Ming & Dao (No. 3)

Case [2021] FamCA 197

FAMILY COURT OF AUSTRALIA

Ming & Dao (No. 3) [2021] FamCA 197

File number(s): SYC 8463 of 2017
Judgment of: ALTOBELLI J
Date of judgment: 14 April 2021
Catchwords: FAMILY LAW – COSTS – costs sought following interim property proceedings – uncertainty concerning the financial circumstances of the parties – no conduct justifying a costs order – costs reserved pending final determination.
Legislation:

Family Law Act 1975 (Cth) ss 117, 117(2A)

Family Law Rules 2004 (Cth) r 19.18
Cases cited:

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

Cross v Beaumont (2008) 39 Fam LR 389; [2008] FamCAFC 68

D & D (Costs) (No. 2) (2010) FLC 93-435; [2010] FamCAFC 64

Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397; [1988] FCA 202

In the Marriage of I & I (No 2) (1995) FLC 92-625; [1995] FamCA 80

J Corp Pty Ltd v Australian Builders Labourers Federation Union of Workers (No 2) (1993) 46 IR 301; [1993] FCA 70

Kohan and Kohan (1993) FLC 92-340; [1992] FamCA 116

Limousin v Limousin (Costs) (2007) 38 Fam LR 478; [2007] FamCA 1178

Medlon & Medlon (No 6) (Indemnity Costs) (2015) 54 FLC 93-664; [2015] FamCAFC 157

Ming & Dao (No. 2) [2020] FamCA 1124

Ming & Dao [2018] FamCA 430

Ming & Dao [2020] FamCA 726

Parke & The Estate of the Late A Parke (2016) FLC 93-748; [2016] FamCAFC 248

Penfold v Penfold (1980) 28 ALR 213; [1980] HCA 4

Phillips & Hansford [2020] FamCAFC 28
Number of paragraphs: 42
Date of last submission/s: 16 February 2021
Date of hearing: On the papers
Place: Sydney
Solicitor for the Applicant: Diamond Conway Lawyers
Solicitor for the Respondent: Pigdon Norgate Family Lawyers

ORDERS

SYC 8463 of 2017
BETWEEN:

MS DAO

Applicant
AND:

MR MING

Respondent

ORDER MADE BY:

ALTOBELLI J

DATE OF ORDER:

14 APRIL 2021

THE COURT ORDERS THAT:

1.The wife’s costs of and incidental to the Application in a Case filed 3 December 2020 be reserved for determination at the conclusion of these proceedings.

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 Ming & Dao has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

Altobelli J

  1. These reasons for judgment concern an application for costs of and incidental to interim property proceedings that were heard before me on 14 December 2020. I have determined that the question of costs be reserved pending final determination of the matter and my reasons for doing so are what follows.

    BACKGROUND

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AGLC
Ming & Dao (No. 3) [2021] FamCA 197
Case
[2021] FamCA 197
Decision Date

CaseChat Overview and Summary

The case of *Ming & Dao (No. 3)* involved an application by the wife for costs of and incidental to interim property proceedings heard by Altobelli J in the Federal Circuit and Family Court of Australia. The dispute arose from an urgent application filed by the husband concerning the distribution of proceeds from the sale of a jointly owned property. The wife subsequently filed a costs application seeking that the husband pay her costs associated with that application.

The court was required to determine whether there were circumstances justifying an order for costs against the husband, pursuant to section 117 of the *Family Law Act 1975* (Cth). This involved considering the various factors outlined in section 117(2A), including the financial circumstances of the parties, the conduct of the parties in relation to the proceedings, and any other relevant matters. The husband resisted the wife's application, proposing that the matter of costs be reserved for determination at the final hearing.

Altobelli J considered the financial positions of both parties, noting the husband's assertion of limited financial capacity and the wife's substantial assets. The court found that there was significant uncertainty regarding the husband's financial position and his entitlement to a final property settlement, which was a matter for determination at the final hearing. While the husband's interim application had been unsuccessful, the court found no conduct that warranted making a costs order against him at that stage of the proceedings.

Consequently, the court ordered that the question of whether the husband ought to pay the wife's costs of and incidental to the application filed on 3 December 2020 be reserved for determination at the conclusion of the proceedings.

Orders

Orders of the court

SYC 8463 of 2017

BETWEEN:

MS DAO

Applicant

AND:

MR MING

Respondent

ORDER MADE BY:

ALTOBELLI J

DATE OF ORDER:

14 APRIL 2021

THE COURT ORDERS THAT:

1. The wife’s costs of and incidental to the Application in a Case filed 3 December 2020 be reserved for determination at the conclusion of these proceedings.

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).

Background

Background to the litigation

These reasons for judgment concern an application for costs of and incidental to interim property proceedings that were heard before me on 14 December 2020. I have determined that the question of costs be reserved pending final determination of the matter and my reasons for doing so are what follows.BACKGROUND This matter was initially brought before me on 14 December 2020 for the hearing of an urgent Application in a Case filed by the husband on 3 December 2020. That application sought, among other things, orders with respect to the distribution of the proceeds of sale of a property jointly owned by the parties. The matter now comes before me as a costs application, filed by the wife on 23 December 2020, in which she seeks that the husband pay her costs of and incidental to that application. I delivered reasons for judgment orally and made orders in the matter on 16 December 2020. I ordered that the husband’s Application in a Case be dismissed and that the proceeds of sale of the subject property be distributed largely in alignment with the proposal advanced by the wife contained in her Response to the Application filed 10 December 2020. It is not necessary to otherwise traverse the history of the matter or the interim proceedings before me, and in this respect, I refer to my substantive judgment, which is reported as Ming & Dao (No. 2) [2020] FamCA 1124, as well as the previous judgments of Watts J, Ming & Dao [2018] FamCA 430, and Austin J, Ming & Dao [2020] FamCA 726, each of which canvasses the history of these proceedings and the issues in dispute. Upon receipt of the wife’s costs application, I made orders in Chambers that each party file and serve written submissions with respect to the same. The parties have subsequently filed, and I have had regard to, the following documents:(a)Application in a Case filed by the wife on 23 December 2020;(b)Affidavit of the wife filed on 23 December 2020;(c)Affidavit of the wife filed on 22 January 2021;(d)Written Submissions filed on behalf of the wife on 22 January 2021;(e)Response to an Application in a Case filed by the husband on 5 February 2021;(f)Affidavit of the husband filed on 5 February 2021 and corresponding tender bundle;(g)Written Submissions filed on behalf of the husband on 5 February 2021; and(h)Submissions in Reply filed on behalf of the wife on 16 February 2021. LEGAL PRINCIPLES The law relating to costs in family law proceedings is well settled and is set out in detail in the Full Court decision of Parke & The Estate of the Late A Parke [2016] FamCAFC 248. An application for costs is governed by s 117 of the Family Law Act 1975 (‘the Act’). Section 117(1) of the Act sets out the general presumption that each party to the proceedings shall bear their own costs. This is subject to s 117(2), which provides that: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) and (5) and the applicable Rules of Court, make such order as the court may make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

The wife’s submissions do not expand on the circumstances that she says should give rise to an order for indemnity costs in any meaningful way. In any event, if I were to find it appropriate to make an order for costs, it is my view that the circumstances of this case are not of the exceptional kind required to depart from ordinary party to party costs. CONCLUSION I am not satisfied that there exists a sufficient basis for a costs order to be made against the husband in circumstances where there is a significant amount of uncertainty concerning his financial position particularly as it pertains to his entitlement to a final property settlement. The Court finds itself with little to no knowledge about the size, value or extent of the parties’ assets absent the required expert evidence. At this stage of the proceedings, it is not clear to what extent, if any, the husband will be entitled to a final property settlement. This is a matter for determination at final hearing. If the husband’s entitlements are as limited as the wife suggests, the husband would benefit from careful consideration of his future conduct in these proceedings, in order to avoid any further reduction in those entitlements. Whilst the husband’s interim application was entirely unsuccessful, it is an application that he was entitled to make. The evidence does not sustain a finding that he has engaged in any conduct that would warrant the making of a costs order against him at this juncture of the proceedings. In these circumstances I will reserve the question of whether the husband ought to pay the wife’s costs of and incidental to the Application in a Case filed 3 December 2020 for determination at the conclusion of these proceedings.

Ratio Decidendi

Legal Principle Established

The husband resists the wife’s Application, and in his Response proposes that:1. The Wife’s Application in a Case filed 23 December 2020 be dismissed.2. In the alternative to Order l, the matter of the payment of the Wife’s costs as outlined in her Application in a Case filed 23 December 2020 be reserved for determination at the final hearing of this matter.3. In the alternative to Order 2, costs be as assessed.4. The Wife pay the costs of and incidental to this application.CONSIDERATION Costs orders are made at the Court's discretion based on the factors listed in s 117(2A) of the Act. The wife contends that the circumstances which justify the making of an order for costs in this matter arise from subsections (c), (e) and (g) of s 117(2A). However, it is plain that all of the factors listed in s 117(2A) must be considered, and no one factor takes precedence over another: In the Marriage of I & I (No 2) (1995) FLC 92-625. I therefore propose to consider each of the matters contained within s 117(2A) in the paragraphs that follow.Section 117(2A)(a): Financial circumstances of the parties In my view, the parties’ financial circumstances are a significant aspect of this application for costs, and this is a matter to which I place great weight. The husband’s primary contention is that he does not have the financial capacity to pay the wife’s costs. At paragraph 12 of his submissions he summarises his financial position as follows: 12.1. The Husband holds an interest in 2 companies which own 2 businesses, T Pty Ltd and BB Business, currently being valued by Ms P. The Husband’s value of his interest in these companies is likely to be nil.12.2. The Husband does not draw an income.12.3. The Husband’s personal bank account balance is $684.13, and his credit card liabilities are $11,123.12.4. The Husband is in receipt of spousal maintenance ordered after a contested hearing from the Wife in the amount of $1,944 per week. To date, the Husband has funded his legal costs from payments by the Wife in the sum of $200,000.12.5. Upon the settlement of the sale of the Suburb B Property, the Husband received $215,054.63, which was paid directly to his solicitor’s trust account. $113,663.93 remains, which will be required for the ongoing payment of legal costs. Further to this, in his Affidavit filed 5 February 2021 he asserts that:14. In my personal Westpac bank accounts, I have $684.13 (as at 4 February 2021).15. I have $11,123 by way of credit card debt (as at 3 February 2021).16. I am owed $161,311 by T Pty Ltd. I have loaned the company funds for the setup of T Pty Ltd, and for ongoing costs of the business. The source of these funds has been credit card payments for expenses as and when they have been required, as well as payments from the funds I receive by way of spousal maintenance.l7. The only savings I have are the funds currently held in my solicitor’s trust account. I will tender to the Court M-l a costs notice prepared by my solicitors which sets out the legal costs that I have incurred to date and the costs that it is anticipated I will incur should the matter proceed to a final hearing.18. The last Financial Statement affirmed by the Wife in the proceedings was affirmed on 5 August 2020 and filed on 6 August 2020. At Part I, the Wife attests to the fact that she has access to assets worth $8,152,398, including funds in the bank of $164,298. At Part K, the Wife attests to having liabilities $3,521,194.19. Upon the settlement of the sale of the Suburb B Property on 21 December 2021, the Wife received $501,794.15.