Vu & Ton (No 5)
[2023] FedCFamC1F 157
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Vu & Ton (No 5) [2023] FedCFamC1F 157
File number(s): MLC 7739 of 2019 Judgment of: KARI J Date of judgment: 16 March 2023 Catchwords: FAMILY LAW – APPLICATION FOR INDEMNITY COSTS – Where the application for costs did not comply with Rule 12.13(3) – Where the Court considers it appropriate to dispense with the Rules and grant an extension of time – Where the Court considers it appropriate to make a costs order – Where the Court is satisfied that the circumstances of the case warrant an order for costs in a fixed amount Legislation: Family Law Act1975 (Cth) ss, 4, 117, 117(2A)
Federal Circuit and Family Court of Australia Act 2021 (Cth), s 76(1)(c)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 1.05, 1.31, 12.13(3), 12.17, 15.06(1).
Cases cited: Jess & Jess (No 3) [2023] FedCFamC1A 2
Kazimierczak & Koch [1987] FLC 91-849
Medlon & Medlon (No 6) (Indemnity Costs) [2015] FamCAFC 157; (2015) FLC 93-664
Munday & Bowman (1997) FLC 92-784
Nord & Van [2018] FamCAFC 75; (2018) FLC 93-833
Robinson and Higginbotham (1991) FLC 92-209
Ton & Vu [2020] FamCA 957
Vu & Ton (No 4) [2022] FedCFamC1F
Division: Division 1 First Instance Number of paragraphs: 75 Date of hearing: 8 February 2023 Place: Adelaide (via video link) Counsel for the Applicant: Dr Smith Solicitor for the Applicant: Lander and Rogers Counsel for the Respondent: Mr Atkinson Solicitor for the Respondent: Kennedy Partners Lawyers ORDERS
MLC 7739 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS TON
Applicant
AND: MR VU
Respondent
order made by:
KARI J
DATE OF ORDER:
16 March 2023
THE COURT ORDERS THAT:
1.That compliance with Rule 12.13(3)(b) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), by the applicant de facto wife, be dispensed with.
2.That within twenty-eight days, the respondent de facto husband do pay to the applicant de facto wife costs fixed in the amount of $90,000.
3.That the Application in a Proceeding filed 29 November 2022 and sealed 05 December 2022, together with the Response filed 20 February 2023 do otherwise stand 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 Vu & Ton has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
KARI J
INTRODUCTION
These proceedings relate to an application for costs made by the de facto wife.
The de facto wife seeks an order for indemnity costs in relation to an eleven day trial, where the Court was asked to determine the threshold jurisdiction question arising from the de facto relationship of the parties.
By judgment delivered on 5 September 2022 (Vu & Ton (No 4) [2022] FedCFamC1F), the Court relevantly made the following orders:
1.That pursuant to section 90RD of the Family Law Act 1975 (Cth) (“the Act”), there be a declaration that a de facto relationship existed between the parties between the following dates:
(a) 2009 and May 2012 in Country AA; and
(b) 9 July 2015 and 23 June 2019 in Victoria, Australia.
In addition, to the findings that a de facto relationship existed between the parties, the Court also determined that an alternate pathway to jurisdiction was made out in circumstances where:
(a)The parties agreed that they had been in a de facto relationship in Country AA;
(b)There was a child born of the relationship; and
(c)The contributions made by the de facto wife once the parties relocated to Australia in July, were accordingly contributions in relation to the de facto relationship.
THE COST CLAIM
The de facto wife’s claim for costs is made in circumstances where she was successful, and the de facto husband was entirely unsuccessful, in establishing two alternate, but equally valid pathways to enlivening the jurisdiction of the Court.
The de facto wife asserts that while the de facto husband engaged with the question of whether the parties lived in a de facto relationship beyond approximately August 2011 (which is when he asserted the de facto relationship had ended), the de facto husband never engaged with the alternate pathway to jurisdiction she had promoted; namely that she had made substantial contributions in relation to the de facto relationship in Victoria.
The de facto wife also asserts that the de facto husband’s failure to engage in the alternate jurisdictional pathway is all the more egregious, as it was one that she raised at an early stage in the proceedings and as early as a hearing in October 2020, not just in the lengthy opening given by her counsel at the commencement of the trial in February 2022.
In circumstances where the de facto husband was wholly unsuccessful in relation to both limbs of the argument advanced by the de facto wife, she asserts that not only is she entitled to an order for costs in her favour, but that the de facto husband’s failure to engage with the alternate jurisdictional pathway she had promoted warrants an order for indemnity costs. She asserts that “properly advised, he should have known that he had no chance of success”.[1]
[1] De facto wife’s written submissions filed 07 February 2022, paragraph 45.
The quantum sought by the de facto wife is an amount of $112,958.62 in the event of an order for indemnity costs. Alternatively, if the Court was not satisfied to make an order for indemnity costs, then the de facto wife asks the Court to consider an order for costs fixed in the amount of $67,112.24 on a party/party basis.
The de facto husband opposes the making of an order for costs. However, he says that if the Court considers it appropriate to make an order for costs, he urges the Court not to make an order for indemnity costs, but rather that the Court fix an amount as considered appropriate to remove the “future misery” for the parties in going through a taxation process.
PRELIMINARY ISSUE
The Issue
Before turning to the costs application, a preliminary issue has been raised by the de facto husband about the timing of the costs application with reference to the Federal Circuit and Family Court of Australia (Family Law) Rules (“the Rules”), which he has required the Court to determine – despite an acknowledgement from his counsel that the preliminary issue is readily overcome by an order extending time for the filing of the costs application pursuant to r 15.06(1).
The issue that has been raised relates to the operation of r 12.13(3) which provides:
(3) An application for costs may be made:
(a) at any stage during a proceeding; or
(b)by filing an Application in a Proceeding within 28 days after the final order is made.
Relevantly:
(a)Judgment was delivered and orders made in relation to the threshold question on 5 September 2022.
(b)The de facto wife filed her Application in a Proceeding seeking costs on 29 November 2022.
The de facto husband argues that as the Application in a Proceeding has been filed outside the 28 day time limit imposed by r 12.13(3)(b), the application should either be dismissed, or alternatively a grant of leave extending the time for the filing of the application is required.
The de facto wife argues that the application has been made within time.
Counsel for the de facto wife drew the Court’s attention to the wording of r 12.13(3)(b) and in particular the term “final order”, which is defined in r 1.05 of the Rules to mean:
… an order of a court that finally decides a proceeding.
Importantly, from the de facto wife’s perspective, the word “proceeding” is not defined in r 1.05, unlike the terms “financial proceeding”, “parenting proceeding” and “child support proceeding” which are defined.
In those circumstances, counsel for the de facto wife submits that the Court should apply the broadest interpretation to the term “proceeding” so as to encompass any and all type of proceedings before the Court.
With that foundation, it was submitted that as there remain proceedings before the Court, both parenting proceedings and financial proceedings, the costs application made by the de facto wife has been made within time.
In the alternative, counsel for the de facto wife submitted that in the event that the Court considered the application for costs to have been made out of time, then an extension of time ought be granted; submitting that depriving the de facto wife of pursuing a costs application would work a significant injustice against her in circumstances where she has a meritorious case for costs as she was wholly successful in establishing the jurisdiction of the Court and the de facto husband was wholly unsuccessful.
On the topic of the granting of an extension of time, counsel for the de facto husband did not make any submissions as to any prejudice to the de facto husband in the event that leave was granted.
Discussion
The rules of Court do not stand in isolation. They are promulgated pursuant to s 76 of the Federal Circuit and Family Court of Australia Act 2021 (Cth), which specifically permits (among other things) the making of rules of Court in relation to:
76(1)(c)providing for, or in relation to, any matter or thing in respect of which Rules of Court may be made under the Family Law Act 1975 for the purposes of their application to the Federal Circuit and Family Court of Australia (Division 1).
Importantly, the word “proceedings” is defined in s 4 of the Family Law Act1975 (Cth) (“the Act”) to mean:
… a proceeding in a court, whether between parties or not, and includes cross proceedings or an incidental proceeding in the course of or in connexion with a proceeding.
As recently identified by the Full Court in Jess & Jess (No 3) [2023] FedCFamC1A 2 at [52 – 58], there can be several different proceedings (sometimes involving different parties to each proceedings) within the same action number.
Each different set of proceedings may run concurrently, or they may be bifurcated and dealt with separately.
In Nord & Van [2018] FamCAFC 75 the Full Court considered the question of whether a declaration as to the existence of a de facto relationship was a final order, in the context of whether leave to appeal is required. In that instance Kent J, with the approval of Alstergren DCJ and Murphy J commented:
7. In Dahl & Hamblin[2011] FamCAFC 202; (2011) FLC 93-480 the Full Court of this Court stated, without elaboration, in respect of an appeal against a declaration made pursuant to s 90RD of the Act that “[w]e do not consider that leave to appeal was necessary in this matter” (at [51]).
8. Section 90RD(1) is expressed to operate where an application is made for an order under ss 90SE, 90SG or 90SM, or a declaration under s 90SL of the Act and a claim is made, in support of the application, that a de facto relationship existed between the applicant and another person.
9. Section 90RE provides that a s 90RD declaration has effect as a judgment of the Court. Subsection (2) provides that for the purposes of the Act (other than Part VII) a s 90RD declaration has effect according to its terms.
10. Whilst s 90RH provides for limited circumstances in which a s 90RD declaration may be varied or set aside, it does not seem to me that the existence of such a provision (analogous to s 79A with respect to final property settlement orders) renders the conclusion that a s 90RD declaration is interlocutory in nature.
11. In my judgment once a s 90RD declaration is made it has the effect of finally determining rights of parties as regards the existence of a de facto relationship for the purposes of Part VIIIAB of the Act such that the order or judgment can be regarded as final in the sense described in the authorities (Licul v Corney[1976] HCA 6; (1976) 180 CLR 213; Carr v Finance Corporation of Australia Ltd [1981] HCA 20; (1981) 147 CLR 246).
12. In my judgment leave to appeal is not required and the appeal proceeds as of right.
Therefore, it would appear that for the purposes of the application of r 12.13(3), there has been a “final order” in the proceedings that relate to the threshold jurisdiction question. Accordingly, the costs application, having been bought some twelve weeks after the final order was made on 5 September 2022, has been made outside the time limit prescribed by the rules.
However, this is not the end of the issue. In Kazimierczak & Koch [1987] FLC 91-849, the Full Court considered the same issue about the timing of an application for costs. Of importance, the Full Court commented:
Whatever may be the rule in other courts, the question of costs in the Family Court is regulated by sec. 117 of the Act. Since the power to award costs is derived from the statute any limitation as to the exercise of that power must be found within the statute itself.
Proceedings for an order for costs fall within para. (f) of the definition of ``matrimonial cause'' in sec. 4(1), that is to say, they must be proceedings ``in relation to... completed proceedings''. It may be that an application for costs is so remote in time from the original proceedings that it can no longer be described as relating to the proceedings which have been completed, but this is hardly the situation in the present case. It appears that the new r. 18 has been specifically inserted to impose a time limit to prevent applications for costs being made long after the conclusion of proceedings.
Taking these matters into consideration, it is important to note that while the application for costs has been made outside the time limit imposed by the rules, it has been made relatively proximate to the conclusion of the jurisdiction proceedings, and whilst there remain concurrent proceedings before the Court.
In addition, it is also of some significance to note that when the de facto wife filed her Amended Response to Final Orders on 11 September 2019, which is when she first engaged with the jurisdiction question, the de facto wife sought an order for costs under a “general” heading in the following terms:
8. That the Applicant pay the Respondent’s costs of and incidental to this amended Response to Initiating Application.
Arguably, in those circumstances, the costs application of the de facto wife had been made. At the very least, the de facto husband was on notice that should he be unsuccessful regarding any of the proceedings covered in the de facto wife’s Amended Response to Final Orders, then the de facto wife would be seeking an order for costs in her favour.
For all of these reasons, I consider it open to me to dispense with compliance with the Rules as provided for in r 1.31.
In addition, I consider it appropriate that I dispense with the r 12.13(3) when taking into account the submissions made as to the granting of an extension of time; in particular in circumstances where no meaningful submissions were made on behalf of the de facto husband opposing such a course of action.
THE LAW
Cost applications in respect of proceedings under the Family Law Act 1975 (Cth) are governed by s 117 of the Act.
The factors that are to be considered when contemplating the making of a costs order are those set out in s 117(2A) of the Act; albeit the Court may give such weight as it considers appropriate to any relevant factor (Medlon & Medlon (No 6) (Indemnity Costs) [2015] FamCAFC 157 at [24]).
The Rules also provide assistance when considering the making of an order for costs. In particular, r 12.17(1) provides the method for the calculation of costs:
12.17 Method of calculation of costs
(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.
In addition, Rule 12.17(3) sets out the matters that may be considered in the calculation of costs:
(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 proceeding, or in complying with pre action procedures;
(f)whether expenses (paid or payable) are fair, reasonable and proportionate.
DISCUSSION
In light of the provisions of s 117 of the Act, it is appropriate to identify and consider those relevant factors identified in s 117(2A).
In embarking on that task, I am mindful that I have previously considered the making of a costs order in these proceedings. Accordingly, some of the matters that were identified in those reasons remain relevant for the purposes of the present application.
The parties’ respective financial circumstances
In Vu & Ton (No 4) [2022] FedCFamC1F 668, at [166] I identified:
(a)The financial circumstances of the parties appear to be disparate. The de facto wife is largely financially dependent on the allowance of $1,500 per week provided to her by the de facto husband. She does not otherwise own any assets of significance (aside from her interest in the E Street property in Country AA the subject of the gift agreement), and she and X continue to reside in the former relationship home which is owned by the de facto husband.
(b)The de facto husband’s financial circumstances, while not entirely clear as he has not filed a Financial Statement despite orders that he do so, appears to be substantial, taking into account his ownership of property in Country AA and Australia, and the matters deposed to by the de facto wife as to the removal of funds in the millions of dollars from bank accounts in the post separation period.
Since delivering those reasons, the de facto husband has for the first time in these proceedings, filed a Financial Statement. In addition the de facto wife has filed an updated Financial Statement.
The parties have also each filed affidavits in the proceedings addressing their financial circumstances.
From reading those documents the Court understands that there remains much that is in dispute between the parties as to the financial circumstances of particularly the de facto husband.
From the de facto wife’s perspective, there has been little change to her circumstances since the reasons delivered on 5 September 2022. In her Financial Statement filed on 19 October 2022 supplemented by her affidavit filed 29 November 2022, the de facto wife asserts:
(a)Her sole source of income remains funds she receives from the de facto husband, presently in the amount of $1,796 per week.
(b)Her weekly expenses exceed the amount that she receives from the de facto husband and total approximately $2,280 per week.
(c)The de facto husband pays body corporate fees and rates for the property in which she and the child reside, in the amount of approximately $39,713 per annum; the body corporate fees in the amount of $35,000 being paid from the proceeds of a property sold by the de facto husband.
(d)Other than Motor Vehicle 1 and the interest in the property in Country AA, referred to in my earlier reasons and the subject of the gift agreement in favour of the child, the de facto wife does not hold any assets of significance.
(e)She has liabilities comprised of personal loans to fund her “ongoing expenses” for herself and the child in the amount of approximately $127,411 and outstanding legal fees to her solicitors in these proceedings in the amount of $62,812.
The position of the de facto husband however remains less clear.
The de facto wife in her affidavit filed 29 November 2022 asserts:
(a)The de facto husband has business interests in Australia and Country AA which generate an annual profit of approximately $40.5M.
(b)The de facto husband has told her that he has assets in Australia and Country AA in the amount of approximately $2 billion, inclusive of cash funds in the amount of $404M.
(c)The assets of the de facto husband in Australia comprise three real properties with a combined estimated value of $7.4M.
(d)That an amount of a little over $4.1M was withdrawn by the de facto husband from a Commonwealth Bank account at the time of separation.
(e)The de facto husband owns real property in Country AA and N City with a combined value estimated at $33.8M.
(f)There is also an amount of $748,172 held in her solicitors trust account from the sale of a property in Australia by the de facto husband described as the “Suburb C” property.
In his Financial Statement filed on 22 November 2022 the de facto husband asserts:
(a)He has no income.
(b)He is the beneficiary of expenses paid on his behalf in the amount of $1,500 per week in living expenses and $40,000 per week in legal fees.
(c)His expenses total $1,708 each week. However this figure appears translucent as those expenses do not include the $1,700 each month in child support / maintenance to the mother, but does include mortgage/rent, rates and fees for two properties, and other day to day living expenses.
(d)He owns two properties in Victoria valued at $2.8M and $2.6M respectively, together with an interest in the property in F City with a value of $4M.
(e)He owns Motor Vehicle 2 and otherwise has nominal funds in bank accounts.
(f)He identifies that he holds a 90% interest in an entity called D Pty Ltd, but asserts that it has no value.
(g)He asserts he has a personal loan to someone called Ms Q just shy of $11.5M.
In his affidavit filed contemporaneously with his Financial Statement on 22 November 2022, which is in almost identical form to the affidavit filed in support of his Response on 20 February 2022, among other things the de facto husband asserted:
(a)That a company he established in Country AA known as TT Pty Ltd (“TT Pty Ltd”) in 2008 was no longer trading and has been in liquidation since late 2015.
(b)There is a property in F City held in the child’s name.
(c)There was a property purchased by the de facto husband in the child’s name in N City in 2012, which was sold in 2022 (while these proceedings were extant) for $8M in N City currency, with the total proceeds paid to the de facto husband’s mother in repayment of “significant debt” owing to her.
(d)The entity known as D Pty Ltd has not traded since approximately early 2022.
(e)He borrowed the entire purchase price from his mother for two of the properties he owns in Australia, together with an undisclosed portion borrowed to fund the purchase of the third property, being the property in which the de facto wife and the child reside.
(f)TT Pty Ltd owes significant sums to various creditors totalling approximately $5.9M.
(g)He personally owes his mother an amount of $11,488,163 pursuant to a “[Country AA] Judgment”.
(h)He personally owes two persons/entities $15,498,966 (identified as “[CC Company’s] assets” and “[Ms UU]”).
With regard to all of the information contained in the Financial Statement and the Affidavit of the de facto husband on 22 November 2022, to be blunt, the financial circumstances of the de facto husband are labyrinthine, opaque and lacking in clarity.
Further, the Court is aware that Johns J made a range of orders on 1 December 2022, which appears to be aimed at narrowing the issues in dispute between the parties as to the financial circumstances of the parties and in particular those of the de facto husband. In particular, the de facto husband was ordered to provide a vast array of documents by way of discovery and orders were made for the valuation of the three properties in Victoria held by the de facto husband.
In addition, by those orders the proceeds from the sale of the Suburb C property were to be disbursed in the following manner:
(a)An amount of $12,215.50 characterised as “part property” in favour of the de facto husband, but payable to the de facto wife, to satisfy the costs order made in the same amount in her favour by my orders of 5 September 2022, which had not been paid by the de facto husband.
(b)An amount of $180,000 to the de facto husband characterised as “part property”;
(c)An amount of $150,000 to the de facto wife characterised as “part property”;
(d)A further sum of $30,000 to the de facto wife “to be characterised at trial”; and
(e)Unidentified amounts as and when they fall due to meet the child’s various expenses, including but not limited to private school fees and all associated expenses, private tutoring for the child, orthodontic fees and sports fees, “to be characterised at trial”.
On the face of the material deposed by the de facto husband, he asserts that he has a negative asset position. Whether this is an accurate picture however remains to be seen, remembering that in my reasons of 5 September 2022 I made adverse findings as to the credit of each of the parties, but specifically where the de facto husband is concerned I determined that his evidence at various times was “self-serving”, “confused” and “contradictory”.
Accordingly, on balance it is my view that the financial circumstances of the parties do not mitigate against the making of an order for costs.
Conduct of the parties in relation to the proceedings
The conduct of the de facto husband throughout the proceedings is one that bears consideration, not just because it is a factor prescribed by s 117(2A), but for reasons which shall become clearer, because the conduct of the de facto husband is relevant to any consideration as to whether on order for indemnity costs should be made.
The earlier identified submissions made by the de facto wife, that the de facto husband did not engage with the alternate pathway to jurisdiction, were properly made and they are ones with which I agree.
Moreover, and in addition to the submissions made on behalf of the de facto wife, in reasons delivered by Johns J on 18 November 2020 (Ton & Vu [2020] FamCA 957), consideration was given to the “nature and quality” of the de facto wife’s claim. Relevantly for present purposes, her Honour made the following comments:
40.Further, even if the applicant’s contentions as to the duration of the parties’ relationship are not accepted by the Court, the applicant contends that she has made substantial contributions to the relationship pursuant to s 90SM(4)(c) of the Act by way of her contributions to the welfare of the family constituted by the parties and their child. It is the applicant’s case that she has been the child’s primary care-giver for most of the relationship. Further, it is common ground that during the post-separation period, the applicant has been almost solely responsible for the welfare of the child, the respondent spending much of that post-separation period in [Country AA] and spending no time with the child during that period.
41.It was also submitted on behalf of the applicant that having regard to the duration of the relationship, the fact that there is a child of the relationship and the significant contributions made by the applicant to the care and welfare of the child, that any refusal by the Court to permit her to seek orders pursuant to s 90SM of the Act would result in a serious injustice to her.
…
45.Whilst there is a significant dispute between the parties as to the nature of their relationship in Australia, the fact that there is a child of the relationship and that the applicant has had the primary care of that child for significant periods, are factors that are likely to weigh heavily in favour of the applicant’s claim that the Court’s jurisdiction to entertain her property application is enlivened. That position is bolstered somewhat by the fact that the parties travelled to Australia on the one visa and lived together in a shared household, albeit noting that it is the respondent’s contention that the applicant was there as a nanny and not as his domestic partner.
46.Having regard to all of those matters, and doing the best I can in circumstances where the evidence is yet to be tested, I am satisfied that the applicant’s contentions as to the existence of the de facto relationship and further her entitlement to make a claim pursuant to s 90SM are arguable and well-founded.
For reasons that remain unclear, this sage view of her Honour (albeit preliminary), was entirely ignored by the de facto husband.
This factor speaks strongly in favour of the making of a costs order in favour of the de facto wife.
Whether any party has been wholly unsuccessful in the proceedings
In Robinson and Higginbotham (1991) FLC 92-209 at 78,417, Nygh J stated 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”.
On any view of the matter, the de facto husband was wholly unsuccessful in these proceedings, as he failed in thwarting each of the jurisdictional pathways advanced by the de facto wife.
This factor speaks strongly in favour of the making of an order for costs in favour of the de facto wife.
Conclusion as to whether a costs order should be made
In all of the circumstances that have been identified in these reasons, it is appropriate that there be an order for costs in in favour of the de facto wife.
Should the order for costs be made on an indemnity basis?
Again, the question of whether an order for indemnity costs should be made in favour of the de facto wife was one that I discussed in my reasons of 5 September 2022. I accordingly do not propose to repeat here those matters, in particular those raised at [175]-[176] of those reasons.
In addition, I have had regard to the helpful summary of the circumstances that might justify an order for indemnity costs, enunciated by Holden CJ in Munday & Bowman (1997) FLC 92-784 at 84,600:
(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 (see Fountain Selected Meats (Sales) Pty. Ltd. v. International Produce Merchants Pty. Ltd. [1988] 81 ALR 397.
(b)Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud (see Fountain Selected Meats (Sales) Pty. Ltd. (supra).
(c) Evidence of particular misconduct causing loss of time to the court and to other parties (see Tetijo Holdings Pty. Ltd. v. Keeprite Australia Pty. Ltd (unreported, Federal Court, 3 May 1991)).
(d)The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (see Ragatta Developments Pty. Ltd. v. Westpac Banking Corporation (unreported, Federal Court, 5 March 1993)).
(e)An imprudent refusal of an offer to compromise.
What is of significance for present purposes is that:
(a)On his own case, the de facto husband acknowledged that the de facto wife’s sole purpose for being present in Australia was to meet the needs of the child of the de facto relationship. How this could not have immediately been seen to satisfy the alternate pathway to jurisdiction, as highlighted in the reasons of Johns J as earlier identified, is confounding.
(b)Moreover, where the de facto husband was represented by experienced solicitors and counsel, the failure of the de facto husband to properly engage in that question is equally confounding.
With these factors in mind, the submissions made on behalf of the de facto wife that the objections to jurisdiction by the de facto husband were futile, “doomed or hopeless from the outset” have significant merit. [2]
[2] De Facto wife’s written submissions filed 07 February 2023, paragraph 45.
Of equally significant merit is the submission made on behalf of the de facto wife that, “properly advised” the de facto husband “should have known that he had no chance of success”.[3]
[3] De Facto wife’s written submissions filed 07 February 2023, paragraph 45.
These factors speak strongly in favour of the making of an order for indemnity costs in favour of the de facto wife.
I have earlier identified the difference in quantum sought by the de facto wife, namely an amount of $112,958.62 on an indemnity basis or $67,112.24 on a party/party basis (which is the balance of costs after deducting the amount previously recovered pursuant to the order for costs made on 5 September 2022).
I have also had regard to the terms of the Costs Agreement entered into by the de facto wife as annexed to her affidavit filed 29 November 2022.
The quantum of costs now sought by the de facto wife on an indemnity basis are almost double that which the de facto wife would be entitled to recover pursuant to the Schedule 3 of the Rules.
I do not however consider the costs actually incurred to be unreasonable or excessive.
I do however take into account a number of additional matters, and in particular:
(a)I am conscious that the proceedings before the court include parenting issues, and that the parenting proceedings were scheduled for trial at the same time as the threshold question. Ultimately however, the parenting proceedings were adjourned. However, time at the commencement of the trial was devoted to the parenting proceedings, as were documents filed throughout the proceedings. It is not clear to me the extent to which there is overlap in the costs schedule between the threshold proceedings and the parenting proceedings, however I would have to assume that there is some overlap given the proceedings were running concurrently.
(b)I am also conscious that in Vu & Ton (No 4) [2022] FedCFamC1F 668, I raised concerns about the conduct of each of the parties throughout the trial (see [57-59] in relation to the de facto wife, and [60-64] in relation to the de facto husband).
(c)I am also conscious that in Vu & Ton (No 4) [2022] FedCFamC1F 668, I made adverse credit findings about both of the parties (see [65-73]).
For all of these reasons, while I consider that there is a basis to make an order for indemnity costs, I do not consider that would be the appropriate course in this matter. Rather, I consider it appropriate to fix a sum nearing the actual costs incurred by the de facto wife.
I now make those orders that appear at the commencement of these reasons.
I certify that the preceding seventy-five (75) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Kari. Associate:
Dated: 15 March 2023
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