Manesh & Manesh (No. 2)
[2021] FamCAFC 47
•12 April 2021
FAMILY COURT OF AUSTRALIA
Manesh & Manesh (No. 2) [2021] FamCAFC 47
Appeal from: Manesh & Manesh [2020] FCCA 1702 Appeal number(s): SOA 62 of 2020 File number(s): MLC 8955 of 2019 Judgment of: STRICKLAND J Date of judgment: 12 April 2021 Catchwords: FAMILY LAW – APPEAL – LEAVE TO APPEAL – Where the principal issue is the order providing monies to both parties by way of partial property settlement – Where the facts propounded in support of the application for leave to appeal are simply inadequate and do not demonstrate any basis for leave to appeal to be granted – Where the grounds of appeal do not identify any appealable error by the primary Judge – Application dismissed.
FAMILY LAW – COSTS – Where the respondent seeks costs calculated on an indemnity basis – Where the applicant was wholly unsuccessful and his appeal was dismissed – Where the circumstances justify an order for costs and there are exceptional circumstances which warrant an order for indemnity costs – Where this Court is not satisfied that all of the charges are either necessary or reasonable – Costs fixed in the sum of $10,000 pursuant to r 19.18(1)(a) of the Family Law Rules 2004 (Cth).
Legislation: Family Law Act 1975 (Cth) s75(2), s 79, s 117
Family Law Rules 2004 (Cth) r 19.18(1)(a)
Cases cited: Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; [1993] FCA 801
Fitzgerald v Fish (2005) 33 Fam LR 123; [2005] FamCA 158
Munday v Bowman (1997) FLC 92-784; 22 Fam LR 321
Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466; [2011] FamCAFC 126
Division: Appeal Division Number of paragraphs: 70 Date of hearing: 17 November 2020 Place: Melbourne by video-link The Applicant: In Person Counsel for the Respondent: Mr Goddard Solicitor for the Respondent: Freeman Family Law ORDERS
SOA 62 of 2020
MLC 8955 of 2019APPEAL DIVISION OF THE FAMILY COURT OF AUSTRALIA
BETWEEN: MR MANESH
Applicant
AND: MS MANESH
Respondent
ORDER MADE BY:
STRICKLAND J
DATE OF ORDER:
12 APRIL 2021
THE COURT ORDERS THAT:
1.The application for leave to appeal be dismissed.
2.The applicant husband pay the costs of the respondent wife of and incidental to the application for leave to appeal and the appeal fixed in the sum of $10,000.
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 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Manesh & Manesh (No. 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
STRICKLAND J
INTRODUCTION
By Further Amended Notice of Appeal filed on 26 October 2020, Mr Manesh (“the husband”) seeks leave to appeal, and if leave is granted, to appeal against a partial property settlement order made by a Judge of the Federal Circuit Court of Australia on 25 June 2020.
The application for leave, and the appeal, if leave is granted, are opposed by Ms Manesh (“the wife”).
The order the subject of the leave application, and the appeal if leave is granted, provided for the husband to cause the monies in certain bank accounts in his name to be distributed $120,000 to the wife, and $120,000 to the husband, both by way of partial property settlement.
RELEVANT BACKGROUND
The parties married in Country C in 1996, and separated in Australia on 13 June 2019.
There are two children of the marriage, with the eldest now over 18 years of age and attending university. He lives with the husband.
The youngest child was aged 12 years at the time of the hearing before the primary Judge, and lives with the wife. She has not spent any time with the husband since the parties separated.
The husband is a consultant, and the wife is not in employment.
The parties have three unencumbered investment properties in addition to the former matrimonial home. Those investment properties are rented out, and they each receive rental income. It is unclear what the husband’s income from his employment is, but for the wife’s part, apart from the rental income, she receives Centrelink benefits.
On 9 August 2019, the wife instituted property settlement proceedings in the Federal Circuit Court of Australia. The husband then filed a Response on 2 October 2019 wherein he not only sought property settlement orders, but also parenting orders.
It is said that the net assets of the parties, excluding superannuation, are valued at in excess of $3.6 million, primarily comprising their investment properties, and the former matrimonial home.
On 8 October 2019, interim orders were made by consent, inter alia, providing for the wife to have the sole use and occupation of the former matrimonial home, for each party to receive $50,000 from a bank account, for discovery, and restraining each party “from encumbering, divesting, selling or reducing their interest in or dealing with any asset standing in their name whether solely or jointly held with another person without each other’s written consent or order of the court or the normal course of business” (paragraph 2.d.).
On 26 March 2020, the wife filed an Application in a Case seeking that by way of partial property settlement each party receive $120,000 from monies held in certain bank accounts, or alternatively that $120,000 be paid into her solicitor’s trust account pending further order, and the husband be restrained from “spending” the other $120,000.
In his Response filed on 28 May 2020, the husband simply sought that the wife’s application be dismissed.
They were the proceedings before the primary Judge, and in respect of which the interim order made by her Honour is the subject of the application for leave, and the appeal, if leave is granted.
LEAVE TO APPEAL
The test that is now applied in this Court is whether in all of the circumstances the decision complained of is attended by sufficient doubt as to warrant it being reconsidered, and whether substantial injustice will result if leave were refused, supposing the decision to be wrong.
The “facts” set out in the Further Amended Notice of Appeal and that are said to demonstrate why leave should be granted, are inadequate. They comprise a narrative which extends over almost three pages, and fail to identify the necessary sufficient doubt about the decision that would warrant reconsideration. The husband simply sets out his complaints about the decision by reference to the case that he ran below.
The only semblance of any basis for doubt that can be gleaned from the narrative is that her Honour failed to adequately take into account s 75(2)(d), (l) or (g) of the Family Law Act 1975 (Cth) (“the Act”). However, the difficulty with that suggestion is that the husband failed to provide the evidence that would be necessary for those paragraphs to be considered. What is put by the husband comprises mere assertions, and only relate to his alleged position.
Further, it is apparent that her Honour, as is required, considered the relevant factors under s 79 and s 75(2) of the Act ([34]). True it is that her Honour did not elaborate on that consideration, but it must not be forgotten that this was an interlocutory hearing conducted during a busy duty list, and for her Honour not to address those sections at any length cannot be considered an error.
As for the issue of substantial injustice, the most that can be taken from the narrative is that the husband suggests that the $120,000 he is to receive is insufficient to meet his expenses and his legal costs, and impliedly he needs to access more of the total amount of $240,000. However, the difficulty with that submission is that, again, the husband failed to provide any satisfactory evidence that that was the case, noting also that he had no legal representation at that time. Further, and I will say more about this later in these reasons, in his Response, the husband did not seek that any of the monies be distributed to him, and significantly, given the injunction made on 8 October 2019, he was unable to access any of the $240,000 to meet living expenses and legal costs, without the consent of the wife or an order of the court.
Thus, the husband has failed to demonstrate any injustice, substantial or otherwise.
In these circumstances there would appear to be no basis for leave to appeal to be granted. However, it is readily apparent that the grounds of appeal raise many of the same issues that are set out in the narrative. Accordingly, I will address those grounds of appeal, because if they have merit, then logically, leave to appeal may be granted.
THE GROUNDS OF APPEAL
Ground 1 – That the trial judge acted on a wrong principle
The first comment to be made is that there is no “principle” identified in this ground, in the summary of argument filed on 26 October 2020, or in any oral submission made to the court. The complaint in fact made is that her Honour did not consider the husband’s financial needs in making the order, and her Honour should have done so by applying s 75(2)(d), (l), (g) and (na) of the Act.
However, as the wife submits, that complaint is ill-founded.
What the wife sought to access was the total amount of $240,000 held in various bank accounts, and for each party to receive $120,000 by way of partial property settlement. Yet, the husband did not seek an order that he have any part of that money, and without an order of the court or the consent of the wife, he could not access any of it for the purposes that he expressed. Thus, he cannot maintain an argument that by making the order his financial needs were not taken into account, because they were not in fact in play.
It is simply not open to the husband to argue that all of the $240,000, or indeed, more than $120,000, should have been retained to enable him to meet his expenses. And curiously for this ground of appeal, the husband now has $120,000 that he did not have access to previously, and that he did not seek.
It is also worth noting, given that this is a ground that alleges her Honour acted on a wrong principle, that her Honour was referred to the leading Full Court decision of Strahan & Strahan(Interim Property Orders) (2011) FLC 93-466 by the wife’s counsel, and it is readily apparent that her Honour applied the principles emanating from that case.
For example, as pointed out by the wife’s counsel in paragraph 2 of the summary of argument filed on 11 November 2020, in that case the Full Court said this at [52]:
The test for an interim order under s.79 must be whether, in all of the circumstances, it is “appropriate”: s.79(1). This requires a consideration of the matters relevant to making a final order under s.79, not the least of which is that the order be “just and equitable”: s.79(2). In order to determine whether or not to exercise, on an interim basis, the power under s.79, the case must be first analysed in terms of s.79 to identify the range of outcomes that may flow in final orders. Whether it is just and equitable to make interim orders will require a balancing of the risks of unduly limiting the final orders that can be made (or even potentially defeating parties’ claims or legitimate expectations) against the circumstances said to show that it is just and equitable to make interim orders.
Although her Honour’s reasons for judgment are brief, when read holistically, it is clear that her Honour correctly considered whether the order sought was “appropriate”, addressed the relevant factors under s 79 and s 75(2) of the Act, and balanced the risks of unduly limiting the final orders ([33] and [34]).
This ground has no merit.
Ground 2 – That the trial judge was influenced by extraneous or irrelevant matters
Again, it is not immediately apparent that the “matters” identified can be described as extraneous or irrelevant. The “matters” set out under this ground of appeal, and expanded on in the husband’s summary of argument filed on 26 October 2020, are as follows:
(1)The wife was in need of funds;
(2)A concern that the husband would “spend” the money;
(3)Despite the parties having net assets of in excess of $3.6 million, excluding superannuation, the husband had “immediate cash needs”, and he will be under extreme financial pressure because he lives in rental accommodation and he needs to “fund the court case”. Further, there will be a need for cash to fund the adjustments required by the final property settlement orders;
(4)Her Honour’s reference to the leading case of Strahan was misplaced because it was “different” to this case.
(5)Her Honour placed too much “emphasis” on the wife’s legal expenses and ignored the husband’s expenses in renting accommodation and in pursuing the case.
Addressing these “matters” in turn as follows.
(1)The wife was in need of funds;
(2)A concern that the husband would “spend” the money;
It is difficult to see how these are extraneous or irrelevant matters. The wife’s need for funds was central to the application and thus needed to be considered by her Honour.
Looking though at the husband’s claim that the wife did not need the funds, the mistake made by the husband was to submit that the wife’s circumstances needed to be “compelling”. That is not the case, and all the authorities in this area, including Strahan, say so (e.g. at [132]).
The next mistake made by the husband is the submission that because the wife sought in the alternative that the amount of $240,000 be placed in a trust account demonstrated that she did not need the funds. Her Honour addressed that submission correctly at [26] saying as follows:
The wife states in her affidavit that if she is not successful in her application for the sum of $240,000 to be distributed to the parties she seeks that the sum be placed in a trust account as she is concerned that the husband may spend those funds. The husband says those funds are savings built to meet family contingencies. The husband says that by seeking in the alternative that the sum of $240,000 be placed in a trust account she is showing that she does not need the funds. This is not correct as it is very much cast in the alternative out of concern that the husband will spend those funds.
I note that it seems that the wife and her Honour overlooked the fact of the injunction made on 8 October 2019, but that does not affect her Honour’s reasons here.
Then, the husband’s case is that the wife would have a total of $357,500 available to her, including the amount of $120,000 that she sought, but that was disputed by the wife. For a start, on the husband’s own calculations the amount is $257,500, and not $357,500, and in any event, those calculations comprise assumptions and assertions by the husband, without any evidentiary basis. For example, the calculation includes an amount of $40,000 that the wife claims is an amount that she has paid by way of repayment of a loan. The husband simply says that he does not accept that, but clearly, that is not enough.
Before her Honour the figures were different again. The husband’s claim was that the wife had failed to account for $355,000 ([24]), and he sought a “full accounting” of the wife’s expenditure ([25]). Her Honour dealt with this appropriately by saying this in [25]:
…In determining a just and equitable outcome in property matters the Court does not engage in an accounting exercise and the parties are not required to explain every dollar spent.
Then in [26] her Honour recorded the wife’s evidence as to her expenditure of those funds, and in [33] calculated that even if the wife still had the $355,000, and the $50,000 previously received, for her to receive another $120,000, the total would only represent less than 20 per cent of the net non-superannuation asset pool of $3.6 million.
Thus, her Honour was well aware of what the husband was saying as to the wife’s need for funds, and dealt with that appropriately, namely, indicating that it would be a matter for trial where the truth lies, but even if the wife has the funds said to be unaccounted for, her Honour was “satisfied that the wife will receive considerably more than 20 per cent of the pool” ([34]).
As her Honour recognised, and as is obvious from the husband’s submissions on appeal, “there are a number of controversial issues the wife’s lawyers need to address, and she is likely to incur significant legal fees doing so” ([35]). Thus, it was appropriate to make the order the subject of the appeal.
For some reason, the husband suggests that her Honour took into account as an extraneous or irrelevant matter what his expenditure has been, and he refers at length to the financial disclosures made by both parties, and to his affidavit material. However, the husband’s expenditure, and any issue as to non-disclosure, was not a matter that her Honour needed to have regard to, and she did not.
(3)Despite the parties having net assets of in excess of $3.6 million, excluding superannuation, the husband had “immediate cash needs”, and he will be under extreme financial pressure because he lives in rental accommodation and he needs to “fund the court case”. Further, there will be a need for cash to fund the adjustments required by the final property settlement orders;
Here it seems the complaint is not that there was an extraneous or irrelevant matter that influenced her Honour, but rather that her Honour failed to take into account the husband’s need for cash, and the prospect of cash being required to fund an adjustment as a result of the final orders for property settlement.
The complete answer to the first issue is again the fact that the husband sought none of the cash monies, and he was restrained from accessing any of those monies to meet living expenses and legal costs without an order of the court, or the consent of the wife. Further, he failed to present sufficient evidence as to his income to demonstrate his immediate need for cash monies, and in any event, the order provided him with $120,000.
As for the second issue, that claim is highly speculative, and on the evidence could not be a basis for retaining the $240,000.
(4)Her Honour’s reference to the leading case of Strahan was misplaced because it was “different” to this case.
Her Honour’s reference to Strahan was not misplaced. Certainly the facts were different from the facts of the case at bar, but her Honour cited Strahan for the principles emanating therefrom, and which principles her Honour correctly applied.
(5)Her Honour placed too much “emphasis” on the wife’s legal expenses and ignored the husband’s expenses in renting accommodation and in pursuing the case.
This is nothing more than a repeat of the other so-called extraneous and irrelevant matters, and thus does not call for anything more to be said.
There is no merit in this ground of appeal.
Ground 3 – That the trial judge mistook the facts
The particulars of this ground render it unfathomable, and fail to identify the facts about which her Honour was allegedly mistaken. Those particulars are as follows:
While the court mentioned that accounting is part of the final settlement, the purpose of the disclosure orders on 8 Oct 2019 was to provide disclosures in the interim and the wife not complying with the disclosures has resulted in me being put at a significant disadvantage with the partial property order.
Although the husband is then expansive in his summary of argument in relation to this ground of appeal, that summary still does not assist. It extended over in excess of three pages, and the husband suggested that the wife had “lied” in her affidavit as to the funds that she had and as to her expenditure, that she had not complied with court orders and failed to produce bank statements, that her Honour took no notice of documents subpoenaed by the husband, and that he, unlike the wife, had provided full disclosure.
These claims do not reveal appealable error by her Honour. They were all matters that her Honour was aware of, and her Honour addressed them appropriately in the context of the application that was before her. Again it must not be forgotten that this was an interlocutory hearing dealt with by her Honour in the middle of a busy duty list, and the allegations by the husband were disputed. Indeed, her Honour said this at [25]:
Both parties make complaints about disclosure which will no doubt be the subject of cross-examination at the trial. …
There is no merit in this ground of appeal.
Ground 4 – That the trial Judge failed to take into account some relevant matter
Once again the “relevant matter” is just a repeat of the husband’s previous allegations. For example, he asserts that her Honour failed to take into account his claim that the wife had funds available to her, that he was querying payments and withdrawals made by her, that she had failed to provide bank statements, that he needed funds to meet his expenses including his legal costs, and the cash money should not be “removed” in order that he could access the same.
All of these matters have been addressed above, but to repeat, the allegations as to the alleged funds available to the wife and her expenditure are disputed. Both parties were complaining about the lack of proper discovery, and the evidence was lacking as to the husband’s need for funds and why the cash monies needed to be retained. And this Court again emphasises that the husband did not seek that any of the monies be paid to him, despite the fact that without an order or the wife’s consent, he was unable to access those monies to meet living expenses and legal costs. Further, and in any event, he received $120,000 to meet his cash needs, including his future legal costs if he chose to subsequently engage legal representatives.
There is no merit in this ground of appeal.
Ground 5 – That the trial Judge placed inappropriate weight on one or more relevant matters
Yet again there is nothing new in this ground of appeal, and the husband repeats the same allegations as before. Thus, I do not propose to waste this Court’s time in covering the same ground as previously.
There is no merit in this ground of appeal.
CONCLUSION
Having found no merit in any of the grounds of appeal, leave to appeal should not be granted. For completeness though I note that if there was some basis on which leave to appeal could be granted, the appeal would be dismissed as being without merit.
COSTS
In the event that the application for leave to appeal was dismissed, and/or the appeal was dismissed if leave was granted, the wife sought an order for costs calculated on an indemnity basis.
The husband opposed any order for costs being made.
This application raises two issues; first, whether an order for costs should be made; and secondly, if so, how should those costs be calculated, on the usual party/party basis, or on an indemnity basis.
The first question is governed by s 117 of the Act which relevantly provides as follows:
(1)Subject to subsection (2), subsections 45A(6) and 70NFB(1) and sections 117AA and 117AC, each party to proceedings under this Act shall bear his or her own costs.
(2)If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A), (5) and (6) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
(2A)In considering what order (if any) should be made under subsection (2), the court shall 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.
…
The authorities are such that there only need be one justifying circumstance to found an order for costs (Fitzgerald v Fish (2005) 33 Fam LR 123), and here that is satisfied by the fact that the husband has been wholly unsuccessful in his application for leave to appeal (s 117(2A)(e)).
It is noteworthy that the application for leave to appeal, and the appeal, have been found to be devoid of merit, and thus ought not to have been filed. As put by the wife in paragraph 28(e) of her summary of argument filed on 11 November 2020, the point of requiring leave is to “discourage endless interlocutory litigation and appeals that have the capacity to prolong family law litigation”.
For completeness I also indicate that none of the other factors in s 117(2A) militate against an order for costs being made.
Thus, turning to the second question.
Ordinarily when costs are awarded they are calculated on a party/party basis, but if there are exceptional circumstances then indemnity costs may be warranted.
In this regard it is useful to refer to what Sheppard J said in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 256:
2.The ordinary rule is that, where the court orders the costs of one party to litigation to be paid by another party, the order is for payment of those costs on the party and party basis …
3.This has been the settled practice for centuries in England. It is a practice which is entrenched in Australia. Either legislation (perhaps in the form of an amendment to rules of court) or a decision of an intermediate Court of Appeal or of the High Court would be required to alter it …
4.In consequence of the settled practice which exists, the court ought not usually make an order for the payment of costs on some basis other than the party and party basis. The circumstances of the case must be such as to warrant the court in departing from the usual course …”
In that case, Sheppard J provided some examples of circumstances that might warrant the exercise of discretion to award indemnity costs, and usefully, Holden CJ in Munday v Bowman (1997) FLC 92-784 at 84,660, drew from his Honour’s decision the following:
a.Where it appears that 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 …
b.Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud …
c.Evidence of particular misconduct causing loss of time to the court and to other parties …
d.The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions …
(Citations omitted)
Plainly the examples in paragraphs a and d apply here, and there is a clear warrant for costs to be assessed on an indemnity basis.
In that regard the amount sought by the wife is $13,332, and it is apparent that that is calculated on the basis of the costs agreement entered into by the wife. However, I am not satisfied that all of the charges are either necessary or reasonable, and in the exercise of my discretion pursuant to r 19.18(1)(a) of the Family Law Rules 2004 (Cth), I fix the amount of costs at $10,000.
I certify that the preceding seventy (70) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Strickland. Associate:
Dated: 12 April 2021
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