Liang & Zedong

Link copied
Case Copied 18 min read

Federal Circuit and Family Court of Australia

(DIVISION 1)

Liang & Zedong [2022] FedCFamC1F 920

File number(s): MLC 3691 of 2020
Judgment of: HARTNETT J
Date of judgment: 25 November 2022
Catchwords: FAMILY LAW –  COSTS – Application for indemnity costs – Where the original proceeding has settled – Where the second respondent in the substantive proceedings seeks indemnity costs against the applicant wife in the substantive proceedings – Where the second respondent alleges psychological and medical distress – Where the second respondent claims an offer made by her – Where the second respondent alleges she was incorrectly joined to the proceedings – Where the applicant wife claims the second respondent was a necessary party – Where the applicant wife claims indemnity or other costs in respect of the second respondent’s application for costs – Order for costs in favour of the applicant wife in the substantive proceedings on an indemnity basis
Legislation:

Family Law Act 1975 (Cth) ss 79, 117

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 2.17, 5.04, 11.01 12.13

Cases cited:

Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225

Collins and Collins (1985) FLC 91-603

Kohan & Kohan (1993) FLC 92-340

Loomis v ML Lawyers (2016) FLC 93-731

Munday v Bowman (1997) FLC 92-784

Penfold v Penfold (1980) 144 CLR 311

Sfankianakis & Sfankianakis [2019] FamCAFC 54

Yunghanns & Yunghanns (2000) FLC 93-029
Division: Division 1 First Instance
Number of paragraphs: 42
Date of last submissions: 19 October 2022
Date of hearing: 16 November 2022
Place: Melbourne
The Applicant: Litigant in person
Counsel for the Respondent: Mr Schmidt
Solicitor for the Respondent: Prudentia Legal

ORDERS

MLC 3691 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MS LIANG

Applicant
AND:

MS ZEDONG

Respondent

order made by:

HARTNETT J

DATE OF ORDER:

25 November 2022

THE COURT ORDERS THAT:

1.The second respondent, the applicant in Application in a Proceeding filed 22 August 2022, pay the costs of the applicant wife, the respondent to the Application in a Proceeding, on an indemnity basis fixed in the sum of $10,680.

2.There be a stay on such payment of 28 days.

3.Otherwise, all extant applications are dismissed and the matter removed from the list.

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 Liang & Zedong has been…

CaseChat AU logo

Keep reading for free

Create a free CaseChat account to read Liang & Zedong and more:

  • Read every judgment in full
  • Ask AI and get answers linked to paragraphs
  • See how each paragraph was cited in later cases
  • Download judgments as PDF or Word
Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details
Case
[2022] FedCFamC1F 920
Decision Date

CaseChat Overview and Summary

The case of Liang & Zedong involved the wife seeking indemnity costs from the second respondent, who was joined as a party in the substantive proceedings due to her status as a joint proprietor of certain properties. The dispute centered on whether the second respondent was a necessary party and whether she was entitled to indemnity costs for alleged psychological and medical distress, an offer she made to settle the proceedings, and the wife's conduct that allegedly caused delays. The court had to determine the appropriate costs order based on the wife's entitlement to indemnity costs and the second respondent's claims.

The central legal issue was whether the second respondent, who was a joint proprietor of the properties but not a party to the marriage, should be considered a necessary party and whether she was entitled to indemnity costs. The court examined the Federal Circuit Court Rules and the Family Law Act to assess the necessity of joining the second respondent and considered the second respondent's claims of distress and delay. The wife argued that the second respondent was a necessary party due to her status on the property titles and sought indemnity costs for the second respondent's application.

The court found that the second respondent was indeed a necessary party as she was a registered proprietor of the property in which the wife claimed an interest. Despite being a stranger to the marriage, her presence on the title made her inclusion in the proceedings necessary. The court also considered the second respondent's claims of distress and delay but found them unsubstantiated. The wife had clearly warned the second respondent that she would seek indemnity costs if the application proceeded. Given the second respondent's imprudent and wilful behavior in proceeding with the application, the court deemed an award of party/party costs insufficient and awarded indemnity costs to the wife, albeit reduced by $3,000 due to the excessive quantum of solicitors' costs claimed.

The court ordered that the second respondent pay the wife's costs of the Application in a Proceeding on an indemnity basis, fixed at $10,680, with a stay on payment for 28 days. All other applications were dismissed, and the matter was removed from the list.

Orders

Orders of the court

THE COURT ORDERS THAT:

1. The second respondent, the applicant in Application in a Proceeding filed 22 August 2022, pay the costs of the applicant wife, the respondent to the Application in a Proceeding, on an indemnity basis fixed in the sum of $10,680.

2. There be a stay on such payment of 28 days.

3. Otherwise, all extant applications are dismissed and the matter removed from the list.

Background

Background to the litigation

The wife sought that the second respondent’s Application in a Proceeding be dismissed and the second respondent pay the wife’s costs of and in respect to the Application in a Proceeding, on an indemnity basis, or otherwise party/party basis, as set out in the Response to an Application in a Proceeding filed by the wife on 12 September 2022.background During the marriage between the wife and the first respondent (“the husband”), they acquired, in the husband’s sole name and subject to a mortgage, a real property situated at C Street, Suburb D. Following the separation of the husband and wife in or about June 2014, the husband acquired an interest in two further real properties (each subject to a mortgage), at E Street Suburb F, purchased by he and the second respondent in early 2016, and G Street, Suburb H, Queensland purchased by he and the second respondent in early 2018. The funds used by the husband to acquire the Suburb F property and the Suburb H property were, as argued by the wife, funds belonging at least in part, to each of the husband and the wife, as acquired by them, during their marriage. Around the time of purchase of the Suburb F property, the second respondent and the husband had married. The second respondent was on title to both properties. The husband and the second respondent were on title to Suburb F as joint proprietors, and on title to the Suburb H property as tenants in common. When the husband and the second respondent first acquired the Suburb H property, they were registered as joint proprietors. The husband deposed in his first affidavit filed in the proceedings, to altering the holding as a result of the wife’s application pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”) being foreshadowed.[1][1] Affidavit of Mr K filed 28 May 2020, paragraph 22. The husband’s legal and/or equitable interests in the three real properties comprised the entire quantifiable pool of property available for adjustment between the wife and the husband in the substantive proceedings. The fact that the second respondent and the husband were separated at the time of the institution of the substantive proceedings, was not known to the wife until one year into the proceedings, when it became apparent during discovery, that a financial agreement between the second respondent and the husband existed. At all relevant times however, the second respondent and the husband were on title to the Suburb F property and Suburb H property. Despite being separated, a matter the second respondent considered should have excluded her from the proceedings, the fact the second respondent was on title to property the subject of the proceedings, meant the wife had an obligation to name her as a respondent to the substantive proceedings.[2] The second respondent was a necessary party.[2] Federal Circuit Court Rules 2001 (Cth) r 11.01. In support of her application, the second respondent contends essentially, three things. The first, that she made an offer to settle the substantive proceedings; the second, that as a stranger to the marriage between the parties, she ought not to have been joined to the proceedings; and the third, that the wife’s conduct caused delay in the proceedings. The fact the second respondent was a stranger to the marriage between the husband and wife was of no consequence for the reasons given in the preceding paragraph, namely, the second respondent was a registered proprietor of property in which the wife claimed an interest.Material relied upon

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Pursuant to r 12.13 of the Rules a party applying for costs on an indemnity basis must inform the Court if that party is bound by a costs agreement in relation to those costs and the terms of that agreement. The wife entered into a costs agreement with Prudentia Legal on 14 February 2019. Mr Andrew Zhu (“Mr Zhu”) as partner of Prudentia Legal has an hourly rate from $600 per hour plus GST. Mr Zhu has worked with a junior solicitor who has an hourly rate of $300 per hour plus GST. conclusion Prior to the filing of the Application in a Proceeding the second respondent was advised by the wife that the wife would seek indemnity costs if the second respondent proceeded with such an application. The second respondent was very clearly on notice. The Application in a Proceeding was not only filed but proceeded with. The second respondent was represented throughout that process and up until the hearing date of the Application in a Proceeding by solicitors. Given the above matters as set out in these reasons, I consider an award of party/party costs is not sufficient and that it would be inequitable to have the wife pay for the second respondent’s imprudent and wilful behaviour. However, I also consider, that for an application of this type, the quantum of solicitors’ costs is excessive and I propose to reduce such costs claimed by an amount of $3,000. In my view, and in the exercise of my discretion, a costs order of $10,680 is justified.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.