Naderi & Wakim (No 2)
[2022] FedCFamC1F 1047
Federal Circuit and Family Court of Australia
(DIVISION 1)
Naderi & Wakim (No 2) [2022] FedCFamC1F 1047
File number(s): SYC 7996 of 2021 Judgment of: SCHONELL J Date of judgment: 22 December 2022 Catchwords: FAMILY LAW – COSTS – Where the wife sought a costs order – Consideration of factors in s 117(2A) of the Family Law Act 1975 (Cth) – Where the wife made offers of settlement to which the husband did not respond to – Where it was imprudent to not accept a sensible offer and to not respond – Costs ordered in a fixed sum. Legislation: Family Law Act 1975 (Cth) s 117
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 67
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
Cases cited: Bant & Clayton (Costs) (2016) 56 Fam LR 31; [2016] FamCAFC 35
Naderi & Wakim [2022] FedCFamC1F 776
Pascoe & Larsen (No 2) [2022] FedCFamC1A 126
PBF as Child Representative for AF (Legal Aid Commission of Tasmania) & TRF & LKL (2005) 33 Fam LR 123; [2005] FamCA 158
Penfold and Penfold (1980) 144 CLR 311; [1980] HCA 4
Division: Division 1 First Instance Number of paragraphs: 35 Date of last submissions: 20 December 2022 Place: Sydney Solicitor for the Applicant: Mills Oakley Solicitor for the Respondent: Barkus Doolan Winning ORDERS
SYC 7996 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS NADERI
Applicant
AND: MR WAKIM
Respondent
order made by:
SCHONELL J
DATE OF ORDER:
22 DECEMBER 2022
THE COURT ORDERS THAT:
1.The respondent husband (“the husband”) pay the applicant wife’s (“the wife’s”) costs of and incidental to the wife’s Application in a Proceeding filed 7 September 2022 on a party/party basis with such costs to be fixed in the sum of $20,318.01, such sum to be paid within 30 days of the making of these orders.
2.The husband pay the wife’s costs of and incidental to the Application for costs with such costs to be fixed in the sum of $5,500, such sum to be paid within 30 days of the making of these orders.
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 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Naderi & Wakim has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
SCHONELL J:
By Application in a Proceeding filed 11 November 2022, the applicant wife (“the wife”) seeks an order for her costs in relation to an Application in a Proceeding filed 7 September 2022. That application was determined by Maguire J in a judgment delivered on 14 October 2022, wherein his Honour made orders as sought by the wife.
The wife seeks orders that her costs be paid in a fixed sum of $20,318.01 and in the alternative that her costs be paid on a party/party basis as agreed or assessed. The wife also seeks costs in relation to the making of her Costs Application.
Part of the orders made by Maguire J on 14 October 2022 included the listing of the matter before myself on 21 November 2022 for determination of the competing extant applications for permanent stay and anti-suit injunction.
On 21 November 2022, the Court made various orders by consent including dismissing the applications for permanent stay and anti-suit injunction. Directions were made at the request of the parties dealing with the wife’s Costs Application filed 11 November 2022. In that respect, paragraphs 11 and 12 of Order 1 of the orders made 21 November 2022 were to the following effect:
Costs Application
11.That the husband is to file and serve within 21 days of the making of these Orders, a Response and supporting Affidavit to the Wife's Costs Application filed 11 November 2022.
12.That each party file and serve written submission by 4.00 pm on 19 December 2022, noting that the matter will be dealt with in Chambers.
In accordance with those directions, the wife filed her written submissions on 19 December 2022.
The respondent husband (“the husband”) did not comply with the directions. The husband did not file and serve within 21 days a Response and an affidavit to the wife’s Costs Application. Instead, the husband saw fit to file his Response and affidavit on 20 December 2022. Nor did he comply with the direction for the filing of submissions. His submissions were filed on 20 December 2022.
Nowhere in the husband’s affidavit or in the written submissions prepared by his solicitors do they provide an explanation for why there was non-compliance with the directions for filing a Response, affidavit or written submissions, nor do they provide any apology. Such attitude bespeaks of both arrogance and discourtesy not just to the wife but also to the Court.
The wife relied upon the following documents:
(1)Application in a Proceeding filed 11 November 2022;
(2)Affidavit of wife filed 11 November 2022;
(3)Financial Statement filed 1 November 2022;
(4)Written submissions as to costs filed 19 December 2022;
(5)Orders and Reasons for Judgment of Maguire J delivered 14 October 2022; and
(6)Costs notice filed 4 October 2022.
The husband relied upon the following documents:
(1)Response to Application in a Proceeding filed 20 December 2022;
(2)Affidavit of husband filed 20 December 2022;
(3)Written submissions as to costs filed 20 December 2022; and
(4)Orders made 21 November 2022.
Some background to the wife’s application is necessary to put in context some of the submissions that were made. In that respect, regard is had to the reasons delivered by Maguire J in Naderi & Wakim [2022] FedCFamC1F 776. To provide that context, the following paragraphs from his Honour’s judgment are included:
7The wife is 45 years of age. She was born in Country B. The husband is 50 years old and was born in Australia. The husband now lives in Country B whereas the wife lives in Australia.
8 The parties commenced cohabitation and were married in Country B in 1999.
9The parties separated on either 20 December 2019 or 24 February 2020 on their different versions. They were divorced in this Court on the wife's application on 23 March 2022.
10 There are four children of the marriage namely:
(i) Ms W born in 2001 (age 21 years);
(ii) X born in 2004 (age 17 years);
(iii) Y born in 2006 (aged 16 years); and
(iv) Z born in 2012 (aged 10 years).
11All four children currently live in Australia in the care of the wife. Obviously Ms W is now an adult as will X become this year.
12The husband asserts that the parties and the children habitually resided in Country B during the marriage except for visits to Australia and one longer period here due to a medical procedure for Y. The wife asserts more broadly that the parties and the children lived between Country B and Australia.
13The husband's affidavit alleges that the wife and the three younger children (Ms W was already in Australia) left Country B for Australia on or about 28 November 2020 and did so without his consent. The wife's affidavit is silent in respect of this issue and generally as to she and the children leaving Country B. It is clear, however, that the wife and the children have resided in Australia since at least November 2020. They are Australian citizens.
14On 1 November 2021 the wife filed an Initiating Application in this Court seeking financial orders only. An Amended Application was filed 7 March 2022 joining parenting issues.
15The husband deposes to commencing proceedings in the D Court in City K, Country B, on 26 October 2021. It seems that the wife has received only unsealed copies of documents asserted to have been filed in that Court. In any event, the husband either transferred or filed a new application in the J Court in City F on 25 January 2022. That application is said to raise issues of annulment, parenting, and patrimony (property).
16The date of the husband’s commencement of proceedings in Country B becomes relevant to the application before me where there is a suggestion of a policy in that country to dispose of such applications within twelve months of filing
17The wife provides a letter from the J Court in City F obtained by her father there on 25 January 2022 where in response to enquiries as to whether any proceedings had been commenced by the husband, the Court responded ‘[…] there is no case in our Court for annulment of marriage’.
18The wife's application in this Court came before a [SJR] on an ex parte basis on 24 November 2022 where orders were made inter alia as follows:
(1)that the husband be restrained from selling, transferring or further encumbering a property at [Suburb L] in New South Wales;
(2)that the wife be permitted to register a copy of the Order at the NSW Land Registry Office; and
(3)that the husband be served with the wife's initiating court documents via email.
19Service of the wife's documents was effected on 24 November 2022.
20On 17 January 2022 the wife says that she was served with unsigned and unsealed process including an affidavit from the husband deposing to have commenced proceedings in the M Court on 26 October 2021.
21On 18 January 2022 further orders were made by a [SJR] including for the husband to file his Response by 15 February 2022 and to serve the wife with all documents pertaining to the Country B proceedings by 1 February 2022. An interim order was also made restraining the husband from selling, transferring or further encumbering any legal and equitable interest he may have in properties, including the Suburb L property and properties in Country B.
22On 25 January 2022 the wife filed an application for divorce in this Court.
23On 8 February 2022 the wife filed an Application in a Proceeding in this Court seeking that the husband be restrained from instituting proceedings in any other Court and, if he had, then that he be restrained from taking any further steps in the prosecution of those proceedings.
24On 15 February 2022 the husband filed a Motion in the M Court seeking a declaration that the M Court has competence to the exclusion of any other Court.
25On 1 March 2022 the M Court made orders, inter alia, that the M Court has sole jurisdiction to rule on the action of nullity of the marriage between the parties ‘as well as all its material effects’.
26On 1 March 2022 the M Court deferred the declaration of the separation of the parties patrimony until that Tribunal verified that the parties had not concluded any agreement on that issue.
27On 7 March 2022 the wife amended her proceedings in this Court to include parenting matters.
28On 8 March 2022 the husband filed his Response in this court seeking interim and final orders to permanently stay the wife's application.
29On 8 March 2022 the husband filed a Summons with the M Court seeking orders with respect to the annulment of the parties marriage, sole custody of the children, pleading that the wife has a psychological disorder, and sought a declaration of jurisdiction from the Tribunal. The husband also sought a declaration that each of the parties have their own patrimony because they had not signed an agreement to adopt the confusion of their patrimonies according to their religion.
30On 17 March 2022 service of the husband’s M Court process was effected by service on the wife’s father.
31On 4 April 2022 the husband filed a Summons in the Country B proceedings seeking an annulment of the marriage.
32The Country B proceedings were listed for first hearing on 5 April 2022. The wife did not attend. The proceedings were adjourned until 12 April 2022 at which time the wife was given two weeks to file a Reply to the husband's summons.
33On 7 April 2022 the wife filed an Application to Stay the Country B proceedings.
34On 17 May 2022 consent orders were made in this Court by Justice Rees providing inter alia for the parties to appoint a single expert to provide a report in relation to matters relevant to the forum dispute between the parties. The parties were to share the costs of the report equally. Upon receipt of the report the parties had liberty to approach this Court for the matter to be relisted.
35On 28 June 2022 orders were made in the Country B proceedings inter alia rejecting the wife's application to declare common patrimony and rejecting her application for a stay of those proceedings.
36In July 2022 orders were made for the wife to file material in the M Court such to be filed by 3 October 2022.
The wife’s application came before McGuire J on 4 October 2022. The injunction was described by his Honour in his judgment as “a ‘holding’ injunctive order pending the imminent release of an Expert Report commissioned by the parties in respect of the nature of the relevant law in [Country B]” (at [2]). His Honour, in his usual succinct but comprehensive style, addressed each of the parties’ evidence and the law, and ultimately determined to make an order in the terms of that sought by the wife.
The issue I am asked to determine is whether I consider in the exercise of my discretion it is just to make an order for costs on a party/party basis and if so in what amount. The Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) and authorities make plain that I can fix an amount for costs. As McClelland DCJ observed in Pascoe & Larsen (No 2) [2022] FedCFamC1A 126:
27.Rule 12.17 of the Rules sets out the methods of calculating costs. These include the Court fixing a specific amount for costs (r 12.17(1)(a)) or an order for the costs to be assessed on a particular basis (r 12.17(1)(b)).
28.In Stoian v Fiening (Costs) [2014] FamCA 944 at [91], Kent J endorsed the principles for applying a rule equivalent to r 12.17 when referring to r 19.18 of the now repealed Family Law Rules 2004 (Cth) as adumbrated by Einstein J in Idoport Pty Limited v National Australia Bank Limited & Ors [2007] NSWSC 23 at [9]. Those principles include:
i.the purpose of the rule is to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation;…
ii.the touchstone requires that the Court be confident that the approach taken to estimate costs is logical, fair and reasonable;…
iii.the fairness parameter includes the Court having sufficient confidence in arriving at an appropriate sum on the materials available;…
iv.a gross sum assessment, by its very nature, does not envisage that a process similar to that involved in a traditional taxation or assessment of costs should take place;…
iv.the gross sum “can only be fixed broadly having regard to the information before the Court”;…
(Citations omitted)
29.Consistent with those principles, it has been determined that where a Court orders a party to pay costs, it may be appropriate for the Court to fix a lump sum. By doing so, the Court can avoid further delay and inconvenience being occasioned by the requirement to tax a bill: Byrnes v Brisconnections Management Co Ltd (No 2) [2009] FCA 1432 at [51].
An application for costs is governed by the provisions of s 117 of the Family Law Act 1975 (Cth) (“the Act”), which provides a general rule that each party to proceedings should bear their own costs.
Section 117(2) reposes in the Court a discretion to make a costs order in circumstances where the Court determines that there are circumstances that justify it making an order and, if there are such circumstances, the Court may make such order as it considers just, having regard to the matters set out in s 117(2A).
In Penfold and Penfold (1980) 144 CLR 311, the plurality in the High Court determined that to make an order under s 117(2), the Court needs to make a finding of justifying circumstances as a preliminary prerequisite to the making of an order. Their Honours also observed that terms such as an exceptional case, special circumstances or a clear case are not necessary determiners of whether or not an order for costs should be made. All that is required or necessary is that there are justifying circumstances.
It is well-settled law that no one factor under s 117(2A) is determinative and the Court may give such weight as it considers relevant to any factor. In PBF as Child Representative for AF (Legal Aid Commission of Tasmania) & TRF & LKL (2005) 33 Fam LR 123, the Full Court observed:
41. … Nowhere in subs (2A) or elsewhere in s 117, is there any prescription that more than one factor must be present before an order for costs is made nor of comparative weight of the factors set out in subs (2A). As a consequence, there is nothing to prevent any factor being the sole foundation for an order for costs
Dealing now with the relative subsections in s 117(2A).
(a) The financial circumstances of each party to the proceedings
The party’s financial circumstances are set out in their financial statements. The wife in her submissions contends that the husband is in a superior financial position to her. The husband contends otherwise. The husband says that his real estate holdings are subject to litigation brought by his father claiming an interest in such property and he says there are restrictions on his capacity to access funds held in his name with banks in Country B. There is no doubt that the parties’ financial affairs are convoluted and complex. I am not within the confines of this Application able to resolve the competing assertions of the parties.
The husband’s written submissions make reference to what the wife has paid by way of legal fees but he has elected to place no evidence before the Court on this Application as to what he has paid by way of legal fees or the source of payment. Notwithstanding that oversight, the wife in her submissions said:
54. The Husband also filed a Costs Notice on 4 October 2022, which discloses that his costs have been paid from his savings, income and loans from his Father, despite his Financial Statement not disclosing any source of income. The Wife asserts that the Husband continues to work full-time. 54. I seek that [Mr Wakim] pays my costs in relation to my Interim Application of $20,318.01, as assessed pursuant to Schedule 3 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 within 14 days.
(b) Whether the parties are in receipt of legal aid
Not relevant.
(c) The conduct of the parties to the proceedings
The wife contends that the husband’s conduct is relevant to the granting of a costs order.
What is relevant is conduct of a party, which in some way or other leads to an increase in costs by the other party. Such factors may include uncooperative behaviour, obstruction, prolonging litigation or the bringing of unreasonable or unmeritorious applications. It may include non-disclosure or a failure to comply with the Rules of Court in relation to disclosure.
I am not satisfied that the conduct complained of is such to justify the making of a costs order.
(d) Whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the Court
No submission was put by the wife to warrant the making of an order under this sub-section.
(e) Whether any party to the proceedings has been wholly unsuccessful in the proceedings
The term “wholly unsuccessful” refers to a situation in which proceedings as a whole have been unsuccessful, rather than necessarily an application (see Bant & Clayton (Costs) (2016) 56 Fam LR 31).
The husband was not wholly unsuccessful.
(f) Whether any party has made an offer in writing
The wife says that on 25 and 27 January 2022, her solicitors wrote to the husband’s solicitors seeking an undertaking that he not commence family law proceedings in Country B. She says that the husband did not provide a written undertaking or respond to her letter of 27 January 2022.
On 30 September 2022, the wife’s solicitors sent a letter of offer to the husband’s solicitors. That offer proposed that the husband consent to an order restraining him from prosecuting the proceedings in Country B pending determination of the forum applications. The letter also proposed that the parties obtain a listing of the various forum applications with each party paying their own costs. The husband did not respond to this letter either.
The proposal was a sensible resolution of the applications with little perceived prejudice to the husband’s position. As it was, it represents what ultimately was ordered by Maguire J. It was imprudent of the husband not to respond. It was also imprudent not to accept such a sensible offer.
The wife also contends that she made an offer to resolve these costs proceedings by letter dated 8 November 2022, which forms an annexure to the wife’s submissions. As appears to be a recurring theme with the husband, he did not respond to that letter. Again it was imprudent not to respond.
(g) Any other matter the Court considers relevant
No other submissions were put by the wife which were said to be relevant.
The wife contends overall in relation to her application for costs that she was successful before his Honour on the relief that she sought and therefore it is just that the Court depart from the principle that each party bear their own costs. The wife also relies on the offer made on 30 September 2022. Had that been accepted, then the costs incurred by both parties would have been avoided.
Having regard to all of the wife’s submissions, I am satisfied in light of the offers of settlement made on 30 September 2022 and again on 8 November 2022 that there are justifying circumstances that the Court should depart from the general rule that each party to the proceedings should pay his and/or her own costs. Had they been accepted, then both parties’ costs would have been substantially lessened. A party may elect not to accept sensible offers to resolve aspects of proceedings. It is within their right to do so, but they do so at their peril.
I am satisfied that it is appropriate to fix costs in a set amount. The amount sought under Order 1 is said to be at scale and I have no reason to doubt that submission. To fix the costs avoids further costs and delay, which is consistent with the overarching purpose of family law practice and procedure as set out in s 67 of the Federal Circuit and Family Court of Australia Act 2021 (Cth).
Accordingly, I propose to make Order 1 as sought in the wife’s Application save that I will extend the time for payment to within 30 days. I also propose to make an order that the husband pay the wife’s costs of the costs application within the same time frame. I see no reason why the wife should have to await the completion of the proceedings in circumstances where the husband is paying his costs.
I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Schonell. Associate:
Dated: 22 December 2022
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