Vang & Chung (No 14)
[2025] FedCFamC1F 399
•18 June 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Vang & Chung (No 14) [2025] FedCFamC1F 399
File number: SYC 1433 of 2020 Judgment of: CHRISTIE J Date of judgment: 18 June 2025 Catchwords: FAMILY LAW – COSTS – Where both the first respondent husband and the second respondent seek costs following a final property hearing – Where wife was wholly unsuccessful at final hearing – Where wife was also wholly unsuccessful in numerous interlocutory applications – Where the conduct of the wife greatly lengthened proceedings – Where husband seeks costs on an indemnity basis – Where the wife's application, whilst unsuccessful, cannot be described as having no chance of success at the outset of proceedings – Held that the wife pay both the first and second respondents’ costs on a party/party basis. Legislation: Family Law Act 1975 (Cth) s 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 12
Cases cited: Colgate-Palmolive v Cussons Pty Ltd (1993) 119 CLR 118; [1993] FCA 801
Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish (2005) 33 Fam LR 123
Vang & Chung (No 13) [2025] FedCFamC1F 233
InterTan Inc v DSE (Holdings) Pty Ltd [2005] FCAFC 54
MCG Group Pty Ltd v Ftrus Pty Ltd (Formerly Fortrus Pty Ltd) [2017] FCA 359
Medlon & Medlon (No 6) (Indemnity Costs) (2015) FLC 93- 644
Munday v Bowman (1997) FLC 92-784
Ragata Developments Pty Ltd v Westpac Banking Corporation (1993) 217 ALR 175
Division: Division 1 First Instance Number of paragraphs: 43 Date of last submission/s: 16 May 2025 Date of hearing: Determined on the papers Place: Sydney (in Chambers) The Applicant: Litigant in person Counsel for the First Respondent: Ms Tabbernor Solicitor for the First Respondent: Broun Abrahams Burreket Solicitor for the Second Respondent: Mangioni Biggs + Co ORDERS
SYC 1433 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS VANG
Applicant
AND: MR CHUNG
First Respondent
MR D
Second Respondent
ORDER MADE BY:
CHRISTIE J
DATE OF ORDER:
17 JUNE 2025
THE COURT ORDERS THAT:
1.The wife pay the husband’s costs fixed in the sum of $330,000 such sum to be paid within 28 days.
2.The wife pay the costs of the second respondent, Mr D, in the sum of $270,811.61 such sum to be paid within 28 days.
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 a pseudonym Vang & Chung has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CHRISTIE J:
On 11 April 2025, I made orders and delivered reasons which related to the wife’s application for orders adjusting the interests of the husband and wife in property at the conclusion of their marriage.
These reasons for judgment should be read with my reasons in Vang & Chung (No 13) [2025] FedCFamC1F 233.
The husband has made an application that the wife pay his costs of those proceedings.
The second respondent (the husband’s father) also seeks that the applicant pay his costs of the proceedings.
The orders the respondent husband seeks are set out in written submissions as to costs filed by the husband as follows:
a.Within 90 days of the date of these orders, the costs respondent pay to the costs applicant costs fixed in the sum of $657,715.5, being:
i.$15,000 for costs fixed, on a party-party basis, from the commencement of the proceedings until 26 March 2021; and
ii.$642,715.5 for costs fixed, on an indemnity basis, from 26 March 2021 until the conclusion of the proceedings.
b.In the alternative, within 90 days of the date of these orders, the costs respondent pay the costs applicant the costs on a party-party basis, fixed in the amount of $330,000.
The second respondent seeks orders as set out at paragraph [1] of the Second Respondent’s Submissions on costs as follows:
[C]osts of the Wife’s Amended Initiating Application filed on 7 March 2025 in a fixed sum, calculated at the scale on a party/party basis in an amount of $270,811.61.
It is plain from the affidavit material and written submissions filed by the respondent wife that she opposes the making of costs orders against her.
THE LAW
The general rule is that each party pays his or her own costs: s 117(1) of the Family Law Act 1975 (Cth) (“the Act”).
The applicants seek a departure from the usual rule, such the wife pay costs of the husband and his father (the respondents). The wife seeks that the usual rule apply in respect of those applications.
Section 117(2) of the Act creates exceptions to the usual rule. It provides:
(2)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), (5) and (6) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
Both provisions read together make clear that, while the general rule in family law proceedings is that each party bears his or her own costs, the court may order a party to pay the costs of another where there are circumstances justifying the making of such an order.
Regard must be had to the considerations set out in s 117(2A) of the Act in determining whether or not to order a party to pay the costs of another. For the respondents to be successful in their costs applications, they must establish that the justice of the case requires an order for costs, by reference to the non-exhaustive list of statutory considerations set out in s 117(2A) of the Act:
(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.
No one factor under s 117(2A) prevails over any of the other factors. It is a matter of weight that is accorded to each of the relevant factors in the judge’s discretion (Medlon & Medlon (No 6) (Indemnity Costs) (2015) FLC 93-664 per Strickland J).
While there is “nothing to prevent any factor being the sole foundation for an order for costs” being made (Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish (2005) 33 Fam LR 123 at [41]) the factor must constitute the justifying circumstances.
In some cases, the justifying circumstances may be the financial circumstances of each of the parties.
The manner in which costs are to be assessed is dealt with in r 12.17(1) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) ("the Rules"), which provides:
(1) The court may order that a party is entitled to costs:
(a) of a specific amount; or
(b) as assessed on a particular basis (for example, party and party, solicitor and client or indemnity); or
(c) to be calculated in accordance with the method stated in the order; or
(d) for part of the proceeding, or part of an amount, assessed in accordance with Schedule 3.
Rule 12.17(3) sets out matters that may be considered in the determination of the quantum of costs, providing that:
(3) In making an order under subrule (1), the court may consider the following:
(a) the importance, complexity or difficulty of the issues;
(b) the reasonableness of each party's behaviour in the proceeding including by having regard to the matters set out in subrule 12.08(2);
(c) the rates ordinarily payable to lawyers in comparable proceedings;
(d) whether a lawyer's conduct has been improper, unfair, unreasonable or disproportionate;
(e) the time properly spent on the proceedings, or in complying with pre-action procedures;
(f) whether expenses (paid or payable) are fair, reasonable and proportionate.
The provisions of the Act and the Rules confer a broad discretion on a judge hearing and determining a costs application.
CONSIDERATION
I will deal with the husband’s application for costs first.
There is no question, having regard to the conclusions reached in the property adjustment proceedings between the parties, that the respondent wife has been wholly unsuccessful in the property adjustment proceedings. While the existence of a factor in s 117(2A) will not necessitate the making of a costs order it will enliven the jurisdiction to consider departure from the usual rule.
The applicant husband has identified that the respondent wife was also wholly unsuccessful in 23 of the 26 interlocutory applications which she has brought since June 2023 – with costs being ordered in only two of those applications.
In addition, the husband relies upon the provisions of s117(2A)(c), contending that the wife’s conduct of the proceedings has been productive of additional legal fees. I accept that to have been the case.
The wife submits that I should have regard to her financial circumstances when determining this application and I do. I accept that she has modest assets but this is not a bar to the making of a costs order. In that regard I must also have regard to the conclusions which I reached about the husband’s financial position – namely that he also has modest means, albeit he has been able to rely on the strong financial position of his parents both to fund his participation in the proceedings and his living expenses.
The wife is already significantly indebted to the husband by reason of the making of costs orders as follows:
(a)$9,194.07 ordered 29 February 2024 when her appeal was withdrawn;
(b)$15,000 ordered 30 October 2024;
(c)$10,000 ordered 20 December 2024;
(d)$4,500 ordered 16 October 2024 (the stay against which ended on the making of final orders);
(e)$15,615.50 ordered 26 March 2025; and
(f)$2,000 ordered 26 March 2025.
The husband has received $3,750 in respect of the above costs.
I also take into account outstanding costs orders made in favour of the second respondent (and a subpoenaed party) when considering the wife’s financial position.
I am asked to consider the husband’s application in two specific periods:
(a)From the filing of the application until the date on which the husband’s offer of settlement expired (26 March 2021);
(b)From the expiration date of the offer until the date of determination.
The husband seeks his costs of the first period be ordered in a fixed sum ($15,000). He says that he is unable to calculate the actual costs but says that he estimates that based on a costs notice that those fees were about $57,159 and he seeks 30%.
For the period from 26 March 2021 the husband seeks his costs of $642,715.5 on an indemnity basis (and in the alternative on a party/party basis) fixed in the sum of $330,000 (inclusive of the $15,000).
The wife raises two main issues in submissions filed in opposition to the making of costs orders – namely the merits of her original case and the disparity between the financial position of the husband (by reason of his access to his family’s money). Having heard and determined the property adjustment case and rejected the case on behalf of the wife I am not persuaded that her restatement of it in opposition to a costs order is relevant. I accept that her financial position is not strong. However, as previously stated, even impecuniosity is not a bar to the making of a costs order.
I am persuaded that it is appropriate to make an order for costs in favour of the husband. It is necessary then to turn to the question of quantum.
The power to make a costs order includes the making of an order for indemnity costs if there are exceptional circumstances which bring the matter within that band of cases where such an approach is warranted.
This Court has applied the principles discussed in Colgate-Palmolive v Cussons Pty Ltd (1993) 119 CLR 118 (“Colgate-Palmolive”) which require that a party seeking indemnity costs is able to demonstrate some “special or unusual feature in the case to justify the court in departing from the ordinary practice”. Writing in Munday v Bowman (1997) FLC 92-784 Holden CJ, in reliance on the principles set out by Sheppard J in Colgate-Palmolive, developed a useful list of circumstances in which it may be appropriate to consider the making of an order for indemnity costs. That list was as follows:
(a)Where it appears that an action has been commenced or continued in circumstances where a party properly advised should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts.
(b)Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud.
(c)Evidence of particular misconduct causing loss of time to the court and to other parties.
(d)The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions.
(e) An imprudent refusal of an offer to compromise.
(Citations omitted)
The capacity of the applicant to establish the existence of one of the matters in this list will not of necessity require the making of an order for indemnity costs but may be persuasive when viewed in light of the factors set out in s 117(2A) of the Act.
To these considerations may be added the observations of the Federal Court of Australia in InterTan Inc v DSE (Holdings) Pty Ltd [2005] FCAFC 54 (as cited in MCG Group Pty Ltd v Ftrus Pty Ltd (Formerly Fortrus Pty Ltd) [2017] FCA 359) where their Honours considered that special circumstances could include bringing and pursuing an application “not for the bona fide purpose of protecting and enforcing a legal right, but to achieve an ulterior or extraneous purpose” quoting Davies J in Ragata Developments Pty Ltd v Westpac Banking Corporation (1993) 217 ALR 175.
In this case the application for indemnity costs arises from two main contentions – the first is that the application for adjustment against the husband was ill conceived from its inception. I accept that in hindsight this appears evident. However, it must be acknowledged that the wife knew valuable property was held in the name of the husband in Australia and further had been held in the name of the husband outside Australia such that it could not be said to have been inevitable that the Court would find in due course that the husband was merely holding the property on behalf of another. I accept that it is not sufficient for the wife to argue that she was appearing without a lawyer. Secondly, the wife made a number of representations in writing which suggested she may be pursuing discovery with a collateral purpose. That is concerning conduct and led to the making of interlocutory orders. However, I cannot, on the basis of this aspect alone, find that this case falls into the category of rare cases in which an order for indemnification in respect of legal fees is warranted.
While in this case I am not persuaded that the circumstance warrant the making of an indemnity costs order, I am satisfied that the evidence establishes that the husband incurred costs of $642,715.50 (not otherwise the subject of a court order or concession) and further costs which the husband caps at $15,000. I am conscious that it would not be in the interests of the parties to engage in further litigation to assess costs and in those circumstances consider the lump sum of $330,00 proposed by the husband as being a reasonable approximation of party/party costs for the periods claimed and an appropriate exercise of my costs power. I will order accordingly.
I turn now to consider the costs application filed by the husband’s father, who was joined to the proceedings. One of the key factors relied upon by the husband’s father was the wife’s failure to comply with an order which required her to particularise the relief which she sought against him. The order was made on 21 February 2024 and complied with (in part) in January 2025.
The husband’s father’s submissions highlight specific examples of conduct, upon which reliance is placed, to submit that the proceedings were lengthened (and further costs occasioned) by the manner in which the wife conducted the proceedings. I accept that submission.
It is unnecessary for me to restate my conclusions about the wife’s financial position – already referred to above – I take them into account in respect of this separate application for costs.
The court has made a number of costs orders requiring the wife to meet the costs of the husband’s father:
(a)$7,500 on 30 October 2024;
(b)$1,500 on 18 November 2024;
(c)$2,000 on 16 October 2024;
(d)$9,411 on 13 December 2024;
(e)$1,500 on 23 December 2024;
(f)$7,692.06 on 26 March 2025.
Those costs remain outstanding.
I have had regard to the costs schedule attached to the affidavit filed in support of the application. I am satisfied that the calculation of the party/party costs of the husband’s father at scale are not unreasonable and it is in the interests of avoiding further litigation (having regard to the number of applications in this matter) to fix costs as sought.
I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Christie. Associates:
Dated: 18 June 2025
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