LAO & CXUE

[2015] FamCA 247

FAMILY COURT OF AUSTRALIA

LAO & CXUE [2015] FamCA 247

FAMILY LAW – DISCOVERY – COSTS

Family Law Act 1975 (Cth)

APPLICANT: Ms Lao

RESPONDENT: Mr Cxue

JOINED PARTIES: Mr B, Mr C, Mr D and
Mr E

FILE NUMBER: MLC 2038 of 2014

DATE DELIVERED: 27 February 2015

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 27 February 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Mellas

SOLICITOR FOR THE APPLICANT: Francis Lim Barristers & Solicitors

COUNSEL FOR THE RESPONDENT: Ms Dellidis

SOLICITOR FOR THE RESPONDENT:

:

Mills Oakley Lawyers Pty Ltd

COUNSEL FOR THE JOINED PARTIES: Mr Matta

SOLICITOR FOR THE JOINED PARTIES: Rotstein Commercial Lawyers

Orders

1. That the wife pay the husband’s costs on an indemnity basis of $5340 plus further costs for the affidavit referred to by counsel and the correspondence for the period between 13 February 2015 and 25 February 2015.

2. That the Husband execute an authority in favour of his solicitor, John Mazzotta of Mills Oakley in terms of Exhibit “A” annexed hereto, directed to:

   (a)HSBC Bank in Hong Kong;

   (b)China Citic Bank International Limited (Citic) in Hong Kong; and

   (c)Industrial and Commercial Bank of China (ICBC) in China.

3. The costs associated with communicating with the abovementioned banks and obtaining any documents be met from the funds held in trust by Mills Oakley Solicitors.

4. The Wife’s Application in a Case filed 1 October 2014 be otherwise dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Lao & Cxue has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 2038 of 2014

Ms Lao

Applicant

And

Mr Cxue

Respondent

REASONS FOR JUDGMENT

1. This is an application for costs relating to a discrete proceeding before the Court.  I am perplexed as to why there is even a problem here, which is why I have been somewhat hesitant about what the answer is.  The simple facts are that on 16 October 2014, the husband issued five subpoenas to a variety of commercial banking operations.  To my surprise, when I read the documents on 21 October 2014, the wife who was represented by a firm of solicitors filed objections.  The objections are curiously drawn, because they object on the grounds of oppressiveness and on the basis of relevance, apart from anything else.

2. Notwithstanding Mr Mellas’ best shot at trying to defend that position, it is hard to see how anyone in that position could argue either of those grounds in circumstances where there is a primary obligation on a party in this Court to be full and frank in relation to disclosure.  Hence I asked the question of why it was necessary to issue the subpoenas in the first place, and the response – which seems, really, unchallengeable – is that the husband sought the documents and the wife indicated that she had either provided them or did not have them.  That would have, in my view, given the green light to the issuing of the subpoenas on the basis that it was quite appropriate for the husband to pursue.

3. It was particularly relevant in this case, because the husband is apparently asserting that the wife had misappropriated money from either him or from third party lenders.  Hence he rejected her explanation as to what had happened to the money.  This particular objection was adjourned and it seems to have lumbered along side by side with another discovery issue, and I’m assured – and I accept counsel’s assurance – that the costing of the subpoena issue is not overlapping or intermingled with the costs associated with that discrete application.  That is at least clear in relation to counsel’s fees.

4. Section 117 of the Family Law Act 1975 (Cth) (“the Act”) provides that in proceedings in this Court each party shall bear their own costs unless there are circumstances that justify a departure from that rule. In other words, one needs to show that there is a justification for saying that each party who is proactive in seeking the outcome of litigation should not be responsible to have the costs paid out of their share of whatever the property dispute is about. The unusual feature of this is that the wife seems – on what I can understand – to have adopted a position of obfuscating in circumstances where it would have been very easy for her to have said, “If you want to chase the documents at your expense you can do so”.

5. The justifying circumstance here seems to me to be that obfuscation. Before a court, however, can make an order for costs, it has to take into account the matters in s 117(2A) of the Act. Amongst those things included in that section are matters associated with the financial circumstances of the parties. From what I can glean from reading the material, these parties have not only bank accounts here, but internationally as well, so it would be hard for me to view them other than as pecunious as distinct from impecunious. There are no legal aid considerations here, and therefore the main factor in s 117(2A) relates to the question of conduct.

6. As the Full Court in Prantage [2013] FamCAFC 105 said, what the Court needs to look at in the costs application is the conduct of the particular party as a litigant in respect of the way in which the process is conducted. I think it is a rather obvious example where someone should have said to the wife, “There is no basis here to waste the time and costs of the other party, but more importantly, the resources of the Court”. On that basis, I would be more than comfortable in finding that it’s just to make an order to depart from the principle. Accordingly, there will be an order for costs.

7. The question then is what is the appropriate quantum?  Excluding the costs of today, counsel seeks itemised costs of $5340 plus a variety of other costs associated with a number of other matters, including pieces of correspondence.  Those pieces of correspondence have now been admitted into evidence.  I find it somewhat disconcerting to read some of that correspondence, because it tends to suggest that the lawyers were not really focusing on what they should have been focusing, and I direct that at the solicitors for the wife, and not the husband, in relation to the question of how this should have been resolved. 

8. It is for that reason that I was hesitant about making an order for costs on any basis, let alone an indemnity basis, against the wife, but it seems to me that I should draw the inference that the wife knew full well what was happening, and gave instructions for the solicitors to act accordingly.  Certainly, the correspondence from the solicitors for the wife indicates that they were instructed to take those courses.  That is clear, for example, from the email of 25 February. 

9. In this particular case, the question is, should it be on an indemnity basis.  Doing the best I can, it looks to me like the costs being charged to the husband, as indicated in his affidavit, are approximately somewhere between double, or the scale, sorry, is somewhere between one-half and two-thirds of what the husband has been charged.  For those who have read the Full Court decision in Prantage (supra), it is clear that the Court should only depart from the rule in very, very unusual circumstances.  It seems to me this is a circumstance where I should depart from the rule, having regard to the fact that there were repeated warnings about the seeking of costs, and indeed, it seems to me that what occurred here was just unreasonable. 

I certify that the preceding nine (9) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 27 February 2015.

Associate: 

Date:  13 April 2015