Masih and El Saeid and Ors
[2020] FamCA 238
•16 April 2020
FAMILY COURT OF AUSTRALIA
| MASIH & EL SAEID AND ORS | [2020] FamCA 238 |
| FAMILY LAW – COSTS – Where the husband and other respondents seek costs against the wife in respect of costs incurred during interim proceedings – Where the wife was wholly unsuccessful in those proceedings – Where the husband was forced to defend those proceedings – Where the wife’s interim application did not seek orders against the other respondents – Where the circumstances warrant the award of costs in favour of the husband only – Where costs were sought on an indemnity or solicitor/client basis – Where the circumstances do not warrant an award of costs beyond a party/party basis – Order for the wife to pay the costs of the husband, on a party/party basis. |
| Family Law Act 1975 (Cth) ss 79, 117 Family Law Rules 2004 (Cth) r 13.06 |
| APPLICANT: | Mr A Masih |
| RESPONDENT: | Ms El Saeid |
| SECOND RESPONDENT: | E Pty Ltd |
| THIRD RESPONDENT: | Mr B Masih ATF D Family Trust |
| FOURTH RESPONDENT: | C Unit Trust |
| FILE NUMBER: | SYC | 2986 | of | 2012 |
| DATE DELIVERED: | 16 April 2020 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Loughnan J |
| HEARING DATE: | Written submissions |
REPRESENTATION
| SOLICITOR FOR THE APPLICANT: | Diamond Conway Solicitors |
| COUNSEL FOR THE RESPONDENT: | Mr Raphael |
| SOLICITOR FOR THE RESPONDENT: | Sharah & Associates |
| SOLICITOR FOR THE SECOND, THIRD AND FOURTH RESPONDENTS: | York Law Family Law Specialists |
Orders
The wife shall pay to the solicitor for the husband the costs of the husband as agreed or as assessed being the costs of and incidental to the wife’s Application in a Case filed 9 August 2019 (which was later amended by her Amended Application in a Case filed 30 September 2019) including the costs of the listing on 16 January 2020 and of the subsequent costs proceedings which were the subject of the orders made on 16 January 2020.
The application for costs by the second, third and fourth respondents is dismissed.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Masih & El Saeid and Ors has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
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 r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC2986 of 2012
| Mr A Masih |
Applicant
And
| Ms El Saeid |
Respondent
And
E Pty Ltd
Second Respondent
And
Mr B Masih ATF D Family Trust
Third Respondent
And
C Unit Trust
Fourth Respondent
REASONS FOR JUDGMENT
Introduction
In the context of property settlement proceedings between wife and husband, Ms El Saeid (“the wife”) instituted proceedings for interim property orders for the purpose of seeking funds for her legal costs in relation to appeals to the Full Court. The wife’s application was heard on 3 October 2019 and judgment was delivered on 23 October 2019, dismissing the wife’s application. Mr A Masih (“the husband”) seeks his costs of those proceedings.
The second, third and fourth respondents also seek an order against the wife for their costs of those proceedings.
What follows are the reasons for the orders set out above.
Applications
The husband seeks the following orders:
13.1.That the Applicant Wife pay the Respondent Husband’s costs of and incidental to the Wife’s Application in a Case filed 9 August 2019 (later amended by her Amended Application in a Case filed 30 September 2019 on an indemnity basis quantified in the amount of $22,895.09.
13.2.In the alternative the Applicant Wife pay the Respondent Husband’s costs:
13.2.1 On a party/party basis quantified $15,248; or
13.2.2 On a party/party basis as agreed or in default, as assessed.
13.3That the Applicant Wife pay to the Respondent husband costs of and incidental to the relisting on 16 January 2020 quantified at $3,466.66.
13.4That the Applicant Wife pay the Respondent Husband’s costs of this costs application quantified at $2,400.
The second, third and fourth respondents seek the following orders: [1]
[1] In accordance with the written submissions of the second, third and fourth respondents filed on 13 February 2020.
1.The 2nd – 4th Respondents seek that the Wife pay the 2nd – 4th Respondents’ costs in relation to the Amended Application in a Case on a cascading alternate basis without concession as outlined below:
(a)That within 14 days from the date of these Orders the Wife pay the 2nd, 3rd and 4th Respondent’s costs of and incidental to the proceedings on an indemnity basis being indemnity costs referrable to the costs and disbursements paid by the 2nd, 3rd and 4th Respondents to their lawyers, York Law Family Law Specialists, (less the cost order awarded in favour of the third parties in July 2015), being an amount fixed in the sum of $3,300.
(b)That in the alternative to Order 1 hereof but without concession, within 14 days from the date of these Orders the Wife pay the 2nd, 3rd and 4th Respondent’s costs of and incidental to the proceedings on an indemnity basis as agreed or assessed and pay the same within 14 days of any agreement or assessment.
(c)That in the alternative to Orders 1 and 2 hereof but without concession, within 14 days from the date of these Orders, the Wife pay the 2nd, 3rd and 4th Respondent’s costs of and incidental to the proceedings on a solicitor/client basis, (less the cost order awarded in favour of the third parties in July 2015), with such costs to be fixed in the sum of $2,475.
(d)That in the alternative to Orders 1, 2 and 3 hereof but without concession, within 14 days from the date of these Orders the Wife pay the 2nd, 3rd and 4th Respondent’s costs of and incidental to the proceedings on a solicitor/client basis as agreed or assessed and pay the same within 14 days of any agreement or assessment.
(e)That in the alternative to Orders 1, 2, 3 and 4 hereof but without concession, the Wife pay the 2nd, 3rd and 4th Respondent’s costs of and incidental to the proceedings on a party/party basis, with such costs to be fixed in the sum of $2,145.
(f)That in the alternative to Orders 1, 2, 3, 4 and 5 hereof but without concession, the Wife pay the 2nd, 3rd and 4th Respondent’s costs of and incidental to the proceedings on a party/party basis, with such costs as agreed or assessed and pay the same within 14 days of any agreement or assessment.
2.That the wife pay the 2nd – 4th Respondents costs in relation to the cost application fixed in the sum of $1,320.
(As per the original)
Given that the directions to facilitate the costs issue to be heard in chambers were made by consent, I take it that the wife opposed the orders sought by the respondents.
On 16 January 2020 the following directions were made:
(1)By consent, orders and notations are made in accordance with the document titled “Minutes of Directions” (Exhibit 1 dated 16 January 2020), as set out hereunder:
1.Notation: On 23 October 2019, the Honourable Justice Loughnan reserved the issue of costs and gave leave to all parties to restore the proceedings to the List by arrangement with each other and the Associate to Loughnan J.
2.Notation: The Husband and the Second to Fourth Respondents seek orders for costs against the Wife in respect of the Wife's Application in a Case filed 9 August 2019 and Amended Application in a Case filed 30 September 2019.
3.That each of the Husband and Second to Fourth Respondents file and serve by no later than 14 February 2020 any affidavit to be relied upon and submissions.
4.That the Wife by no later than 13 March 2020 file and serve any affidavit she relies on and submissions in response.
5.That each of the Husband and Second to Fourth Respondents file and serve submissions in reply to the Wife's submissions by no later than 27 March 2020.
6.That the parties agree that the Costs Applications be determined in Chambers.
(2)The question of the costs of and incidental to the appearance today be reserved.
(3)Leave is granted to the parties to raise any related costs issue in the documents prepared by them pursuant to directions made today.
On 13 February 2020 written submissions on behalf of the second, third and fourth respondents were filed. On 14 February 2020 an affidavit of the husband and written submissions on his behalf were filed. Nothing was filed on behalf of the wife and as a result there was no question of submissions in reply.
The law
Section 117 of the Family Law Act 1975 (Cth) (“the Act”) relevantly provides:
Section 117
Costs
(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.
Discussion
Turning to the s 117(2A) considerations:
(a) the financial circumstances of each of the parties to the proceedings;
In the costs proceedings I was taken to no evidence about the financial circumstances of any of the parties. The fact of there being no recent evidence about the wife’s financial circumstances is an issue raised on behalf of the husband under (c) below.
There is no evidence from which an assessment could be made of the financial circumstances of the second, third and fourth respondents.
The substantive proceedings are proceedings for property settlement between husband and wife. The draft balance sheet prepared on behalf of the husband in the property settlement proceedings to date, puts his assets at a net value of $1.9 million. The financial relationship between the wife and her partner, Mr P, is a matter of speculation on behalf of the husband but there is no other indication that the wife has any substantial means.
(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;
No party was in receipt of a grant of legal aid.
(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;
On behalf of the husband it is submitted under this criterion that the wife failed to provide any evidence of her current financial circumstances, her latest Financial Statement being filed in November 2016. In that regard it needs to be remembered that there has yet to be a final hearing in the property settlement proceedings. Putting aside compliance with orders about filing documents, the Family Law Rules 2004 (Cth) only require an update to Financial Statements where there has been a significant change in circumstances. [2]
[2] See r 13.06.
In respect of these proceedings for the costs of the interim property settlement proceedings, there was a wasted listing on 16 January 2020 as a result of a misunderstanding by the wife’s legal representatives. Attempts were made by the husband’s solicitors to settle directions to facilitate the costs issue being dealt with on the papers. The respondents and Mr JJ were invited to agree to those directions. Mr JJ said that he did not want to be heard about costs and the solicitor for the second, third and fourth respondents agreed to the draft directions. The wife did not agree, necessitating the listing on 16 January 2020. On the 16 January 2020 directions were made by consent in the terms proposed on behalf of the husband and learned counsel for the wife conceded the error that lead to the unnecessary listing.
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
The proceedings were not 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;
The wife was wholly unsuccessful in the interim costs proceedings. This is the main plank of the arguments made in support of the costs applications.
(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;
There is no evidence of offers in writing by one party to another.
(g) such other matters as the court considers relevant.
Unlike most property settlement proceedings, the interim costs proceedings did not involve two or more parties all seeking orders. In this instance the wife instituted proceedings and the husband had no choice but to defend them.
As was submitted on behalf of the husband, the wife should have known that her application would fail because:
(a)she was unable to point to a fund from which any payment could be made. The law about interim or partial property settlement is well settled. The proceedings involve an exercise of power under s 79 of the Act and because the power is exercised at a time before the final hearing, the Court must act conservatively in that exercise. In simple terms, if an order was to be enforceable it had to be practically achievable and among other things, that necessitated identifying a source of funds from which the payment could be made; and
(b)the lien held by her former solicitor for his costs.
The wife’s former solicitor, Mr JJ had a judgment debt for his costs of earlier acting for the wife in these proceedings, in the sum of $324,244.87. Mr JJ surrendered his lien over the papers to permit the wife to continue to prosecute the substantive proceedings with new solicitors. The conditions under which the lien was surrendered were set out in Orders made on 9 June 2015 and included orders requiring the wife to grant a first charge over any amount recovered by her in these proceedings from the husband or paid on his behalf, as to $324,244.87 and that the first $324,244.87 paid by the husband to the wife was to be paid to Mr JJ. In those circumstances, the wife would not be able to apply to her current legal expenses, any of the interim property settlement of $120,000 that she sought. By her amended application filed on 30 September 2019 the wife sought that she have relief from the orders made on 9 June 2015. I found that there was no principled basis for providing that relief.
Conclusion
The general position is that the parties bear their own costs. The matters relevant to the husband’s application for costs include that the husband was obliged to defend the wife’s application. In addition, the wife was wholly unsuccessful and she should have anticipated that and not brought or continued to prosecute the proceedings. Finally, the husband was put to the additional unnecessary costs of the appearance on 16 January 2020.
Those matters weigh in favour of the husband being awarded his costs of the interim property settlement proceedings and of the resultant costs application, rather than him being left to bear his own costs.
The husband sought that his costs be assessed on an indemnity basis and if not that, on a solicitor/client basis and if not that, on a party/party basis. In addition to reasons for awarding costs, the decision to make an award on a more generous basis than party/party, must also be justified. The factors referred to above justify an award of costs to the husband but there is nothing advanced that warrants a more generous award than party/party. I will order that the wife pay to the solicitor for the husband, the costs of the husband of and incidental to the wife’s Application in a Case filed 9 August 2019 (which was later amended by her Amended Application in a Case filed 30 September 2019) including the costs of the listing on 16 January 2020 and of the husband’s application for the costs of the costs proceedings, as agreed or as assessed.
As to the costs of the second, third and fourth respondents, the difficulty is that no orders were sought against them. Perhaps understandably, they chose to be represented at the hearing on 3 October 2019 but in practical terms no orders adverse to the third parties were possible in the interim property settlement proceedings. There is no justification for an award in respect of the costs of the second, third and fourth respondents.
I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan delivered on 16 April 2020.
Associate:
Date: 16 April 2020
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