Pen & Vun (No 2)
[2022] FedCFamC1F 1018
Federal Circuit and Family Court of Australia
(DIVISION 1)
Pen & Vun (No 2) [2022] FedCFamC1F 1018
File number(s): PAC 3665 of 2018 Judgment of: HARPER J Date of judgment: 20 December 2022 Catchwords: FAMILY LAW – COSTS – Husband seeks costs in a fixed amount on an indemnity basis – Orders previously made permanently staying the wife’s property proceedings – Wife wholly unsuccessful – Where wife’s proceedings in Australia held to be relevantly vexatious and oppressive so as to justify a permanent stay – Wife is impecunious – Indemnity costs not justified – Costs ordered in a fixed amount. Legislation: Family Law Act 1975 (Cth) s 117 Cases cited: Atkins & Hunt (Costs) [2017] FamCAFC 131
Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119; [1995] FCA 350
Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) & Fish (2005) 33 Fam LR 123; [2005] FamCA 158
Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Ltd (1988) 81 ALR 397; [1988] FCA 364
Han & Ngo [2021] FamCAFC 97
Harris & Dewell (No 2) (2018) FLC 93-863; [2018] FamCAFC 180
Moorcroft & Moorcroft (2020) 60 Fam LR 361; [2020] FamCAFC 83
Parke & the Estate of the Late A Parke (2016) FLC 93‑748; [2016] FamCAFC 248
Pen & Vun [2022] FedCFamC1F 678
Prantage & Prantage (Costs) [2014] FamCA 850
Robinson & Higginbotham (1991) FLC 92–209; [1991] FamCA 5
Sfakianakis & Sfakianakis (2019) 59 Fam LR 419; [2019] FamCAFC 54
Division: Division 1 First Instance Number of paragraphs: 47 Date of last submission/s: 28 November 2022 Date of hearing: On the papers Place: Sydney Counsel for the Applicant: Self-represented litigant Counsel for the Respondent: Mr Chen Solicitor for the Respondent: Ausjuris Legal Pty Ltd ORDERS
PAC 3665 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS PEN
Applicant
AND: MR VUN
Respondent
order made by:
HARPER J
DATE OF ORDER:
20 December 2022
THE COURT ORDERS THAT:
1.Within 21 days, the applicant pay the respondent’s costs fixed in the amount of $14,000.
2.All outstanding applications be otherwise dismissed.
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 Pen & Vun has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARPER J:
Introduction
These are property proceedings between the Applicant Wife, Ms Pen (“the wife”) and the Respondent Husband, Mr Vun (“the husband”).
The wife commenced proceedings in Australia on 4 May 2020, seeking property adjustment orders pursuant to s 90SM of the Family Law Act 1975 (Cth) (“the Act”) (“property proceedings”). The husband filed an Application in a Proceeding seeking a permanent stay of the property proceedings on 22 April 2021, on the basis that this Court is a clearly inappropriate forum (“permanent stay proceedings”).
On 7 September 2022, I delivered judgment permanently staying the wife’s Australian proceedings for property adjustment orders. The relevant procedural history and background to these proceedings are set out in that judgment: Pen & Vun [2022] FedCFamC1F 678 (“Pen & Vun”) at [2]–[23]. I will not repeat what I have set out in that judgment unless necessary for this judgment, except to observe here that the wife commenced numerous proceedings in Country D with respect to property, both prior and subsequent to her property proceedings in Australia: Pen & Vun at [8]–[21].
By the orders made on 7 September 2022, I gave the parties leave to file an application for costs within 28 days.
On 4 October 2022, the husband filed an Application in a Proceeding seeking costs associated with, and incidental to the permanent stay proceedings. Orders were subsequently made for the filing of material, with the application being heard in chambers and on the papers.
Orders sought as to costs
By way of his Application in a Proceeding filed on 4 October 2022, the husband seeks the following orders:
1.Pursuant to s 117(2) of the Family Law Act1975 (Cth) and Order 2 of his Honour Justice Harper’s orders dated 7 September 2022, ORDER that the Wife pay to the Husband costs associated with and incidental of the Husband’s application for permanent stay, summarily assessed to be $20,991.14 (inclusive of any GST).
2.Any such further and other orders as the Court thinks fit.
(As per the original)
In support of his proposed orders the husband relied upon an affidavit sworn by his solicitor filed 4 October 2022. According to this evidence, the claim for $20,991.14 in costs is a claim for full indemnification.
In her written submissions filed on 28 November 2022, the wife seeks orders that:
1.The Applicant’s application for costs filed 4 October 2022 be dismissed, or that the amount sought by the Applicant be reduced as the Court considers fit.
In orders dated 24 October 2022, I granted leave for the wife to file and serve any affidavit and written submissions in response to the husband’s application for costs. The wife filed her documents on 28 November 2022, which was out of time, and the wife sought no dispensations for late filing. I will, however, have regard to this material.
In the above mentioned orders dated 24 October 2022, I granted leave for the husband to file submissions in reply to the wife’s costs submissions, by no later than 28 November 2022. The husband filed no further material.
The Law
The relevant principles with respect to costs are well settled, and have been explained many times by the Full Court, for example, in Parke & The Estate of the Late A Parke (2016) FLC 93-748 (“Parke & The Estate of the Late A Parke”), followed in Atkins & Hunt (Costs) [2017] FamCAFC 131. The Court has a wide discretion, which is to be exercised judicially.
In proceedings to which the Act applies, the starting point is that each party shall bear his or her own costs: s 117(1). If, however, the Court is of the opinion that there are justifying circumstances, the Court may make such order as to costs and security for costs as the Court considers just: s 117(2).
When considering what, if any, order for costs should be made, the Court must have regard to the factors set out in s 117(2A):
(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.
It is well settled that no one factor in s 117(2A) has priority, nor must more than one factor be satisfied; rather, any one factor may be sufficient; Prantage & Prantage (Costs) [2014] FamCA 850 at [12]; Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) & Fish (2005) 33 Fam LR 123 at [41].
The first question is whether the husband has established any circumstances which justify departing from the position that each party pay their own costs, and the making of a costs order in his favour. The second question is whether, if there are circumstances justifying a costs order, the wife should pay the husband’s costs on a basis, such as indemnity costs or as a fixed sum, other than costs as agreed or assessed on a party and party basis.
Discussion
It is convenient to address each of the matters set out in s 117(2A) to the extent that I have considered them relevant to my determination as to costs.
Section 117(2A)(a) – the financial circumstances of the parties
The wife submitted that her financial circumstances are “poor”:
… I do not own any property in Australia or overseas… At present, I am also subject of a $1.2 million judgment debt to [Mr Vun] from a Court in [Country D].[1]
[1] The wife’s submissions filed 28 November 2022, paragraph 6.
In the wife’s financial statement, filed 14 April 2022, she deposes that her average weekly income is $368 with her weekly expenditure totalling $1183. The source of her weekly income is said to be $8 per week from the husband in child support, between $600 to $800 from Centrelink fortnightly and income from casual employment. The wife provided a redacted copy of her tax return for the 2020 to 2021 financial year which listed her taxable income as $5,180 for that year.
The husband did not provide any additional material with respect to his financial situation beyond his reference to Pen & Vun at [27] where I made a finding that the material assets of the parties are located in Country D.
The husband’s solicitor deposed that:
I am instructed and verily believe that both the Husband and Wife are impecunious in Australia, but they both have substantial assets in [Country D]. I formed this belief from reading the numerous affidavits and asset disclosure documents in these proceedings.[2]
[2] Affidavit of Man Yeung filed 4 October 2022, paragraph 5.
Neither party provided, nor sought to rely on, evidence with respect to any assets or property held by them in Country D.
I am satisfied that the parties’ financial position, in Australia at least, is very poor.
The Full Court confirmed in Han & Ngo [2021] FamCAFC 97:
61.… there is ample Full Court authority that even impecuniosity is not a bar to an order for costs being made where there is a circumstance that otherwise justifies it (D & D (Costs) (No 2) (2010) FLC 92–435), as is the case here.
I do not find that the wife’s impecuniosity of itself should prevent a costs order being made in the husband’s favour. The wife’s financial circumstances do, however, bear upon the quantum of costs ordered as I will set out below.
Section 117(2A)(b) – whether any party to the proceedings is in receipt of assistance by way of legal aid
The wife was in receipt of a legal aid grant and represented by G Lawyers from 4 February 2021 until 30 June 2021 and, thus, for part of the property proceedings. The wife was self-represented for the totality of the permanent stay proceedings.
The husband was not a recipient of legal aid at any point in the proceedings.
Therefore, I do not consider this is a relevant factor.
Section 117(2A)(c) – the conduct of the parties
The husband submits that the wife commenced these proceeding for “some ulterior motive”; Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Ltd (1988) 81 ALR 397 at 401 (“Fountain Selected Meats”) and that the wife’s conduct was oppressive and vexatious.
In respect of the property proceedings commenced by the wife I noted in Pen & Vun that:
28.In answers to questions from the bench, the wife, who was self-represented through an interpreter, made clear that she presses her claims in this Court because she is dissatisfied with the outcome in the [Country D] courts.
29.Although the wife seemed to contest the husband’s medical condition, her position was ambiguous. I accept the husband is seriously ill, and the proceedings in this Court are unnecessarily burdensome for this reason.
30.The wife’s proceedings this Court are oppressive and vexatious for the above reasons. I am satisfied that this Court is a clearly inappropriate forum for property adjustment orders and the wife’s proceedings should be permanently stayed.
The husband argued that:
The Wife’s oppressive and vexatious conduct is made worse when the Court considers the Wife knew about the Husband’s [terminal illness] since 2 March 2020, one year before the Husband’s permanent stay application.[3]
[3] The husband’s submissions filed 15 November 2022, paragraph 11(c).
I am satisfied that the wife’s conduct in the proceedings, which I found to be oppressive and vexatious, constitutes a justifying circumstance for a costs order against her.
Section 117(2A)(e) - whether either party has been wholly unsuccessful
In Robinson & Higginbotham (1991) FLC 92–209 the Full Court noted that the concept of being wholly unsuccessful is “a situation in which the proceedings as a whole have been unsuccessful. In other words, in which an application which was without merit has been dismissed.”
I am satisfied that the wife was wholly unsuccessful with respect to the permanent stay proceedings the subject of this costs judgment, and the property proceedings, which were permanently stayed.
This factor weighs in favour of a costs order being made against the wife.
Section 117(2A)(g) – such other matters as the court considers relevant
The wife implores the Court to have consideration to the fact that she was self-represented through an interpreter during the course of the permanent stay proceedings. I have taken this into account.
Conclusion on Justifying Circumstances
Having regard to the fact that the permanent stay proceedings were necessitated by the wife’s conduct in instituting and continuing the property proceedings in Australia despite the proceedings on foot in Country D, and that the wife was wholly unsuccessful in both the permanent stay proceedings and as a consequence the property proceedings, I am satisfied these factors justify an order for costs in the husband’s favour.
The question, then, is the basis on which costs should be awarded.
Indemnity costs
The affidavit of the husband’s solicitor details the calculation of the husband’s costs incurred and incidental to the husband’s permanent stay application. The husband argues that costs should be awarded on an indemnity basis resulting in a quantum of $20,991.14 (inclusive of any GST).
The award of indemnity costs in this Court has regularly been called a significant departure from the normal standard, rare, and requires something exceptional: Harris & Dewell (No 2) (2018) FLC 93-863, where the Full Court said:
23. In Kohan and Kohan, the Full Court held, in applying the principles expounded by Sheppard J in Colgate-Palmolive, that an order for indemnity costs represents a “very great departure from the normal standard”. In the later decision of the Full Court in Prantage & Prantage, Thackray and Ryan JJ referred to Kohan and other authorities in the Full Courts of both this Court and the Federal Court of Australia as well as the state appeal courts. Their Honours concluded (at [86]) that the “usual rule” continued to apply in respect of awards of costs in this Court notwithstanding the Full Court accepting that the difference between party/party costs and a party’s actual costs has continued to grow significantly.
24. That proposition also derives support from what Callinan J said in Arundel Chiropractic Centre Pty Ltd v Deputy Commissioner of Taxation. His Honour said that an order for indemnity costs should “be exceedingly rare, as they have a tendency to encourage extravagance and put the quantum of legal fees beyond the effective scrutiny of the courts and their taxing officers”.
25. The rarity of an order for indemnity costs can also be seen illustrated by the comments of Lindgren J in NMFM Property Pty Ltd v Citibank Ltd (No 2), referred to by their Honours in Prantage (at [102] – [103]). Lindgren J said that there is no rule that indemnity costs will be ordered “where the losing party was guilty of ethical or moral delinquency in the antecedent facts which have given rise to the litigation.”
(Footnotes omitted)
The Full Court confirmed this position in Moorcroft & Moorcroft (2020) 60 Fam LR 361.
Relying on Fountain Selected Meats at [401] the husband argued the wife had an “ulterior motive” in bringing the proceedings in Australia which supports an indemnity costs order in his favour. I understood him to argue that the existence of the asserted ulterior motive was the factor which gave the wife’s proceedings the relevantly exceptional quality.
In identifying the “ulterior motive” the husband pointed to the fact that the wife conceded she had brought proceedings in Australia because she was dissatisfied with the outcome of proceedings in Country D, and the existence other proceedings in Country D: Pen & Vun at [11], [17], [20] and [28], as well as the conduct of the wife in pressing the proceedings knowing the husband had a terminal illness. An “ulterior” motive is one which is concealed and often bears no proper relationship to the proceedings in question. I am not persuaded the wife’s motive was ulterior or clandestine in any relevant sense, she was very open and clear about her motives. I am not persuaded the situation is relevantly exceptional to justify an award of indemnity costs.
Specific amount
The husband also argues that the in light of the husband’s terminal illness, costs should be awarded as a fixed sum rather than being referred for costs assessment.
The Court has power to fix a specific sum for costs. I accept the circumstances of this case make it desirable for a specific amount to be fixed, “so as to avoid the parties being involved in lengthy, contentious and expensive assessment of the costs”: Sfakianakis & Sfakianakis (2019) 59 Fam LR 419 at [37]; Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 120.
Murphy J observed in Parke & The Estate of the Late A Parke at [130]:
If the court is to fix a sum it should be “fixed broadly having regard to the information before the Court”… The process does not “by its very nature … envisage that a process similar to that involved in a traditional taxation or assessment of costs should take place” …
As the husband has provided the Court with the itemised bill of costs issued by his solicitor, I am satisfied that there is a sufficient basis in the evidence and it is appropriate to make an order for costs in a specific amount.
Taking account of the factors considered above, I find that it is appropriate to make a costs order of $14,000 in the husband’s favour.
I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Harper. Associate:
Dated: 20 December 2022
0
7
0