LEONG & GHAZI

[2014] FCCA 1589

FEDERAL CIRCUIT COURT OF AUSTRALIA

LEONG & GHAZI [2014] FCCA 1589

Catchwords:
FAMILY LAW – Divorce – where there were proceedings in both Australia and Malaysia – whether Australia a forum non conveniens – lis alibi pendens – where wife brought a Divorce Petition in Malaysia – where husband subsequently filed an Application for Divorce in Australia – where Malaysian High Court held to have jurisdiction – whether Application for Divorce in Australia commenced for an ulterior purpose.   

FAMILY LAW – Costs – whether an order for costs should be made – whether indemnity costs appropriate – abuse of process.  

Legislation:

Family Law Act 1975 (Cth), ss.48, 117

Cases cited:
Colgate-Palmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 225; 118 ALR 248
In the Marriage of Kohan (1992) 16 Fam LR 245; (1993) FLC 92-340
Prantage & Prantage [2013] FamCAFC 105; (2013) 49 Fam LR 197; FLC 93-544

Applicant: MR LEONG

Respondent: MS GHAZI

File Number: SYC 7790 of 2010

Judgment of: Judge Scarlett

Hearing date: 8 April 2014

Date of Last Submission: 8 April 2014

Delivered at: Sydney

Delivered on: 23 July 2014

REPRESENTATION

Solicitor for the Applicant: Ms Franklin Bell

Solicitors for the Applicant: Franklin Bell Family Lawyers

Solicitor for the Respondent: Ms Navarro

Solicitors for the Respondent: Navarro & Associates

ORDERS

1. The Application for Divorce filed on 21 May 2012 is dismissed.

2. The Applicant is to pay the Respondent’s costs of the Application as assessed or taxed on an indemnity basis.

IT IS NOTED that publication of this judgment under the pseudonym Leong & Ghazi is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYC 7790 of 2010

MR LEONG

Applicant

And

MS GHAZI

Respondent

REASONS FOR JUDGMENT

Application

1. This is an application for costs arising out of divorce proceedings between the parties, which took place in both Australia and Malaysia. The Respondent, the former wife, seeks an order that the Applicant should pay her costs.

2. The Applicant does not agree.

Background

1. The Wife’s solicitor prepared a comprehensive chronology which was handed up in Court on 8^th April and this background summary has been prepared largely by reference to this chronology.

2. The parties were born in Malaysia. The Husband, as he was, became a permanent resident of Australia. The wife had no such status but worked in Australia.

3. The parties were married in [omitted] in Malaysia on [omitted] 2008.

4. There is one child of the marriage, who was born on [omitted] 2010.

5. The parties separated on 17^th November 2010 when the Wife left the former matrimonial home with the child.

6. On 10^th December 2010 the Husband commenced proceedings in this Court[1] seeking an order that the parties were to be restrained from removing or attempting to remove the child from the Commonwealth of Australia and that the Australian Federal Police should place the child’s name on the Airport Watch List, as it was then called.[2]

   [1] The Court was then known as the Federal Magistrates Court, but its name was changed to the Federal Circuit Court of Australia on 12 April 2013. 

   [2] The Australian Federal Police now refer to the list as the Family Law Watchlist.

7. On 15^th March 2011, the parties entered into Consent Orders providing that:

   a)The child would live with the Wife;

   b)The child would live with the Wife until 18^th March 2011, when the child would then be in the care of the Husband whilst the Wife was overseas; and

   c)The parties were restrained from removing or attempting to remove the child from Australia; and

   d)The parties were restrained from attempting to obtain either a Malaysian passport or an Australian passport for the child.

8. The Wife left Australia for Malaysia that same day, according to the Husband[3] and remained away until 15^th May 2011.

   [3] Affidavit of [Mr Leong] 15.11.2011 at [15]

9. On 11^th April 2011, whilst she was in Malaysia, the Wife filed a Divorce Petition at the High Court of Malaya at [omitted].

10. On 26^th July 2011 the Wife filed an Amended Response in this Court seeking parenting and property orders and an order for interim spousal maintenance.

11. The parties attended a conciliation conference before a Registrar on 15^th September 2011. On that date they entered into final consent orders in respect of property matters.

12. On 18^th November 2011, the Husband filed an Application in a Case seeking parenting orders and an injunction in these terms:

    That the Respondent be and is hereby restrained from seeking Orders in relation to the breakdown of the marriage in Malaysia or any overseas Court and that she do all acts and things to withdraw the proceedings in the High Court of Malaya at [omitted] proceedings number [omitted].

13. In his supporting affidavit of 15^th November 2011 the Husband deposed that on 18^th October 2011 he had been served with the Wife’s Divorce Petition, in which she sought:

    a)Dissolution of the marriage;

    b)Maintenance of $A500.00 per week;

    c)General damages for pain and suffering and mental distress from an assault claimed to have been committed by the Husband; and

    d)“that the issues incidental to care and custody of the Child, maintenance for the Child, matrimonial assets in Australia and other issues related to the living and benefit of the child to be dealt with in the proceedings in Federal Magistrates Court of Australia vide Court File No. (P)SYC7790/2010   and the Petitioner be given liberty to file any application to give effect to the reciprocal of orders and/or directions made by the Federal Magistrates Court of Australia within the jurisdiction of this Honourable Court”.

14. On 5^th and 8^th January 2012 the Husband filed summonses in the High Court of Malaya seeking to have the Wife’s Divorce Petition dismissed for want of jurisdiction.

15. Those summonses were dismissed by the High Court of Malaya on 10^th May 2012.

16. On 11^th May 2012 the parties entered into Consent Orders in this Court providing that:

    a)The Husband was to have sole parental responsibility for the child;

    b)The child was to live with the Husband;

    c)The Wife was to spend time with the child by arrangement between the parties;

    d)The Wife was restrained from removing the child from the Commonwealth of Australia and the Australian Federal Police were to place the child’s name on the Watch List;

    e)The Husband was permitted to remove the child from Australia and the Watch List order would not apply if the Husband wished to leave the jurisdiction with the child;

    f)The Wife was to give the Husband 7 days’ notice of her availability to spend time with the child and the Husband was to respond within 3 days confirming and appointing a suitable time;

    g)(Importantly) all other applications were withdrawn and dismissed; and

    h)No order for costs.

17. On 21^st May 2012 the Husband filed an Application for Divorce in this Court, returnable on 3^rd July 2012.

18. On 31^st May 2012 the Husband filed an Appeal to the Court of Appeal in Malaysia seeking dismissal of the Wife’s Divorce Petition.  

19. The Husband’s Application for Divorce in this Court did not proceed on 3^rd July 2012 and was adjourned to 4^th September 2012.

20. On 24^th August 2012 the Wife filed a Response in this Court to the Husband’s Application for Divorce, supported by an affidavit from the Wife’s solicitor, Ms Navarro.  

21. On 4^th September 2012 the Application for Divorce was transferred to me for hearing.

22. On 11^th September the husband’s Appeal was dismissed by the Court of Appeal.

23. The Application for Divorce was listed for mention before this Court on 22^nd October and stood over to 6^th November. On that date the Husband’s solicitors made submissions in support of the Husband’s claim that the Divorce should proceed in Australia. The Court heard final submissions on that issue on 13^th December 2012 and noted that the Husband had sought leave to appeal in the Federal court in Malaysia.

24. The Husband’s application for leave to appeal was dismissed by the Federal Court of Malaysia on 10^th January 2013. The Wife’s divorce petition was therefore to be heard by the High Court of Malaya at [omitted].

25. On 8^th December 2013 the High Court of Malaya pronounced a Decree Nisi which was made absolute immediately. The parties entered into Consent Orders in respect of the Wife’s claims for ancillary relief and costs.

26. The Husband’s Application for Divorce was listed for mention before this Court on 3^rd March 2014. On that occasion the Court was advised that the parties had been divorced in Malaysia and that Consent Orders had been made in respect of the ancillary matters. A copy of the Decree Nisi made by the High Court of Malaya at [omitted] was filed in Court.

27. The proceedings were adjourned to 8^th April 2014 for further mention.

28. On that date, the Court heard submissions as to costs.

Evidence and Submissions

1. The Wife relied on the following:

   a)A Chronology and List of Documents; and

   b)The affidavit of Adriana Ester Navarro, the Wife’s solicitor, affirmed 8^th April 2014.

2. Ms Franklin-Bell, for the Husband, submitted that it could not be said that the Husband’s Application for Divorce had failed. It was never an application without jurisdiction. The Wife had sought damages and spousal maintenance with her Divorce Petition. This Court had jurisdiction to make a divorce order.

3. Ms Navarro submitted that the Husband’s Application for Divorce filed in this Court was, in effect, “forum shopping”, and duplicating proceedings already on foot. She sought an order for costs on an indemnity basis.

4. Ms Navarro deposed in her affidavit of 8^th April 2014 that she had on several occasions notified the Husband’s lawyers of her client’s intention to seek a costs order. She annexed to her affidavit copies of correspondence to the husband’s solicitors between 2^nd July 2012 and 7^th April 2014 relating to costs.

5. Significantly, the Wife’s solicitors’ letter of 2^nd July 2012 referred to the Husband’s Application for Divorce filed on 21^st May 2012, saying:

   We believe his Application for Divorce is an abuse of process as the husband is aware and accepted the determination of the High Court of Malaya. We request that the husband immediately withdraws his current Application for Divorce filed on 21.5.12.

   We are also surprised at the husband’s failure to disclose, in question 20 of his Application for Divorce, the ongoing nature of the proceedings before the High Court of Malaya or its findings in favour of jurisdiction to hear the Application for Divorce filed by the wife in April 2011. We believe the husband may have committed perjury in not disclosing those proceedings in his Application for Divorce. Please be advised that should the husband fail to withdraw this application, the wife will defend same and seek orders for indemnity costs against the husband.[4]

   [4] Affidavit of A.E. Navarro 8.4.2014 Annexure A”

6. In that same letter Ms Navarro advised that “The wife has left Australia for good”.[5]

   [5] Ibid

7. On 30^th July 2012 Ms Navarro wrote to the Husband’s solicitor advising that a Response and supporting affidavits would be filed when received from overseas. The letter also said:

   Please be advised that our client will seek a costs order against Mr Leong as she is of the view that his Application for Divorce is frivolous, vexatious and without merits…She will seek indemnity costs.[6]

   [6] Ibid Annexure “B”

8. On 1^st August 2012 the Wife’s solicitors again wrote to the husband’s solicitors, enclosing an unsealed copy of the Wife’s Response. The letter also enclosed a copy of the Transcript of proceedings before Monahan FM[7] on 11^th May 2012.

   [7] Now Judge Monahan

9. In that letter, Ms Navarro concluded by saying:

   We invite the husband to withdraw his Application for Divorce forthwith to avoid further costs. We will consent to that withdrawal provided the husband also consents to an order for indemnity costs in our client’s favour.[8]

   [8] Affidavit of A.E. Navarro 8.4.2014 Annexure “C” 

Costs

1. When determining whether an order for costs should be made, the Court is required to consider the matters set out in s.117(2A) of the Family Law Act 1975 (Cth). If the Court is of the opinion that there are circumstances that justify making an order for costs, the Court should then consider the quantum of those costs.

2. It is well-established that the usual rule is that costs, when awarded, are made on a party and party basis. There are various authorities to that effect, including In the Marriage of Kohan[9]; Colgate-Palmolive Co v Cussons Pty Ltd[10], and, more recently, Prantage & Prantage[11].

   [9] (1992) 16 Fam LR 245; (1993) FLC 92-340

   [10] [1993] FCA 536; (1993) 46 FCR 225; 118 ALR 248

   [11] [2013] FamCAFC 105; (2013) 49 Fam LR 197; FLC 93-544

3. In Colgate-Palmolive v Cussons, Sheppard J held that there should be some special or unusual feature in the case to justify the Court in departing from the ordinary practice. His Honour noted some of the circumstances which have been thought to warrant the exercise of the discretion, including:

   a)The making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud;

   b)Evidence of particular misconduct that caused loss of time to the Court and to other parties;

   c)The fact that the proceedings were commenced or continued for some ulterior motive or in wilful disregard of known facts or clearly established law;

   d)The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions;

   e)An imprudent refusal of an offer to compromise; and

   f)An award of costs on an indemnity basis against a contemnor.[12]

   [12] [1993] FCA 536 at [24]

Conclusions

1. There is no doubt that both this Court and the High Court of Malaya had jurisdiction to hear divorce proceedings between the parties. The Husband is domiciled in Australia as he is a permanent resident of this country. There had already been proceedings in this Court under the Family Law Act which had come to an end on 11^th May 2012.

2. It is also quite clear from the history of the proceedings in Malaysia that the Courts of that country had jurisdiction. The High Court had dismissed the summonses brought by the Husband challenging the Court’s jurisdiction on 10^th May 2012. His appeal against that decision was dismissed by the Court of Appeal on 11^th September 2012. His Application for leave to Appeal to the Federal Court of Malaysia was dismissed on 10^th January 2013. The finding that the Courts in Malaysia had jurisdiction was conclusively decided.

3. The timing of the competing divorce applications is, to my mind, of great significance.

4. The parties had separated in Australia on 17^th November 2010. The Wife filed her Divorce Petition on 11^th April 2011. She also sought ancillary relief, including damages, which she could not have sought under the Family Law Act. .

5. It was not open to either party to commence divorce proceedings in Australia at that time, as they had not been separated for the necessary period of “not less than 12 months immediately preceding the date of the filing of the application for the divorce order” (Family Law Act 1975, s.48(2)). The earliest date on which an application for Divorce could have been filed in Australia was 18^th November 2011.

6. As it was, the Husband did not file his Application for Divorce until 21^st May 2012. This was ten days after he had entered into Consent Orders in this Court resolving the parenting issues with his wife and also the anti-suit injunction.

7. Ten days after that, on 31^st May 2012, the Husband filed his Appeal to the Court of Appeal.

8. It is instructive to read the affidavit of Muhammad Arif Bin Shaharuddin sworn 12^th August 2013 and filed as part of the Wife’s case.

9. Mr Shaharuddin is a Malaysian lawyer who has been acting for the wife in her Divorce proceedings in Malaysia. In his affidavit he deposed:

   13.In my opinion and based on case law only, should the Federal Circuit court of Australia grant a divorce, it would adversely affect Ms Ghazi’s divorce Petition in Malaysia and would render the Petition in Malaysia redundant. This is because Malaysian courts have discretion to recognise the judgment of foreign courts…

   16.Should a Grant of divorce be issued in Australia before [Ms Ghazi’s]Petition is determined in Malaysia, Ms Ghazi’s associated petitions for damages for pain and suffering and spousal maintenance would be rendered nugatory.[13]

   [13] Affidavit of M.A.B. Shaharuddin 12.8.2013 at [13] & [16]

10. It appears that the Husband’s Application for Divorce was brought for a purpose other than ending the marital relationship. If the Husband could get his Application heard first, the making of a Divorce Order in this Court would appear to have the effect of cutting the ground from under the Wife’s feet in respect of her application for ancillary relief.

11. The Husband exercised all of his rights to appeal in respect of his claim that the Courts in Malaysia did not have jurisdiction, but the timing of the filing of his Application for Divorce in Australia leads to the inference that it was a tactical ploy to defeat the wife’s claims for spousal maintenance and general damages.

12. It is noteworthy that the draft Decree Nisi handed up in this Court on 3^rd March 2013 shows that Orders were made by consent that:

    a)The Wife would not claim maintenance against the Husband;

    b)The Husband would not claim maintenance against the Wife;

    c)Matters relating to the guardianship, custody, care and control and maintenance of the child were to remain under the jurisdiction of the courts or tribunals in Australia;

    d)It was noted that financial matters between the parties had been settled by the Consent Order made in this Court on 15^th  September 2011;

    e)The Wife’s claim for general damages against the Husband was withdrawn; and

    f)The Husband was to pay the Wife’s costs awarded by the Court of Appeal of Malaysia in the sum of RM5,000 within fourteen days.

13. The ancillary relief claimed by the Wife was, in the end, never litigated on a defended basis.

14. In my view, the Husband’s Application for Divorce was brought for a purpose other than obtaining a speedy divorce. If he wanted to be divorced quickly and expeditiously, he could have presumably have not consented to the Wife’s petition or he could have filed an Application for Divorce in this Court on or immediately after 18^th November 2011, not in May 2012.

15. As I am satisfied that the Application for Divorce brought in this Court was an abuse of the Court’s process, it follows that the Husband should pay the Wife’s costs. His Application for Divorce is of no effect, as the parties have been divorced in Malaysia, and it should be dismissed.

16. I have had regard to the matters set out in s.117(2A) of the Act, in particular:

    a)the conduct of the parties to the proceedings;

    b)the fact that the Husband has been wholly unsuccessful; and

    c)the fact that the Wife’s solicitors made offers in writing to settle the matter by inviting the Husband to withdraw his Application for Divorce as early as 2^nd July 2012.

17. Consequently, I am of the opinion that there are circumstances that justify the Court in making an order that the Husband should pay the Wife’s costs of the divorce proceedings.

18. As it appears to me, for the reasons referred to above, that the Application for Divorce was commenced not for the purpose, or not just for the purpose, of obtaining a divorce, but as a way of frustrating the Wife’s claim for ancillary relief in the High Court of Malaya. Consequently, I am satisfied that the Application for Divorce constituted an abuse of the Court’s process.

19. Abuse of process is quintessentially a matter that warrants an order for costs on an indemnity basis.

1. Orders will be made that the Applicant Husband is to pay the Respondent Wife’s costs on an indemnity basis as assessed or taxed. The Application for Divorce will be dismissed.            

I certify that the preceding sixty-two (62) paragraphs are a true copy of the reasons for judgment of Judge Scarlett

Associate: 

Date:  23 July 2014