PEREZ & MOLINA
[2021] FCCA 87
•27 January 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
| PEREZ & MOLINA | [2021] FCCA 87 |
| Catchwords: FAMILY LAW – Application for costs in respect of a discontinued application for divorce – respondent put to significant expense – costs awarded. |
| Legislation: Family Law Act 1975 (Cth), s.117 Federal Circuit Court Rules 2001 (Cth), r.21.02(2) |
| Cases cited: Colgate Palmolive Co and Anor v Cussons Pty Ltd [1993] FCA 801 Latoudis v Casey [1990] HCA 59 Penfold & Penfold [1980] HCA 4 Sala & Habner (No. 2) [2018] FCCA 2738 |
| Applicant: | MS PEREZ |
| Respondent: | MR MOLINA |
| File Number: | PAC 2394 of 2018 |
| Judgment of: | Judge Obradovic |
| Hearing date: | 26 November 2020 |
| Date of Last Submission: | 26 November 2020 |
| Delivered at: | Parramatta |
| Delivered on: | 27 January 2021 |
REPRESENTATION
| Appearing for the Applicant: | Mr Lee |
| Solicitors for the Applicant: | Harper James Law Group |
| Appearing for the Respondent: | Ms Nichelsen |
| Solicitors for the Respondent: | Sarah Bevan Family Lawyers |
ORDERS
That within 42 days the Wife pay the Husband’s costs in the amount of $22,780.51.
IT IS NOTED that publication of this judgment under the pseudonym Perez & Molina is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PARRAMATTA |
PAC 2394 of 2018
| MS PEREZ |
Applicant
And
| MR MOLINA |
Respondent
REASONS FOR JUDGMENT
Introduction
These are Reasons for Judgment in relation to an application for costs filed by the husband, Mr Molina on 13 July 2020.
On 29 May 2018, the wife, Ms Perez filed an Application for Divorce. The husband filed a Response to Divorce on 28 August 2018. The application ultimately was discontinued by the wife on 25 October 2019 after the matter had been on foot for over 12 months.
Factual Findings
The parties were married 2007. Together they have two children, who were born in 2006 and 2010 respectively.
In January 2014, the parties and their children migrated to Country A.
In December 2014, the husband commenced family law proceedings in Country A, those documents being served on the wife in or around January or February 2015. Orders were made temporarily restraining the children from leaving Country A.
On 3 March 2015, the parties entered into consent orders with respect to parenting, approved by a Judge of Court B of Country A.
In December 2016, the husband filed for a divorce in Country A.
In February 2017, the wife filed an application in Country A seeking approval to travel to Australia with the children without the consent of the husband. The wife was unsuccessful in this application and a further order was made again temporarily restraining the children from departing Country A.
The Country A parenting proceedings were set down for interim hearing on 2 May 2017 and judgment was delivered in respect of that hearing on 27 October 2017 dismissing the request to lift the departure prohibition order for the children. Prior to the delivery of that judgement, the wife left Country A on or about 24 May 2017 to return to Australia, and has remained here since. The children and the husband have remained living in Country A.
In 2017, the husband’s brother, who currently resides in Australia, commenced proceedings against the wife in Court F seeking possession of a property in Suburb C, where the parties had previously resided. In 2019, Justice D of Court F made orders dismissing the brother’s statement of claim and for the brother to pay the wife’s costs.[1]
[1] (Court F citation omitted)
In her amended defence filed in Court F in the proceedings commenced by the husband’s brother, verified by affidavit on 25 July 2017, the wife pleaded:
The Defendant [the wife] has a shared ownership of the property known as E Street, Suburb C with the husband. The couple are currently separated and filed for divorce in Country A.
In the defence filed in the same Court F proceedings in 2017, the wife pleaded:
The defendant [wife] has left Country A leaving power of attorney to her Country A lawyers to continue [the family law proceedings] on her behalf…
On or about 2 August 2017, the wife’s Country A lawyers, who remained acting for the wife in respect of the parenting proceedings, refused to accept service of the husband’s divorce application which had been filed in Country A the previous year.
On 31 August 2017, the wife commenced proceedings in this Court for parenting orders. In an affidavit filed in those proceedings, the wife deposed as follows:
In January 2017 I decided to inform my lawyer and ask them to locate my children’s documents with no success. That is when they found that there was an application for divorce that Mr Molina has lodged in December 2016.
On 7 November 2017, the husband filed a Response to the Initiating Application before this Court, seeking a dismissal of the wife’s application for parenting orders.
The wife withdrew her parenting application on or about 9 February 2018, subsequent to which the Court ordered that the wife pay the husband’s cost in the amount of $5,000 in respect of those proceedings.
On 2 May 2018, a judge of Court B made an order for service of the divorce application to be effected on the wife in Australia in accordance with The Hague Convention Rules of Service.[2]
[2] Affidavit of Mr Molina filed 21 March 2019 at [24]
The proceedings for divorce were commenced by the wife in this Court on 29 May 2018. The application as filed wrongly indicated that there were no existing orders about family law.
Furthermore the wife’s divorce application indicated that the father retained both children and did not allow them to return to Australia with the mother. The wife completely omitted to include any details of the consent orders she had entered into with the husband about the children, or the fact that there was an order restraining her from removing the children from Country A, in proceedings where she remained a party (or had been a party).
The husband filed a Response on 28 August 2018, seeking a dismissal of the application for divorce on the basis that “there are current divorce proceedings on foot in the Family Law Courts in Country A.” Annexed to the husband’s Response was a copy of an affidavit which had been filed in the earlier parenting proceedings commenced by the wife in this Court, where the husband deposed to the wife being angry with him for filing for a divorce and in March 2017 saying to one of the children in his presence “your dad filed for a divorce against me”.
Given that the husband contested that Australia was the appropriate forum to hear and determine the divorce application, the Court made orders on 29 October 2018, for the filing of evidence and preparing the matter for final hearing.
In early 2019, the husband’s solicitors attempted to correspond with the wife and/or her solicitors about the preparation of the expert’s report relevant to the divorce application.
In late March 2019, the husband filed his evidence in relation to the divorce application, including an expert’s report as to Country A law and the proceedings on foot in Country A, duly translated by a NAATI accredited translator. Further procedural orders were made on 29 March 2019, and the divorce application including the forum argument, was set down for final hearing on 31 October 2019.
On 22 May 2019, the application for divorce in Country A was granted and the court there made orders for the Divorce Order to be served on the wife.
The wife says that the Country A application for divorce was served on her by the Attorney’s General Department in Australia on 10 October 2018 and that she was advised on 12 August 2019 that the application for divorce was granted in Country A.
There was then further correspondence from the husband’s solicitor to the wife’s solicitor regarding the application for divorce in this Court, and the solicitor for the wife advised on or about 18 October 2019, that the wife was intending to withdraw her divorce application. Noting nothing had been filed and the orders made by this Court in respect of the hearing, the husband’s solicitors prepared and filed on behalf of the husband a case outline document on 24 October 2019,
On 25 October 2019, the wife filed a Notice of Discontinuance in respect of the divorce proceedings in this Court.
The husband now seeks costs of those divorce proceedings.
The husband says the cost he has incurred total $23,955.03 made up as follows:
a)Lawyers costs: $9,761.40 (pursuant to a costs notice)
b)Translation costs: $635
c)Costs of Expert report: $13,558.63 (USD$8,000)
In a letter dated 15 November 2019, the husband in an attempt to resolve the issue of costs amicably, inter alia, sought translation costs of $575 and costs for the expert’s report (being USD$8,000) of $11,592.51.
There is no explanation in the husband’s evidence as to the different amounts sought in the application for costs compared to the costs outlined in his solicitor’s letter dated 15 November 2019.
Relevant Legal Principles
The principles in respect of costs orders in family law proceedings are well known. The starting position with respect to costs, as set out in s.117 of the Act is that, subject to subsection 117(2), each party to proceedings under the Act shall bear his or her own costs.
The discretion to award costs is a broad discretion.[3]
[3] see for example Collins & Collins (1985) FLC 91-603.
The High Court held in Penfold & Penfold[4] that it is necessary for the Court to make a finding of justifying circumstances as an essential preliminary to the making of an order for costs. The Court is not required to specify the circumstances which justify the making of such an order.
[4] [1980] HCA 4; (1980) 144 CLR 311
As long as there is an essential preliminary finding that there are justifying circumstances to make a costs order, there is no additional or special onus which the respondent needs to establish for an order for costs. It is not the law that a costs order can only be made in what has been described as a ‘clear case’. [5]
[5] See in general the comments made by the Full Court in Wrensted & Eades [2016] FamCAFC 46 and in particular where the Full Court approved the comments of the judge below at [103]
In Latoudis v Casey[6] the High Court stated as follows:
… in exercising its discretion to award or refuse costs, a court should look at the matter primarily from the perspective of the defendant. To do so conforms to fundamental principle. If one thing is clear in the realm of costs, it is that, in criminal as well as civil proceedings, costs are not awarded by way of punishment of an unsuccessful party. They are compensatory in the sense that they are awarded to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings.”[7]
[6] [1990] HCA 59; (1990) 170 CLR 534
[7] Referred to in the context of family law proceedings by Judge Kemp in Coggan & Coggan [2012] FMCAfam 984 at [17]
In determining what order, if any, should be made under s.117(2) the Court must have regard to the prescriptive but non-exhaustive list of considerations in sub-section (2A).
Rule 21.02(2) of the Federal Circuit Court Rules 2001 (Cth) (“the Rules”) provides that in making an order for costs the Court may set the amount of costs; or set the method by which the costs are to be calculated; or refer the costs for taxation.
The Court has the power to order costs on an indemnity basis.[8] The principles in respect of indemnity costs orders are also well known[9], and in essence may be summarised as follows:[10]
a. the application of the ordinary well-settled rule of costs being ordered on a party and party basis will usually result in the amount received by the successful party falling short of a complete indemnity;
b. some special or unusual feature of the case must, in the circumstances, warrant departure from the well-settled practice of awarding costs on a party and party basis including an imprudent refusal of an offer of compromise; and
c. even if facts exist to justify the making of an indemnity costs order, such an order need not necessarily be made because costs are always in the discretion of the court.
[8] See for example: Kohan & Kohan (1993) FLC 92-340; Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534.
[9] See generally Sheppard J in Colgate Palmolive Co and Anor v Cussons Pty Ltd [1993] FCA 801; (1993) 46 FCR 225
[10] Sala & Habner (No. 2) [2018] FCCA 2738 at [3]
Determination as to Costs
The Court finds that there are circumstances justifying the making of a costs order.
There is no evidence of either party’s financial circumstances. There is no evidence that either party was in receipt of assistance by way of legal aid.
The wife has failed to comply with Court orders in these proceedings for the filing of her evidence. While such evidence was ultimately filed it was not done in accordance with orders. The husband likewise did not comply with filing directions, for reasons which are accepted by the Court.
The wife, according to her sworn defence filed in Court F was aware of the divorce proceedings being on foot in Country A as early as July 2017. The solicitors who acted for her on the filing of the amended defence in the Court F proceedings were the solicitors who acted for her in the filing of the divorce application herein. The documents filed in the two Courts are inconsistent as to the wife’s knowledge of the Country A family law proceedings, including the proceedings for a divorce. Furthermore, in earlier proceedings in this Court, the wife deposed to learning of the divorce application in Country A in January 2017.
The Court finds that the wife was aware of the proceedings commenced by the husband for a divorce in Country A in early 2017, and that she had participated in family law proceedings in Country A prior to her departure to Australia in May 2017. This does not mean that the wife did not have standing to commence proceedings in Australia for a divorce. Whether Australia was the appropriate forum was never determined as she withdrew her application for divorce, following the granting of a divorce by the Country A Court.
It is unclear, from the wife’s evidence and given that she had solicitors acting for her in the earlier parenting proceedings in Country A, to whom she had given a power of attorney, why she was not able to inform herself of the status of the divorce proceedings in Country A after service on her of that application on 10 October 2018, less than 5 months after she commenced divorce proceedings here and before the first return date of her divorce application. The Court does not accept the wife’s evidence that she “had no way of knowing if and when a divorce order finalizing our marriage would be made.”
Furthermore, there is no explanation as to why it took the wife from 12 August 2019 when she was served with the Country A Divorce Order until 25 October 2019 to file a Notice of Discontinuance in these proceedings, or indeed what steps she had taken in the Country A divorce proceedings, after being served with that application in October 2018.
The husband has incurred all cost in these proceedings unnecessarily. He has been entirely successful in these proceedings.
The Court is satisfied that a costs order in all of the circumstances is appropriate.
The husband has incurred significant disbursements in this matter, in particular for the preparation of an expert’s report and the costs of the translation of that report. Give that there is no explanation as to the differences in the amounts claimed by the husband in November 2019 and the application for costs, the Court orders that the wife pay the disbursements outlined in the solicitor’s letter dated 15 November 2019.
Next, it is appropriate that the wife pay the husband’s costs of these proceedings in accordance with Schedule 1 of the Rules, namely:
a)Item 1 – with respect to the substantive matter: $2,241 + $305
b)Item 13 – for 29 March 2019: $305
c)Item 6 – with respect to the substantive matter: $4,775
d)Item 3 – with respect to the costs application: $1,867 + $1,120
e)Item 14 – disbursements: $12,167.51
Total: $22,780.51
Given the lack of evidence as to financial circumstances, a period of 42 days is inferred as appropriate for the payment of such costs.
For all of those reasons, orders as set out at the forefront of these Reasons for Judgment will be made.
I certify that the preceding fifty-two (52) paragraphs are a true copy of the reasons for judgment of Judge Obradovic
Associate:
Date: 27 January 2021
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