Kachmar & Madero
[2022] FedCFamC1F 476
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Kachmar & Madero [2022] FedCFamC1F 476
File number(s): MLC 8783 of 2020 Judgment of: HARTNETT J Date of judgment: 7 July 2022 Catchwords: FAMILY LAW – PROCEDURAL – Application for joinder of parties – Where the wife seeks the husband’s mother and new partner are joined to property proceedings between the parties – Where the husband seeks the mother’s brother, father and two friends are joined to property proceedings between the parties –Whether the joinder of the proposed parties are persons whose interests would be affected by the making of an order under s 79 of the Family Law Act 1975 – Whether the joinder of the proposed parties are necessary for the Court to determine the matters in dispute between the parties – The wife’s application in a proceeding is successful – Where the husband did not seek leave to file his application in proceeding in accordance with central practice directions – No leave granted – The husband’s application in a proceeding dismissed.
FAMILY LAW – COSTS – Where the wife sought costs on an indemnity basis against the husband – Where the wife alternatively sought costs scale on a party/party basis against the husband – Where the husband was wholly unsuccessful – Where the husband has failed to comply with court orders – Costs ordered in favour of the wife.
Legislation: Family Law Act 1975 (Cth) ss 79(10)(b), 117, sch 3
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 3.01, 3.03, 3.04, 12.17
Cases cited: Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225
Kohan & Kohan [1993] FLC 92-340
Munday v Bowman [1997] FLC 92-784
Wayne & Dillon & Anor [2008] FamCAFC 204
Yunghanns & Yunghanns [2000] FLC 93-029
Division: Division 1 First Instance Number of paragraphs: 51 Date of hearing: 17 June 2022 Place: Melbourne Counsel for the Applicant: Ms Dellidis Solicitor for the Applicant: Waterson Legal The Respondent: Litigant in person ORDERS
MLC 8783 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS KACHMAR
Applicant
AND: MR MADERO
Respondent
ORDER MADE BY:
HARTNETT J
DATE OF ORDER:
7 JULY 2022
THE COURT ORDERS THAT:
1.MS C is hereby joined as a Second Respondent to the proceeding.
2.MS D is hereby joined as a Third Respondent to the proceeding only for the purpose of compliance with Order 5(b) hereof and that thereafter she be removed as a party to the proceeding in the absence of the Applicant making any application to maintain the joinder with such application to be filed within 21 days of the Applicant’s inspection of the discovered documents.
3.By 4.00pm on 28 July 2022 the Second Respondent file a Response, Affidavit and Financial Statement.
4.By 4.00pm on 28 July 2022 the Second Respondent provide discovery as follows:
(a)the full address of the apartment she owns in the Country B (“the Apartment”);
(b)all documents relating to the purchase of the Apartment including, but not limited to, the contract of sale, settlement statement, and proof of her source of funds for the purchase; and
(c)all bank statements under her name, anywhere in the world, solely or jointly with other persons for the period from 21 November 2016 to date.
5.By 4.00pm on 28 July 2022 the Third Respondent provide discovery as follows:
(a)All bank statements under her name solely for the period from 14 May 2021 to the date of this order.
6.By 4.00pm on 28 July 2022 the Third Respondent file and serve an affidavit as to her application of the sum of at least $33,200 transferred to her Country B bank account by the Respondent husband.
7.The Respondent husband’s Application in a Proceeding dated 23 May 2022 is dismissed.
8.By 4.00pm on 8 September 2022 the Respondent husband pay the Applicant wife’s costs of the interim hearing fixed in the sum of $7,966.22.
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 Kachmar & Madero has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARTNETT J
INTRODUCTION
The applications before me are the competing joinder applications of the wife and husband which propose to join persons to the parties property proceeding. The wife in her Application in a Proceeding filed 7 February 2022 seeks the joinder of the husband’s mother and new partner. The husband in his Application in a Proceeding filed 23 May 2022 seeks the joinder of the wife’s father, brother and two friends.
At the hearing on 17 June 2022, the wife, who lives in Australia, and her legal representatives, appeared in person. The husband, who is a Litigant in Person, and his partner, Ms D, appeared via Microsoft Teams in Country H. The husband and Ms D live in the Country B.
LEGAL PRINCIPLES
Section 79(10)(b) of the Family Law Act 1975 (Cth) (“the Act”) outlines that “any other person whose interests would be affected by the making of the order”, as sought by the parties, are entitled to be joined to the proceeding.
The Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“Family Law Rules”) sets out the procedure for the joinder of a party to the proceeding. Rule 3.01 states that:
A person whose rights may be directly affected by an issue in a proceeding, and whose participation as a party is necessary for the court to determine all issues in dispute in the proceeding, must be included as a party to the proceeding.
The word “necessary” was described by Warnick J in Wayne & Dillon & Anor [2008] FamCAFC 204, (I note in reference to Federal Magistrates Court Rules, as they were then, which are similar to the current rules), as meaning:[1]
...something more than “useful” or “expeditious”. In my view, if there are available alternative means to joinder to the substantive proceedings, of obtaining from a third person or someone already a party what is needed to allow an applicant for joinder to establish an identified “case”, joinder is unlikely to be “necessary”.
However, if a cause of action, recognisable at law, against a “third person” is particularised, then it is at least highly likely that joinder will be “necessary for the court to completely and finally determine all matters in dispute.”
[1] Wayne & Dillon & Dillon [2008] FamCAFC 204 at [18]-[19].
Pursuant to r 3.03(4) of the Family Law Rules, a party who seeks to join a third party to the proceeding after the first court date must be granted the leave of the Court to do so. The party must also, pursuant to r 3.03(5):
(a) file:
(i) an Application in a Proceeding; and
(ii)an affidavit setting out the facts relied on to support the addition of the proposed new party, including a statement of the proposed new party’s relationship (if any) to the other parties; and
(b) serve on the proposed new party:
(i) a copy of the Application in a Proceeding; and
(ii) the affidavit referred to in subparagraph (a)(ii); and
(iii) any other relevant document filed in the proceeding; and
(c) serve on the other parties:
(i) a copy of the Application in a Proceeding; and
(ii) the affidavit referred to in subparagraph (a)(ii).
MATERIAL RELIED UPON
The wife relied upon her:
(a)Application in a Proceeding filed 7 February 2022;
(b)Further Amended Initiating Application filed 23 February 2022;
(c)affidavits filed 9 March 2022 and 10 June 2022;
(d)affidavits of service filed 15 March 2022 and 14 June 2022; and
(e)financial statement filed 9 February 2022.
The husband relied upon his:
(a)Application in a Proceeding filed 23 May 2022;
(b)affidavits filed 23 May 2022, 9 March 2022, 9 February 2022, 21 January 2022 and 24 November 2021; and
(c)financial statement filed 21 January 2022.
BACKGROUND
The wife was born in 1978 and was 43 at the interim defended hearing. The husband was born in 1976 and was 46. The parties commenced cohabitation in 2000 and were married in 2005. The parties separated on 18 November 2016.
There are two children of the marriage, X born in 2010 and aged 11 years, and Y born in 2012 and aged 10 years. They reside with the wife in Australia. One child has special needs.
In 2018, the husband commenced a relationship with his new partner, Ms D.
On 8 December 2019, the parties were divorced.
On 12 August 2020, the wife filed an Initiating Application in the Federal Circuit Court of Australia (now Division 2 of the Federal Circuit and Family Court of Australia) (“Division 2”) seeking interim and final property orders.
On 20 October 2020, the husband filed a Response seeking interim and final parenting and property orders.
On 28 May 2021, the husband travelled to the Country B. Since that time the husband has remained so residing in the Country B. He was granted a temporary resident visa which expires in 2026, and lives with his partner Ms D in her rental property. Ms D works as a health care worker and provides some support to the husband. The husband claims to have been unemployed for approximately for 12 months before his arrival in the Country B and for the period thereafter.
In 2021, the wife purchased a business from her former employer for the sum of $120,000. The wife claims that she borrowed the totality of the purchase costs.
On 10 December 2021, Judge Harland of Division 2 delivered reasons for judgment in the wife’s interim application for a departure from child support. Relevantly, she made orders that:
(1)the husband repatriate $149,950 to Australia and that such monies be placed in the trust account of the solicitor for the wife;
(2)the husband file an affidavit addressing the transfer of funds by him, and provide any supporting documentation;
(3)the husband file a financial statement;
(4)the husband pay the wife’s costs of $2,903.75 in relation to an earlier hearing on 20 October 2021 on a party/party basis; and
(5)the wife’s cost of the hearing before Judge Harland be reserved.
The husband has failed to comply with (1) and (4) above.
On 14 February 2022, the matter was transferred to the Court.
On 25 February 2022, orders were made, relevantly, for documents, including the wife’s Application in a Proceeding filed 7 February 2022, and supporting affidavit, to be served upon Ms C, the husband’s mother and proposed second respondent, and Ms D, the proposed third respondent, via email; for the husband to disclose his bank accounts both in Australia and the Country B; and reserving and fixing the costs of and incidental to the wife’s Application in a Proceeding filed 7 February 2022 in the sum of $6,524.38. Consent orders were also made for the sale of E(1) Street, Suburb F in the State of Victoria. This is a vacant block of land which is property of the parties. The sale of this property has been delayed due to, on the wife’s evidence, the husband seeking a higher reserve price of $768,000, which is more than the two offers the parties have received.
On 16 March 2022, orders were made, relevantly, that:
….
2.The proposed Second Respondent and Third Respondent must attend the hearing of the Wife’s joinder application.
…
7.By no later than 4:00pm on 23 March 2022, the Husband provide to the Wife the full address of the apartment owned by the husband’s mother, MS C, in the Country B.
…
14.Within 60 days the Husband pays the Wife’s costs of and incidental to the Wife’s application in proceeding up to and including the hearing on 25 February 2022 fixed in the sum of $6,524.38.
15.The Wife’s costs of and incidental to the hearing dated 16 March 2022 be fixed in the sum of $7,293.20 on a party-party basis and reserved.
16.The Husband is restrained by injunction from accessing or otherwise dealing with:
(a)ANZ Bank Account …98 in the name of Mr Madero.
(b)ANZ Bank Account …95 in the name of Mr Madero.
17.The Wife is permitted to provide a copy of this Order to the ANZ Bank for enforcement of paragraph 16 herein.
Between 18 March 2022, and the hearing of the competing applications on 17 June 2022, further orders were made, including:
·on 6 May 2022, for the husband to pay the costs of the wife’s application filed 29 April 2022 fixed in the sum of $4,986.52 and that those costs be paid to the wife from the husband’s frozen ANZ bank accounts; and
·on 11 May 2022, the husband’s objection to the documents produced by the ANZ, pursuant to subpoena, being released for inspection was dismissed.
CONSIDERATION
As earlier referred to, Ms C is the husband’s mother (“Ms C”) and Ms D is the husband’s partner (“Ms D”). Counsel for the wife submitted that pursuant to r 3.01 of the Family Law Rules it was necessary to join Ms C and Ms D to the proceeding to determine all issue in dispute in the proceeding as their rights may be directly affected.
The wife’s application for joinder of the proposed second and third respondents was opposed by the husband.
Ms C, the proposed second respondent, is aged approximately 66 years and lives in Country G. She did not appear at the hearing on 17 June 2022 despite the order made 16 March 2022 that she so attend. On the morning of the hearing, the husband emailed a medical certificate to chambers which stated that Ms C “suffers anxiety”. The medical certificate was not filed, nor translated in accordance with r 2.17 of the Family Law Rules. Upon the hearing, the husband submitted that Ms C had also suffered a number of strokes; was physically unfit to attend; and did not understand English. Counsel for the wife submitted that Ms C, had in the past, the responsibility of caring for the husband’s grandmother, who the wife believes is now in an aged care facility. Otherwise, counsel for the wife had no knowledge as to the state of health of Ms C.
There is no probative evidence before the Court as to any of Ms C’s health issues, whatever they may be, causing her an inability to attend the hearing by video link. She simply failed to appear. I am satisfied Ms C is aware of the application of the wife for the joinder of her to the proceeding.
Ms D did attend the hearing by video link and indicted orally, her opposition to joinder.
Joinder of Ms C
It is a fact not in dispute that the husband sent some part of the parties’ funds overseas. It is not in dispute that the husband has failed to disclose his application of those funds. The wife alleges that some of those funds were transferred by the husband to Ms C. The wife has now become aware of the fact that there is an apartment in the Country B, that the husband and his partner stay at occasionally, which is registered in the name of the husband’s mother. It is the husband’s evidence that his mother is a private person and that she will not allow him to disclose the address of the apartment. The wife seeks this information to enable the wife to undertake a title search.
Order 7 of the orders made 16 March 2022 required the husband to disclose the address of the apartment by no later than 4pm on 23 March 2022. The husband has not complied with this order. When asked by the Court during the hearing what the address was, the husband submitted that he does not know the address. This seemed extraordinary given Ms D’s subsequent admission that she and the husband had stayed at the property on occasion.
In these circumstances, I am satisfied that it is necessary to join Ms C to the proceeding to determine the application and/or location of the funds the husband allegedly transferred to his mother, and whether the parties or either of them have an equitable and/or legal interest in the apartment in the Country B.
Joinder of Ms D
Counsel for the wife submitted that the husband has also transferred some of the parties funds to Ms D. The wife was required to subpoena the husband’s bank statements, which indicated that the husband had transferred $33,200 on 19 May 2021 from his Commonwealth Bank Account to Ms D’s account, plus an additional approximate $25,000 at an earlier date.
The husband’s evidence is now that he transferred the funds, as claimed by the wife, to Ms D’s bank account as he did not have a personal bank account in the Country B at the time. Upon opening a bank account in the Country B, he claims the subject monies were transferred out of Ms D’s account and put into his personal bank account newly established.
I am satisfied in the circumstances as described above that it is necessary to join Ms D as a Third Respondent to the proceeding. That may be necessary only to the extent of her providing to the parties all bank statements in her sole name for the period from 14 May 2021 to date. Upon her compliance with an order that shall be made to that effect, Ms D can be removed from the proceeding in the absence of the wife making any application to maintain the joinder upon the wife’s inspection of the discovered documents. Such application should be made by the wife within 21 days of such inspection.
Application in a proceeding filed 23 May 2022
The husband filed an Application in a Proceeding seeking orders that the wife’s father by joined as a Second Respondent, the wife’s brother be joined as Third Respondent and that two of the wife’s friends be joined as the Fourth and Fifth Respondents. In addition he also sought orders relevantly for further disclosure from the wife, and discovery of the wife’s overseas accounts.
On 10 December 2021, Judge Harland made an order that the parties comply with the Central Practice Direction – Family Law Case Management, in particular paragraphs 5.1-5.20. Subsequently, Notation F of the orders made 16 March 2022 reminded the parties of their obligation in accordance with that Central Practice Direction (though wrongly referred to as a Rule of the Court) to seek the leave of the Court to file any further interlocutory applications. The husband did not comply with that Central Practice Direction. Further, he did not formally seek such leave upon the hearing but I note that he was a self-represented litigant. The wife sought that leave not be granted and that the husband’s application be dismissed. I do not grant such leave in the circumstances.
Even if leave was granted by the Court, there would be no utility in that as the husband’s application would be dismissed for the following reasons:
(a)the husband failed to serve his documents on the proposed respondents in accordance with rule 3.04(5)(b)-(c) of the Family Law Rules;
(b)there was no evidence before the Court supporting the husband’s submissions that he had sent the material to the wife’s father and brother via registered mail. There was also no concession made by the wife in this regard;
(c)there was no basis to join any of the proposed parties as:
(i)the dispute as to whether monies given to the wife by each of the proposed parties are a gift or loan, or monies belonging to the wife, is an issue for trial;
(ii)it was submitted by counsel for the wife that the proposed parties will be on affidavit for the final hearing. Those persons will be available, if required by the husband, to be cross-examined at trial as to the contents of their affidavit material and/or further relevant material;
(iii)the husband is able to issue any necessary subpoenas in respect of his claims where appropriate;
(iv)there is no asserted cause of action stated against any of these persons, or rights held by them that require joinder; and
(d)in accordance with the orders made 25 February 2022 and 16 March 2022, the wife is required to provide discovery. It is the wife’s evidence that she has complied with such orders and all such material was provided by her solicitors to the husband’s former solicitor on or about 2 June 2022.
All of the above matters make the joinder of those persons sought to be joined as a party ‘unnecessary’.
COSTS
The wife sought that the husband pay her costs on an indemnity basis in the following sums:
(1)$7,293 in accordance with the Orders made 16 March 2022 which reserved and fixed costs in this sum;
(2)$5,335.55 in respect of costs incurred by her in replying to the husband’s Application in a Proceeding filed 23 May 2022; and
(3)$6,103.50 for her costs of the interim hearing of 17 June 2022 including counsel’s fees.
Alternatively, the wife sought costs on a party/party basis for replying to the Application in a Proceeding filed 23 May 2022 and for the interim hearing on 17 June 2022 fixed in the sum of $7,966.22 in accordance with Schedule 3 of the Family Law Rules.
The general rule, pursuant to s 117(1) of the Act, is that each party to the proceeding bear their own costs. However, if the Court is satisfied that there are circumstances justifying an order for costs, after having considered the matters in s 117(2A) of the Act, the Court may make such order that it deems just.
Section 117(2A) outlines that the Court should have regard to:
(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.
Neither party is in receipt of Legal Aid.
The wife is a qualified health care professional and is earning on her evidence approximately $70,000 per annum. The wife receives no child support from the husband for the parties’ two children. The wife and children live in a rental property in Suburb J.
The husband has been living in the Country B with his new partner since 28 May 2021. Prior to departing Australia, the husband was previously self-employed as a tradesman. His taxable income for the financial year ending 2020 was $25,922. It is the husband’s evidence that he is currently unemployed. The wife alleges that the husband operates a business, “Company K”, which is denied by the husband. It is his evidence that it is a website only and earns nil income. There was no evidence before the Court that the husband receives any government assistance from the Country B government. The husband has access to the funds transferred by him from Australia as described above in these reasons.
The husband has been wholly unsuccessful.
I am satisfied that there are circumstances in this case which justify an order for costs. The method for calculating those costs are set out in r 12.17 of the Family Law Rules. The Court may make an order that a party is entitled to a specific amount, as assessed on a particular basis such as party and party, solicitor and client or indemnity basis, in accordance with the method specified in the order, or for part of the proceeding, or part of an amount assessed in accordance with Schedule 3 of the Family Law Rules. Rule 12.17(3) sets out various matters the Court may consider when calculating the costs as follows:
(3) In making an order under subrule (1), the court may consider the following:
(a) the importance, complexity or difficulty of the issues;
(b)the reasonableness of each party’s behaviour in the proceeding including by having regard to the matters set out in subrule 12.08(2);
(c) the rates ordinarily payable to lawyers in comparable proceedings;
(d)whether a lawyer’s conduct has been improper, unfair, unreasonable or disproportionate;
(e)the time properly spent on the proceeding, or in complying with pre‑action procedures;
(f)whether expenses (paid or payable) are fair, reasonable and proportionate.
The general rule when the Court makes an order for costs is that costs will be payable on a party and party basis. However, the Court has a discretion to order costs on an indemnity basis or in some other terms.
The Full Court of the Family Court of Australia in Kohan & Kohan [1993] FLC 92-340 observed that the Court "…should not depart lightly from the ordinary rules relating to costs between party and party and the circumstances justifying the departure should be of an exceptional kind".[2]
[2] Kohan & Kohan [1993] FLC 92-340 at 79,614.
In Munday v Bowman [1997] FLC 92-784 at page 84,660, Holden CJ summarised the circumstances which might warrant an order for indemnity costs as identified by Shepherd J in the decision of Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225. They included the following:
•Where an action has been commenced or continued in circumstances where a party properly advised should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts;
•The making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud;
•Evidence of particular misconduct causing loss of time to the court and to other parties;
•The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions;
•An imprudent refusal of an offer to compromise.
Those circumstances which might support an order being made on an indemnity basis are not closed.[3]
[3] Yunghanns & Yunghanns [2000] FLC 93-029.
In the exercise of its discretion the Court shall make an order that the husband pay the costs of the wife for the hearing on 17 June 2022 including the costs of and incidental to the husband’s Application in a Proceeding filed 23 May 2022 on a party/party basis and fixed in the sum of $7,966.22. The Court is particularly mindful that the husband has been wholly unsuccessful in those competing applications. The question of the wife’s costs of the proceeding on the 16 March 2022 in the sum reserved shall remain reserved to the final hearing to enable the parties to address that issue.
I certify that the preceding fifty-one (51) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hartnett. Associate:
Dated: 7 July 2022
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