the August 2021 orders. However, whilst issue was taken with the Court receiving the submissions made by Ms Malki, Counsel for Mr Jalal did not, in the submissions in reply, take issue with her assertion that she has the amount of $61,342.55 available to her following the sale of the M Street property or assert on Mr Jalal’s behalf that this was incorrect. Such sum is significantly less than the quantum it was thought Ms Malki would receive following the sale of the M Street property.
It was submitted on Mr Jalal’s behalf that the following conduct by Ms Malki justifies the making of a costs order on an indemnity basis or, failing that, on a party/party basis:
(a)failing to accept various offers made to her over time to resolve the proceedings on terms which would have been more favourable to her than the orders ultimately made; and
(b)accepting an offer made at a conciliation conference but subsequently resiling from the same; and
(c)failing to co-operate with the process of obtaining a valuation by an independent expert (Mr S) of the Jalal Group of entities and, without providing alternative expert evidence about this issue, subsequently refusing to accept the single expert witness’ expert opinion about the same.
It was submitted that the conduct summarised above caused Mr Jalal to incur costs that would not have otherwise have been incurred, including those associated with him bringing a number of interlocutory applications, and, therefore, the Court would be persuaded that the circumstances justify the making of an order for costs. Quite properly, it was conceded on behalf of Mr Jalal that the proceedings themselves were not necessitated by any failure by Ms Malki to comply with previous orders.
It was also submitted on Mr Jalal’s behalf that Ms Malki did not receive anything like the relief she sought in the proceedings and that, effectively, Mr Jalal was wholly successful and Ms Malki was wholly unsuccessful in the same.
Insofar that Ms Malki made offers to resolve the proceedings prior to trial, it was submitted on Mr Jalal’s behalf that these were so far outside the possible realms of any likely range of resolution as to suggest that they were not made reasonably. I do not accept this submission, particularly as Ms Malki was self-represented for much of the proceedings.
Mr Jalal’s evidence included that he had spent at least $112,661.00 on the proceedings and costs associated with them (for example, the costs of obtaining expert valuations of the various trusts and corporate entities through which he operates his business). I accept that the evidence establishes that Mr Jalal’s costs of the trial in March this year were in the amount of $41,628.40. I also accept that, if calculated according to scale, such costs were about $24,000.00.
Ms Malki asserted that she had spent about $75,000.00 on legal representation over the course of the proceedings and that she had also paid $5,000.00, from the $20,000.00 paid to her pursuant to an earlier order, towards the costs of obtaining the finalised business valuation.
I accept that Mr Jalal made a number of offers to Ms Malki to resolve the proceedings prior to the trial. Consideration of the same needs, in my view, to take into account that it was known to him that, after the 2011 separation, Ms Malki had returned to study in 2014; that, until February 2018, an entity under his control continued to pay the repayments for a loan secured by mortgage over the house in which she lived and that, until February 2017, she was significantly financially supported by payments made by an entity under his control. These matters are, in my view, relevant to the assessment of whether various offers previously made to Ms Malki were likely to have been capable of implementation.
Analysis of some of the offers made by Mr Jalal to Ms Malki appears to me to reveal the following: the offer made on 20 September 2017 was uncertain in its terms because it included a provision that Ms Malki pay Mr Jalal an amount of cash reflecting a just and equitable division of the pool; acceptance of the offer made on 15 June 2018 (to the effect that each party retain specified real property, take over the indebtedness secured over the same and that Ms Malki pay him $100,000.00 cash or effect a superannuation split in the same amount) would have required Ms Malki to have been able to secure sufficient finance; whilst the offer made on 4 September 2018 provided, in essence, that Ms Malki retain the M Street property and sell the real property owned by D Pty Ltd as trustee for the D Investments Trust and utilise the payments from the same to pay $260,000.00 to Mr Jalal, that property was in fact retained.
I accept that, on 4 December 2020, Mr Jalal made an offer to Ms Malki that she retain the nett proceeds from the sale of the M Street property; that he receive the property owned by D Investments Trust and that each of them otherwise retain all property and entitlement to superannuation interests in their respective names. I accept that, on 27 January 2021, Mr Jalal made an offer to Ms Malki that she retain the nett proceeds from the sale of the M Street property; that he receive the property owned by D Investments Trust; that she pay him $20,000.00 within 30 days and that each of them otherwise retain all property and entitlement to superannuation interests in their respective names. It is clear that acceptance of either of these offers would have seen Ms Malki receive more than she did as a consequence of the August 2021 orders.
I accept that, by correspondence sent late on 27 February 2021[5] (being the Friday before the trial was listed to commence on Monday, 1 March 2021), Mr Jalal offered to resolve the proceedings on the basis that Ms Malki retain the nett proceeds from the sale of the M Street property, other than the amount of $120,000.00 which she was to pay to him within 30 days; that he receive the property owned by D Pty Ltd ATF D Investments Trust; that she transfer her interests and benefits in various entities to him and that each of them otherwise retain all property and entitlement to superannuation interests in their respective names. I accept that this offer included a term that each party bear their own costs of the proceedings.
[5] Namely, at 4.25 pm.
I accept that impecuniosity of itself is not an automatic bar to the making of an order for costs. I also accept that an imprudent refusal to accept a reasonable offer to resolve proceedings prior to trial is a matter to which significant weight should be given in determining whether the circumstances justify a departure from the statutory starting point that each party to proceedings under the Act shall bear their own costs. However, it is but one circumstance of those particularised in s 117(2A) of the Act to which the Court must have regard.
Whilst others may well disagree, in the exercise of the broad discretion entrusted to judges at first instance, particularly in relation to the disposition of the issue of costs, I have ultimately concluded that I am unpersuaded that the circumstances justify the making of an order that Ms Malki pay Mr Jalal’s costs of and incidental to the proceedings. I have primarily arrived at this conclusion because the implementation of the August 2021 orders finalising the proceedings appears to have resulted in Mr Jalal receiving all of the $220,000.00 (inclusive of $20,000.00 already payable to him by virtue of an earlier order) he was ordered to receive, whilst Ms Malki received only about $61,000.00 of the $110,000.00 (inclusive of $20,000.00 already payable to her by virtue of an earlier order) she was to receive. Having taken into account and considered the submissions made on Mr Jalal’s behalf, such circumstance persuades me that the circumstances do not justify making an order that Ms Malki pay Mr Jalal’s costs of and incidental to the proceedings; if I am wrong in this conclusion and the circumstances justify the making of an order for costs, I am not persuaded that an order that Ms Malki pay Mr Jalal’s costs of and incidental to the proceedings is just.
I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hogan. Associate:
Dated: 7 December 2021
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