Masih & El Saeid (No. 3)
[2021] FamCA 577
•5 August 2021
FAMILY COURT OF AUSTRALIA
Masih & El Saeid (No. 3) [2021] FamCA 577
File number(s): SYC 2986 of 2012 Judgment of: HARPER J Date of judgment: 5 August 2021 Catchwords: FAMILY LAW – COSTS – Where the wife put on no evidence and made no submissions about costs – Where the wife wholly unsuccessful at hearing of threshold financial issues – Where the wife made numerous amendments to points of claim occasioning wasted costs – Where husband sought indemnity costs – Where fixed sum reflecting party-party costs ordered – Where husband also sought costs of review hearing – Where wife breached court orders compelling husband to seek recovery orders for children – Party-party costs ordered – Turns on own facts.
Legislation: Family Law Act 1975 (Cth) ss106B, 117(2), 117(2A), 117(2A)(a), 117(2A)(c)
Family Law Rules 2004 (Cth) rr 1.04, 1.06, 1.07,1.08
Cases cited: Bhatt & Acharya (Costs) [2017] FamCAFC 71
El Saeid & Masih and Ors [2019] FamCA 497
Harris & Dewell (No. 2) [2018] FamCAFC 180
Masih & El Saeid (No. 2) [2021] FamCA 292
Masih & El Saeid [2019] FamCA 234.
Number of paragraphs: 66 Date of last submission/s: 22 January 2021 Place: Sydney Solicitor for the First Applicant: Bruce Cameron ORDERS
SYC 2986 of 2012 BETWEEN: MR A MASIH
ApplicantAND: MS EL SAEID
Respondent
ORDER MADE BY:
HARPER J
DATE OF ORDER:
5 AUGUST 2021
THE COURT ORDERS THAT:
1.That the Respondent Wife pay the Applicant Husband's costs of the threshold financial hearing quantified on a party-party basis at $160,000.
2.That that the Respondent Wife pay the Applicant Husband’s costs of and incidental to the Application for Review determined by Justice Rees on 16 June 2017 as agreed or assessed.
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 Masih & El Saeid has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARPER J:
INTRODUCTION
The protracted proceedings between Mr A Masih (“the husband”) and Ms El Saeid (“the wife”) have a long and complex history in this Court, involving both parenting and financial disputes. The relevant background is set in my earlier judgment concerning costs: Masih & El Saeid (No. 2) [2021] FamCA 292 (“the first costs judgment”). It is unnecessary to repeat the details here. This judgment should be read with the first costs judgment. It deals with applications for costs which were not the subject of the first costs judgment.
On 11 December 2020, when both parties appeared, I ordered the husband to file written submissions specifying precisely the orders sought in relation to the costs of the proceedings to date which had been reserved, but had not yet been determined. He did so on 15 December 2020. Confusion arose in relation to these submissions. As outlined in the first costs judgment, the husband filed a document titled “Applicant Husband’s Submissions in support of Application In a Case seeking Orders for Costs in relation to the reserve costs of the day of 7 November 2016 and 20 February 2017” on 15 December 2020. As a result, the first costs judgment addressed only the husband’s application for costs of two separate appearance before Rees J in November 2016 and February 2017.
The husband presses his Amended Application in a Case filed 23 August 2019 in relation to the costs of the final hearing heard between March 2018 and July 2019, ultimately resulting in a judgment delivered by Loughnan J on 25 July 2019: El Saeid & Masih and Ors [2019] FamCA 497 (“the threshold financial judgment”). In addition, he continues to press his Application in a Case filed 10 July 2017, relating to the costs of an appearance before Rees J in June 2017 (“the review judgment”). The first costs judgment did not deal with these applications for costs.
ORDERS SOUGHT BY THE HUSBAND
Pursuant to the amended Application in a Case dated 23 August 2019, the husband seeks the following orders;
1. That the Respondent Wife pay the Applicant Husband's costs of the threshold financial hearing quantified in the sum of $245,830.20.
2. In the alternative, the Respondent Wife pay the Applicant Husband's costs:
2.1 On a party-party basis, quantified at $160,000; or
2.2 On a party-party as agreed or in default as assessed.
3. That the Respondent Wife pay to the Applicant Husband costs of and incidental to this cost application.
In support of this application, the husband filed an affidavit on 21 August 2019, as well as written submissions which were filed on 19 December 2019.
I note here that the file seems to suggest that a supplementary affidavit was filed by the husband in relation to this application on 30 October 2019. This affidavit is not listed in the email sent to Chambers on 22 December 2020 in relation to the material relied upon for each application, however was referred to in a separate email sent by the husband on 25 August 2020, in response to requests from Chambers for the parties to provide copies of all documents to be relied upon for the Application. In addition, it was clearly referenced in the husband’s written submissions filed 19 December 2019. As such, the husband’s affidavit filed 30 October 2020 has also been considered.
Additionally, pursuant to the Application in a Case dated 10 July 2017, the husband seeks the following orders;
1.That the Respondent Wife pay the Applicant Husband’s costs of the Application for Review determined by Justice Rees on 16 June 2017 on an indemnity basis.
2.In the alternative, that the Respondent Wife pay the Applicant Husband’s costs of and incidental to the Application for Review determined by Justice Rees on 16 June 2017.
In support of this application, the husband originally filed an affidavit upon which he still relies. In addition, he filed written submissions on 23 August 2017, which have been received into evidence.
The wife responded to this application by way of written submissions filed on 25 July 2017, while she was represented. In those submissions, she makes it clear that she opposes any orders for costs being made. It was not made clear by her whether she continues to rely upon these submissions, but I will assume that she does.
THE WIFE’S FAILURE TO PARTICIPATE
As explained in the first costs judgment at [30] - [43], except to the extent already mentioned, the wife has not participated in opposing the applications for costs, including those the subject of this judgment, despite being given ample opportunity to do so. I consider it appropriate to determine the applications for costs the subject of this judgment in the absence of any material from the wife.
THE LAW
I set out the law applicable to applications for costs in this jurisdiction in the first costs judgment. I refer to that exposition for the purposes of this judgment. It does not require repetition here.
THE THRESHOLD FINANCIAL PROCEEDINGS
The procedural history of this matter was thoroughly outlined in the first costs judgment at [6] – [22]. I will only repeat the history to the extent necessary for the purposes of this judgment.
To recap, there was a hearing across seven days in March 2018 and July 2019 in relation to the threshold issue, and judgment was delivered by Loughnan J on 25 July 2019. Ultimately, his Honour dismissed a substantial portion of the wife’s application for financial relief, and the remaining entities were discharged from the proceedings as a result. The husband participated in this this and filed affidavit material. The first costs judgment dealt the application for costs made by the third party entities against whom the wife was wholly unsuccessful. This judgment deals with the husband application for costs in relation to that hearing.
DISCUSSION
The Costs Application of August 2019
Conduct of the Wife
The husband made submissions about the conduct of the wife which referred to interlocutory proceedings before Justice Aldridge (husband’s written submissions filed 19 December 2019, pg. 6 [27]), the details of which were set out in the first costs judgment. Particularly, the husband made submissions about the wife’s failures in her duty of disclosure, and in provision of proper financial records in her possession. I do not consider this conduct relevant to the question of the husband’s costs of the threshold financial proceedings. The wife has already been ordered to pay costs as a result of her conduct in relation to the hearing before Aldridge J.
The husband however pointed to problems of disclosure in respect of the financial threshold proceedings. He points out that in an affidavit sworn on 3 April 2017, the wife exhibited two “thick books”, containing numerous documents which had not previously been disclosed to the husband (husband’s written submissions filed 19 December 2019, pg. 7 [32]).
The husband submits that, on the basis of evidence in an affidavit of Ms Joanne Sharah, the wife’s solicitor in the financial threshold proceedings, sworn 26 February 2018, it can be inferred that the two “thick books” came into the possession of Ms Sharah on 6 July 2015 but were not disclosed to the husband until they formed part of the exhibits to the Wife’s affidavit filed 3 April 2017.
The husband also points to the repeated amendments of the wife’s claims, ultimately considered in the threshold financial hearing. These were raised by the filing of a Response to an Application in a Case by the wife on 20 May 2016. This Application came before Rees J on 30 September 2016, and the wife was ordered to file an Amended Response “setting out the relief which she seeks against the Husband and against each third party and a document articulating the basis of her claim against each party”. The wife then filed an Amended Application in a Case on 31 October 2016. Thereafter the third party entities were joined. On 20 February 2017, the wife was ordered by Rees J to file any Amended Points of Claim within 21 days. The husband claims in his submissions that the wife filed a further Points of Claim on 12 May 2017, however there is no such document on the Court file. What is clear, however, is that the wife subsequently filed two further Amended Points of Claim on 28 February 2018 and 8 March 2018, prior to the threshold financial hearing.
The husband points out that these two final amendments were filed shortly prior to the commencement of the final hearing before Loughnan J, and “well after” the husband’s trial material was due and filed. As a result, he would submit that these documents resulted in “the incurring of unnecessary preparation costs”.
Wholly Unsuccessful
The husband submits that, by Loughnan J’s threshold financial judgment on 25 July 2019, the wife was wholly unsuccessful in her claims against the entities. Due to the fact that the wife’s case was based on the assertion that the husband had beneficial ownership of the entities, he suggests the wife’s failure relates specifically to him.
In particular, Loughnan J’s found the following;
[202] Save in respect of the treatment of [paid legal fees], the wife cannot sustain any of the arguments she makes in her Points of Claim. Those parts of the applications contained in the Points of Claim will be dismissed.
The husband’s point is that in the threshold financial hearing, the wife was wholly unsuccessful against him, not just the third party entities.
Other matters to consider
The husband appears to argue that the credibility of the wife and her witnesses are a significant consideration in the assessment of costs.
In his judgment, Loughnan J noted that “much of the threshold hearing was conducted with a significant focus on credit issues”, however specified that “the testimony in question [was] almost exclusively that of the husband and his brother”, as the wife was not involved in the relevant dealings of the entities: the threshold financial judgment at [93].
Loughnan J continued by expressing reservations about making credit findings for the wife, who was assisted by an interpreter, due to potential language difficulties. It is clear from the judgment that the wife was at times inconsistent, including potentially lying about holding a degree from a University in Country X, however these matters were not considered by Loughnan J to be of significance.
Ultimately, according to Loughnan J “the focus of this threshold inquiry is on the assets of the husband. In that context, the wife’s evidence could only be of marginal or tangential relevance.”
Notwithstanding this position, the husband presses his submissions that the credibility of the wife is of relevance. In doing so, he points to findings made in a separate parenting judgment: Masih & El Saeid [2019] FamCA 234. Specifically, pointing to the fact that his Honour referred to the wife as a “terrible witness” during the hearing of those matters (Transcript of Proceedings dated 1 June 2018, pg 1117).
The husband further submits that the credibility of the wife’s witnesses is a factor to be considered in assessing whether the wife should be liable for costs.
In making this submission, he points to the evidence of Mr P, which was at times inconsistent. For example, under cross-examination from senior counsel for the husband, Mr P initially said he had “never” gone to see the mother’s solicitors with her, and further that he had no involvement in the proceedings (Transcript of Proceedings dated 14 March 2018, pg. 183). Following further questions on the subject matter, however, Mr P proffered that he had attended upon the wife’s solicitors “maybe 30” times.
For these reasons, Loughnan J found that there were “problems” in Mr P’s evidence, and ultimately preferred the evidence of the husband: the threshold financial judgment [100] - [101].
Financial Circumstances
The husband does not make reference to the financial circumstances of the parties as a relevant factor in his submissions. However, I am of the view that I am required by s 117(2A)(a) to have regard to the financial position of both parties; while impecuniosity is not in itself a bar to a costs order, it is a factor that may be relevant in the bigger picture: Bhatt & Acharya (Costs) [2017] FamCAFC 71.
The husband is a health professional. According to his Financial Statement filed 26 September 2019, the husband has a total average weekly income of $2,614. This is compared to his personal expenditure of $4,338 per week. Additionally, although he owns assets to the value of $3,898,097, he claims to have liabilities amounting to $2,626,470, and no financial resources.
There is little evidence of the wife’s financial circumstances. The most recent financial statement provided by the wife is from 23 November 2016. In it, she claimed a personal average weekly income of $457.45 and expenditure of the same. She recorded a liability of $1,000, but no assets, no superannuation and no financial resources.
The wife did not inform the Court, by evidence or updated financial statement, whether this position has changed since 2016. I note that the wife now accepts that she is in a relationship with Mr P, and has given birth to his child.
As pointed out in the first costs judgment, the husband contended the wife is likely to be insolvent, on the basis of her existing liabilities. However, there was no evidence to demonstrate this. I am unable to form a view about the wife’s financial circumstances.
Notwithstanding the precedence in this matter, the husband submits that indemnity costs are appropriate when the matter is considered through the “lens of the previous interlocutory application dealt with by Justice Aldridge” (husband’s Written Submissions, pg. 11 [48]).
Of significance according to the husband is the length of time between the judgment of July 2015, and the commencement of final hearing of the threshold financial proceedings in March 2018. It is submitted that the wife had ample time in this period to sufficiently ready her case, and yet was still wholly unsuccessful, and still caused a number of amended Points of Claim to be filed.
Conclusion of the application for costs of the threshold financial proceedings
I am satisfied that the wife’s numerous attempts at formulating a case, which all failed the threshold financial hearing, would have caused unnecessary expense and legal costs for the husband. This together with her lack of success in that hearing warrants a departure from the position in s 117(1). She should be ordered to pay the husband’s costs.
The husband seeks costs on an indemnity bases. As pointed out in the first costs judgment, the award of indemnity costs in this Court has regularly been called a significant departure from the normal standard: Harris & Dewell (No. 2) [2018] FamCAFC 180 at [23] – [25]:
I am not persuaded the husband has demonstrated a proper basis for a costs order beyond an order for party/party costs. The husband proposes a lump sum payment of $160,000 for party-party costs. I accept these costs questions should be finalised without any further expense by way of assessment. On an indemnity basis the husband’s costs were $245,830.20. I consider $160,000 a reasonable fixed sum for the husband’s party-party costs.
SHORT PROCEDURAL HISTORY – THE REVIEW PROCEEDINGS
The history of the parenting aspects of these proceedings is both long and complex, and need not be rehearsed in full for the purposes of this judgment. As the application for costs relates to Rees J’s review judgment of 16 June 2017, the history outlined will be limited to the matters relevant to that application.
Following separation, and on 17 September 2012, orders were made by consent (“the orders of 2012”) for the two children of the relationship to live with the husband from 10.00 am on Sunday until 8.00 pm on Wednesday in each week, and otherwise to live with the wife. The parties were to have equal shared parental responsibility.
These orders continued uninterrupted until 16 April 2017, when the children failed to attend their time with the husband.
On 21 April 2017, as a result of this failure, the husband filed an Application in a Case for a recovery order, as well as for enforcement of the orders of 2012. In response to this application, the wife filed a response on 23 May 2017 which sought the vacation of the orders of 2012, and a reduction in the time the children were to spend with the husband. Specifically, she sought that the children spend time with the husband for two hours on the fourth Sunday of each month, with such time to occur in a public place. She also sought an order for the husband to attend an anger management course.
It was the mother’s allegation that the husband was physically abusive towards the children, and subsequently that the children themselves did not wish to spend time with him.
The matter came before Senior Registrar Campbell, as he then was, on 25 May 2017. An injunction was ordered restraining the husband from “physically disciplining, punishing or assaulting the children”. No other alteration was made to the orders of 2012, and orders were otherwise made to allow the husband to file submissions as to costs.
Despite the orders of 25 May 2017, the mother yet again failed to make the children available for their time with the husband, therefore the husband was required to file another application.
The matter came before Senior Registrar Campbell, as he then was, on 2 June 2017 and a recovery order was issued.
The children thereafter proceeded to spend time with the husband from 5 June 2017 until 7 June 2017. The husband has had difficulty in spending any time with the children since, and certainly at the time of the review judgment, the husband had not seen them since 7 June 2017.
On 5 June 2017, the wife filed an Amended Application in a Case seeking the review of Senior Registrar Campbell’s decision to make a recovery order, and continued to press the orders sought in her Application in a Case of 2 June 2017.
The review came before Rees J on 14 June 2017, and judgment was delivered on 16 June 2017.
In summary, orders were made for the children to spend time with the husband on a particular weekend, with such time to be facilitated by the child services in the Court. Thereafter, orders were put in place to ensure that the orders of 2012 would continue uninterrupted. In addition, an Independent Children’s Lawyer was appointed.
Thus the wife’s application for review was dismissed.
DISCUSSION
The Husband’s Costs Application for the Parenting Review Application
Failure of the wife to comply with previous orders
The husband submits that the proceedings of June 2017 before Rees J were wholly brought on by the wife’s failure to comply with the orders of 2012, which had at that point been in place, by consent, for a long period of time.
According to the husband, the wife claimed that she was retaining the children in April 2017 with the intention of applying to the Court for a variation of the orders of 2012 (husband’s written submissions filed 23 August 2017, pg. 2). The wife, however, failed to make such an application until 23 May 2017. Consequently, in retaining the children, the wife was plainly in direct breach of the 2012 orders.
Moreover, although orders were made on 25 May 2017 for the orders of 2012 to continue, the wife filed to make the children available yet again, necessitating the further application and eventual orders of 2 June 2017.
The husband suggests that this is “highly relevant” to the matter, and should be an importance factor to consider in assessing potential costs.
In contrast, in her written submissions filed on 25 July 2017 the wife argued that there was “independent evidence” that the children themselves did not wish to spend time with the husband. This included evidence from the school principal, as well as the evidence from NSW Police of the children’s manner upon attempting to enforce the recovery order. She submitted that her actions were not inappropriate in the context.
Ultimately, however, Rees J made orders for the time with the husband to continue, as “the evidence that the children [had] been in any way abused by the [husband was] less than clear”. It was ultimately not accepted that the allegations of the mother were established for the purpose of the interim hearing; however, it was accepted that the children expressed a view that they did not want to spend time with the husband: the review judgment at [50].
Wholly Unsuccessful
The husband suggests that the wife’s application for review was ultimately wholly unsuccessful.
Although orders were made for the appointment of an Independent Children’s Lawyer as a result of the application, it is difficult to cavil with the suggestion that the wife was wholly unsuccessful; her application was dismissed, and the children’s time with the husband was recommenced.
I note here that in her submissions of 25 July 2017, the wife suggests that “Justice Rees vacated the Child Recovery Order”, as well as appointing an independent children’s lawyer, therefore concluding that she was not wholly unsuccessful. No order could be found suggesting that the recovery order was vacated.
The wife also argues, however, that the purpose of the Act is to “introduce an overriding no fault jurisdiction to family law matters and especially in parenting matters… [therefore] where the court is determining what is in the best interests of the child costs extremely rarely follow the event”.
Financial Position of the Parties
I repeat the comments made above at [30] – [34].
I also, however, note that the wife made specific reference to her financial position in her written submissions filed 25 July 2017. She argued that she “has no assets or resources to meet any costs order as contrasted with the financial position of the husband”. Those submissions, however, relied substantially on assertions which were rejected by this Court in the threshold financial judgment.
Conclusion as to the Husband’s Costs Application
The applications before Rees J, in respect of which the husband seeks costs, were engendered by the wife acting in breach of court orders. I accept she was wholly unsuccessful before Rees J. I am satisfied the husband has established a justification to depart form the position in s 117(1) in respect of the costs her claims. I am not satisfied he should be awarded costs on a basis other than party-party costs.
I am unable to fix an amount of those costs so the amount will have to be set as agreed or assessed.
I certify that the preceding sixty-six (66) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Harper. Associate:
Dated: 5 August 2021
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