MOVILA & MACKEE

[2020] FamCA 613

FAMILY COURT OF AUSTRALIA

MOVILA & MACKEE [2020] FamCA 613

FAMILY LAW – COSTS – Interim – where the Respondent pursued an Application regarding Australia being an inappropriate forum which was ultimately dismissed by consent – where the Respondent was therefore wholly unsuccessful in pursuing that claim – where the conduct of the Respondent gives rise to a costs order under s117, but does not justify an order for costs on an indemnity basis

Family Law Act 1975 s117
Family Law Rules 2004

Kohan & Kohan (1993) FLC92-340
D & D (Costs)(No 2) (2010) FLC 93-435
Sfakianakis & Sfakianakis [2019] FamCAFC 54
Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397

APPLICANT: Ms Movila

RESPONDENT: Mr Mackee

FILE NUMBER: BRC 12925 of 2016

DATE DELIVERED: 28 July 2020

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Baumann J

HEARING DATE: 1 July 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr T Kirk QC

SOLICITOR FOR THE APPLICANT: HopgoodGanim Lawyers

COUNSEL FOR THE RESPONDENT: Mr P Looney QC

SOLICITOR FOR THE RESPONDENT: McInnes Wlson Lawyers

Orders

1. That the husband shall pay a contribution to the costs of the wife in respect of the husband’s Response filed 8 March 2019, as agreed or assessed on the following basis:

   (a)costs on a party and party basis under the Family Law Rules 2004 between 8 March 2019 and 4 November 2019 relating to the forum issue; and

   (b)       costs of Senior Counsel to prepare for and appear on 8 November 2019

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 Movila & Mackee 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 BRISBANE

FILE NUMBER: BRC 12925 of 2016

Ms Movila

Applicant

And

Mr Mackee

Respondent

REASONS FOR JUDGMENT

1. On 8 November 2019 the Court dismissed the Response of Mr Mackee (“the husband”) filed 8 March 2019 which sought the following orders:

   “1. That the proceedings … brought by the wife pursuant to section 79 of the Family Law Act 1975 (Cth) be dismissed on the basis that the Family Court of Australia is a clearly inappropriate forum.

   2. That in the alternative to the relief sought at paragraph 1 above, that the proceedings be permanently stayed on the basis that the Family Court of Australia is a clearly inappropriate forum.”

2. The Court further ordered that:

   “19. That noting the cross-applications for costs orders (be they reserved or an order for costs from the other party), such applications be adjourned for further hearing at 9.30am on 27 April 2020 and, if they are to be pursued, then each party shall file and serve by no later than 4.00pm on 17 April 2020 an outline of argument supported by a chronology and any relevant correspondence.

3. On 1 July 2020, the Court received:

   a)oral and written submissions on behalf of the wife Ms Movila from Mr Kirk QC; and

   b)oral and written submissions on behalf of the husband from Mr Looney QC,

   The submissions have been considered as have the Affidavits referred to by Counsel that they relied upon.

4. The principles in respect to costs in proceedings under the Family Law Act1975 (Cth) are well settled. The general position is that each party is to bear their own costs (s117(1)) and if considering what order (if any) should be made under subsection (2), the Court shall have regard to the factors set out in s117(2A).

5. As a general statement of principle the wide discretion in s117(2) permits the Court “to fashion an order that is apt in the circumstances”, including fixing costs in a particular sum, taking into account all relevant circumstances. As has been stated in numerous Full Court decisions, an order may be made for the payment of costs on an indemnity basis (rather than, for example, on a scale or party and party basis), although such orders are exceptional (Kohan & Kohan (1993) FLC92-340 at 79; D & D (Costs)(No 2) (2010) FLC 93-435; Sfakianakis& Sfakianakis [2019] FamCAFC 54 at 10).

6. The discrete issue raised as to forum arose in the midst of property alteration proceedings commenced by the wife in this Court on 25 September 2018, relating to a marital relationship where the parties finally separated in September 2018 (although the wife says there was a three month attempt at reconciliation in March 2020)

Relevant context for the husband’s forum

cross-application

1. After Orders were made for substituted service upon the husband, and service was effected, the husband filed a Response on 8 March 2019 seeking the orders referred to above. He chose not to respond, at that time, to the final orders relief sought by the wife.

2. In his Affidavit filed in support of his Response, the husband disputed “that Australia is the appropriate forum to determine how the property owned by Ms Movila and I is to be divided”, due to a “financial agreement” entered into between the parties around June 2008 in Country B “which dealt with the division of our property in the event of separation”. The husband deposed to the fact that he did not have a copy of the agreement “however am in the process of obtaining a copy and translating it”.

3. The wife filed a reply on 29 April 2019 seeking that the husband’s cross-application be dismissed. It is reasonable to infer that prior to 29 April 2019, in some way, the wife being aware of the husband’s Application would have engaged her lawyers to consider the forum application made by the husband.

4. On 30 April 2019 a Registrar made a number of Orders, relevant to the discrete jurisdictional issue including:

   “1. That within 60 days of the date of these orders the Husband file and serve an Affidavit evidencing his assertion that the parties entered an agreement in Country B and for this purpose the requirements of Rule 15.08 of the Family Law Rules 2004 is waived and a copy of the agreement should be annexed to the Affidavit.

   2. That in the event the Husband asserts that he is unable to comply with Order 1 hereof he is required to file and serve an Affidavit within 60 days of the date of this order evidencing his attempts to comply.”

5. It is noted that Orders 3, 4 and 5 of the Registrar’s Orders related to the process of preparing and filing a joint balance sheet, even when the notations made it clear that the husband asserted that Australia is a clearly inappropriate forum. The further notation was that the parties “own real property and have interests in a number of entities in a number of countries”. Such an uncontroversial notation was consistent with the parties Financial Statements that had been filed by that date.

6. The husband says that he made endeavours from March 2019 to obtain a copy of the “Marriage Contract” from the Country B Government and on 23 June 2019 his representative was given the marriage contract, officially translated into English (see paragraph 7 of the Affidavit of the husband filed 2 July 2019). In his Affidavit he deposed at paragraph 9 to being “unsure how relevant the Country B Marriage Contract is to the matter before the Court” but had instructed his solicitors “to procure the advice that I need to make an informed decision about my legal strategy”.

7. Clearly as at 2 July 2019, and the Directions Hearing before the Registrar that day, the husband was still pursuing his forum argument. Accordingly, on that day the Registrar listed for hearing on 8 November 2019, before a Judge, “the husband’s application for summary dismissal on the basis of Australia being a clearly inappropriate forum” with the husband to disclose by 30 August 2019 “all documents relevant to the issue of whether Australia is a clearly inappropriate forum including any documents adverse to his assertion”.

8. On 17 September 2019, a Registrar made Orders requiring the husband to file and serve all Affidavit material he sought to rely upon for the 8 November hearing, by 14 October 2019 the husband filed no new material. On Friday 25 October 2019, the husband instructed his solicitors to notify the wife’s solicitors that he would not be pursuing the relief contained in paragraphs 1 and 2 of his Response filed 8 March 2019. The letter sent by the husband’s solicitors on that day proposed some directions that would advance the substantive property matter.

9. The husband does not say in any of his Affidavits when he received the advice he was seeking about the forum issue before he decided to give instructions to his solicitors on 25 October 2019, however it is reasonable to infer he was aware the wife, mindful of her obligation to file her Affidavit in Reply by Monday 28 October 2019, was concerned about his failure to file his Affidavit as directed because by letter of 15 October 2019 the wife’s solicitors raised his non-compliance with the Registrar’s directions.

10. Having identified that the husband was not pursuing his forum argument, the wife did not file any Affidavit in reply, but made it clear on 29 October 2019 that they required “your client’s application contained in his response to initiating application to be dismissed”. The orders proposed by the husband on 25 October 2019, merely sought that “the interim hearing before Justice Baumann on 8 November 2019 be vacated”.

11. No response to the proposed orders conveyed on 29 October 2019 relating to the discrete application of forum was received by the wife until 4 November 2019 at 5.32pm which relevantly advised that, in effect, the husband agreed to order 1 – namely the dismissal of the husband’s response filed 8 March 2019. Other disputes remained as to other directions related to the substantive property proceedings which were ultimately resolved by consent before me on 8 November 2019 after further discussions that day.

12. Based on this chronology, I make the following findings in respect of the s117(2A) factors, namely:

    a)The parties’ Financial Statements and the “joint” balance sheet filed 25 June 2019 demonstrates the financial circumstances of the parties, summarised by the submission of the husband that both “have significant assets”.

    b)Neither party is in receipt of legal aid.

    c)In my view, the husband’s conduct is relevant. Seemingly without having the evidence at his disposal, on 8 March 2019 he raised the jurisdictional issue. To have done so without the document he relied upon or any advice on the effect was a procedural step that had the effect of diverting both the wife and the Court from the substantive property proceedings. This jurisdictional issue had to be decided before the substantive proceedings could move forward.

    The husband took from 23 June 2019 (when his representative had possession of the translated “Marriage Contract”) to 25 October 2019 to decide not to pursue his application. I am not able to properly assess what other steps, other than attendance before the Registrar as set out on

    
    

    30 April 2019, 2 July 2019 and 17 September 2019, the wife’s solicitors took in respect of the forum issue during this period.

    The exchanges between solicitors from 25 October 2019 as to the form of the order relating to the forum issue set out above demonstrate that between 29 October 2019 and until 4 November 2019 there was no concluded consent that the husband’s Application be dismissed. I agree with the submissions of the wife that she was entitled to seek that order when the husband chose not to pursue his Application. Merely vacating an interim hearing does not have the same effect – and in any event, the matter having been listed for over three months and the while substantive proceedings were still on foot, case management efficiency required an appearance on 8 November 2019 even if there was no need to hear and determine the forum issue.

    The husband did not communicate his decision not to pursue the forum issue until Friday 25 October 2019 – 11 days after he was requires to file any Affidavits he intended to rely upon. Where the wife had an obligation to file her Affidavits by Monday 28 October 2019, it is reasonable to infer some preparation may have taken place –even if it were a reply to the two Affidavits the husband had filed previously. The conduct of the husband in leaving this decision not to pursue the forum until so late, is likely to have caused the wife to incur costs that could have been avoided, although on the evidence before the Court I am unable to assess that quantum.

    d)The proceedings (being the forum application) were not necessitated by the failure of a party to the proceedings to comply with previous orders of the Court. Whether the husband has, as the wife submits, failed to “comply with almost every order”, might need to be considered in respect of the substantive proceedings – but not now.

    e)The husband’s Application which he initiated in his initial Response was dismissed. He was, as a result wholly unsuccessful.

    f)Counsel for the husband submits that the wife’s conduct is relevant – apparently because the wife, it is alleged (but she disputes), agreed to give the husband a copy of the marriage contract. In circumstances where the husband’s evidence about where an authenticated copy is held (by the Country B Government) the husband before he asserted his challenge to jurisdiction should have secured the document and taken advice. He did not do so.

Liability

1. On the findings set out above, I am satisfied that the circumstances justify an order for costs in the wife’s favour, payable by the husband:

   a)

   in respect of his Response filed 8 March 2019 from that date to

   
   

   4 November 2019; and

   b)

   Because the issue about whether the Application was to be dismissed or somehow the Application should merely be “vacated”, was alive until

   
   

   4 November 2019 at 5.32pm, if Counsel was retained for the hearing on 8 November 2019 before 5.32pm on 4 November 2019, the husband should be responsible for a proportion of Counsel’s fees; and

   c)In the circumstances of the value of the pool of assets and the chronology set out above, I certify it was reasonable for Senior Counsel to be retained – however account must reasonably be taken of the fact that on 8 November 2019, the issue that is likely to have required more time were the directions to be made – as, although Counsel retained by the husband, Mr C, initially indicated to the Court an objection to an order for dismissal, that had already been agreed to in the correspondence.

   d)The basis on which the costs are to be assessed is the matter I now turn to in these Reasons.

How should costs be assessed

1. I will order that the husband pay the costs of the wife within the parameters set out at paragraph 19 of these Reasons, as agreed and failing agreement as assessed on a scale basis.

2. In not being persuaded by Counsel for the wife that the costs should be assessed on an indemnity basis, I find:

   a)I do not regard the husband’s conduct, although justifying an order for costs, is so exceptional as to require costs to be assessed on an indemnity basis.

   b)It was known to both parties that a form of “Marriage Contract” existed at the time of marriage in Country B. Whilst on the face of the translated document, the “contract” does not appear to restrict property rights, the husband was entitled to take advice on its relevance to the asserted forum issue and/or on rights and entitlements of the parties under the Family Law Act 1975. Whilst it might have been more prudent to have waited until he had both the document and advice available to him before filing a Response disputing jurisdiction, the delay as set out was not prolonged.

   c)I am not satisfied that the Response was filed frivolously or constitutes an abuse of process (Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397).

   d)I do not assess the husband’s conduct as “intentionally obstructionist”.

Conclusion

1. The Order which appears at the commencement of these Reasons is, in the circumstances, just.

I certify that the preceding twenty-two (22) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Baumann delivered on

28 July 2020.

Associate:

Date: 28 July 2020