Wei & Wei (No. 2)

[2007] FamCA 1107

FAMILY COURT OF AUSTRALIA

WEI & WEI (NO. 2) [2007] FamCA 1107

FAMILY LAW - CHILDREN – With whom the child Lives - With whom a child spends time - Child abduction - Non-compliance with orders for return of child

FAMILY LAW - PROPERTY - Settlement in relation to marriage

FAMILY LAW – COSTS – Between solicitor and client

Family Law Act 1975 (Cth)

APPLICANT: Mrs Wei

RESPONDENT: Mr Wei

FILE NUMBER: BRF 1377 of 2004

DATE DELIVERED: 16 August 2007

PLACE DELIVERED: Brisbane

JUDGMENT OF: Barry J

HEARING DATE: 16 August 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Hodges of Counsel appeared for the Applicant Wife

SOLICITOR FOR THE APPLICANT: James Noble Family Law

SOLICITOR FOR THE RESPONDENT: There was no appearance by the Respondent

Orders

FINAL ORDERS

Children’s Issues

IT IS ORDERED:

1. That the child of the marriage, a son born … February 2001, live with the Mother.

2. That the Father have no contact with the Child.

3. That the Mother have the sole day to day care of the Child.

4. That the Mother have the sole parental responsibility for the long term care, welfare and development of the Child.

5. That the Father be restrained from contacting or approaching the Child or the Mother whether by telephone, in writing or in person, or directing or authorising a relative or another party to do so.

6. That the Father be restrained from contacting any school which the Child attends.

7. That the Respondent Father be restrained from applying for a passport:

   (a)       in the name of the Child; and

   (b)       in the name of the Father and the Child;

   whether in Australia or any other country.

8. That the Father be restrained from removing or taking the Child out of Australia, or causing any other person to do so.

9. That the Australian Federal Police place the name of the Child on the Airport Watch List in force at all international points of arrival and departure in the Commonwealth of Australia and maintain the Child’s name on the Watch List until further Order of the Court.

10. The Wife is not to change the name of the Child without specific permission of a Court to do so.

Property Issues

IT IS ORDERED:

1. The Former Matrimonial Home at C and more properly described as Lot … on SP … County of … of … County and having title reference number … (the “C Property”), be sold and the proceeds divided in accordance with these Orders.

2. That the Wife be appointed the trustee for the sale of the C Property.

3. That the Wife shall have exclusive occupation of the C Property until it is sold.

4. That the sale procedure of the C property shall be as follows:

   (a)       it is to be listed for sale by private treaty for a period of two (2) months;

   (b)       the selling agent shall be as determined by the Wife;

   (c)       the list price shall be $590,000 or such lesser sum as the parties

   may agree or as may be ordered by the Court;

   (d)       if not sold within two (2) months as provided for in (a) herein the         property is to be auctioned within a further six (6) weeks by an      auctioneer appointed by the Wife.  The reserve price for the auction shall be as determined by the Wife.

5. The net proceeds of the sale of the C property shall be distributed as follows:

   (a)       in payment of the agent’s commission, advertising costs and

   reasonable expenses in placing the property in a fit state for sale;

   (b)       in payment of the legal costs of sale;

   (c)       the amount required to discharge the mortgage in favour of the

   Westpac Bank;

   (d)       the balance to be disbursed as follows:

   (i)payment to E Lawyers for the balance outstanding pursuant

   to the second mortgage over the subject property;

   (ii)payment to the Wife in the sum of $290,757 by way of   property

   settlement;

   (iii)the Wife to receive the balance of the sale proceeds in full and

   final settlement of all claims for outstanding costs, including all reserved costs.

6. Each party is to accept sole responsibility for any liabilities, debts, claims, actions, suits in their name, whether now or in the future, save and except for amounts in respect of the Wife’s application for costs.

7. A Registrar of the Family Court of Australia is appointed and empowered to forthwith execute all documents and do all such things to implement these Orders in substitution of the Husband.

8. Save as provided for in the Orders each party is to stand possessed of all chattels and other property in their respective names.

9. The Wife to retain the use and benefit of furniture in furniture pool 2 as set out in paragraph 158 of the Reasons for Judgment dated 9 May 2007.  The Wife is at liberty to sell such furniture and to retain the proceeds of such sale.

IT IS NOTED that publication of this judgment under the pseudonym Wei & Wei is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRF1377 of 2004

MRS WEI

Applicant

And

MR WEI

Respondent

And

INDEPENDENT CHILDREN’S LAWYER

REASONS FOR JUDGMENT

1. On 9 May 2007 I published reasons for judgment in this matter in relation to both property settlement and outstanding children's issues. 

2. For reasons given at the time I issued orders in draft form to allow either the wife to raise funds to acquire the property or for the property to be sold, and then I would know precisely how much had been realised on the sale.

3. There was also the outstanding issue of costs that fell for determination, and I made the orders in draft form so that that issue could be considered simultaneously with the orders in relation to the distribution of the net proceeds of the former matrimonial home on sale.

4. Written submissions on costs were received from counsel for the wife dated 12 June this year.  Notwithstanding a number of attempts to contact the husband, I am satisfied he has been served with all the various orders and directions, but no submissions on the issue of costs have been received from him.

5. The matters for determination on today's date include:

   (a) to receive additional information in relation to the question of sale of the former matrimonial home;

   (b) to clarify issues in relation to costs arising from the written submissions made on behalf of the wife; and

   (c) to ascertain the position in relation to a claim for costs by a legal firm, E Lawyers, who have previously acted for the husband in relation to various criminal charges.  They have a second mortgage over the property.  I will just pause there.

RECORDED   :   NOT TRANSCRIBED

1. In the reasons for judgment of 9 May this year at paragraph 159 I set out various calculations.  Those calculations were based on the schedule of assets and liabilities which had been produced by counsel for the wife, and they valued the matrimonial property at $590,000, which as I recall, was in accordance with the valuation that had been introduced into evidence.  In paragraph 106 of the reasons for judgment I have made reference to the schedule of assets and liabilities which had been produced.  

2. I am informed on today's date, by way of affidavit evidence from the wife, that a contract of sale for the subject property has now been entered into in the sum of $625,000.  It is a 90-day contract subject to finance.  I am informed that the subject to finance clause expires tomorrow. 

3. What I propose to do is to adjourn the issuing of the orders in this matter till next Monday, 20 August, and they are to issue unless notified by the solicitor for the wife that the contract has been terminated by virtue of the subject to finance clause.

4. On today's date I have received further written submissions on the issue of costs and other issues from counsel, together with two affidavits.  One is from a paralegal on the issue of service; the other was an affidavit of the wife in which she details expenditure that was required to be made on the former matrimonial home in order to place it in a fit state for sale. 

5. The calculations that I make are as follows: I have made various adjustments which are set out in paragraph 157 of the reasons for judgment, and they indicated that the total of net assets was $539,225.  To that figure I have added $35,000, which is the increase in the sale price of the former matrimonial home from $590,000 up to $625,000.  That gives adjusted net assets of $574,225.  However, reading the wife's affidavit - and I have no reason to doubt her evidence - she has appended accounts for advertising $648, termite treatment $497, capital works to ensure termite prevention in the future $2,500, commission is $18,694, legal costs estimated at $2000.  I am satisfied that that is an accurate estimate of what the conveyancing costs will be. 

6. There are caveats on the property, there are mortgages on the property, and obviously I expect that it will be necessary to approach the Registrar of the Court to have the conveyancing documents signed in lieu of the husband as he is likely to be uncooperative.

7. I have estimated release fees at $460 - I assume there are at least two mortgages on the property, and the word "caveats" is there. 

RECORDED   :   NOT TRANSCRIBED

1. I assumed two.  It does not matter because the word was used in the plural.  Those total costs are $24,799.  Taking that from the figure of $574,225 produces adjusted net assets of $549,426. 

2. As I have indicated at the commencement I have left the mortgage debt at $141,000.  Counsel, in his amended submissions, had adjusted the mortgage debt back to its present level of $139,000.  The matter is largely academic.

3. The adjusted net assets then are $549,426 in lieu of the figure of $539,225 used in paragraph 157 of the reasons for judgment.  The wife's entitlement at 60 per cent of $549,226, is $329,535.  I have brought into account the fact that the wife has received a car, jewellery, furniture, and superannuation to a value of $38,778.  Deducting that from the figure of $329,535 leaves a net amount payable to the wife of $290,757. 

4. The husband's entitlement, at 40 per cent of $549,226, is $219,690.  He has received $51,892, being his superannuation funds, the Singapore funds, the bank accounts, jewellery, and various furniture.  I am not going to go into the area of furniture. 

5. The husband's entitlement then is $219,690 less $51,892 equals $167,798.  That figure is slightly different from counsel's figures, and that would be attributable to the fact that we have used a different mortgage base; I have used $141,445 in accordance with the figure given to me, and counsel has calculated his figures on $139,000.

6. As I have said, the issue is largely academic in view of the orders for costs that I propose to put in place.  Counsel assessed the husband's entitlement at $168,902; my figure is about $1000 less than that, $167,798, as calculated using the above figures, but the upshot is the husband will receive nothing as a result of the costs orders that I propose to make.

7. I turn to consider the issue of costs.  I called the matter back on today in part because I could not understand the figures used in counsel's written submissions of 12 June.  The costs claimed are in two parts – (A) covers costs from the commencement of proceedings to a date of 25 January 2005.

RECORDED   :   NOT TRANSCRIBED

1. The costs which are labelled (B) are the costs from 25 January 2005 to the present time, including a four-day trial before myself which took place in August of last year. 

2. The matter first came before the Court after the husband had taken the child to Malaysia and left the child there with his parents.  The date of 25 January 2005 is the date the husband was released from prison.  There were orders made by Justice Jordan for his release, and he was dealt with also in the criminal courts for outstanding criminal charges to which he pleaded guilty. 

3. In relation to costs for the period covered by “A” the wife seeks indemnity costs.  I will be referring in detail to the reasons advanced by counsel in his submissions, but suffice it to say, in summary terms I accept the force of the written submissions on this aspect.

4. There is a copy of the costs agreement annexed from the wife's first solicitors, N & Associates and they are the current solicitors.  The hourly rate under the costs agreement is $300 an hour.  I accept that that is reasonable, having regard to commercial rates charged in the south east Queensland area in this jurisdiction.

5. There was annexed to an affidavit of Ms B of September 2004 two detailed bills; one covers the period 7 April 2004 to 14 May 2004.  The costs in accordance with the costs agreement there are $18,000.  The second one is for a period 17 May 2004 to 9 September 2004, and those costs are approximately $69,000; refer page 30 of the annexure to Ms B's affidavit.

6. In counsel's written submission he assesses the costs at $94,593 - just one moment - that - the adjusted figure, as I understand counsel, for the period covered by (a) is $99,018.  The costs as claimed in counsel's original submissions was $94,593.  That was reduced downwards because of an addition - instead of $109,386 it should have been $104,387. 

7. The bills that I have referred to from Ms B obviously do not cover the period 9 September 2004 through to 12 January 2005.  Details of costs for that period are to be found annexed to an affidavit by the wife filed on 14 August last year. 

8. I have perused in more detail the original costs attached to Ms B’s affidavit, which total in round terms $88,000 - it might be $87,000 - but obviously that bill does not cover the costs of the solicitor attending with the wife in S in Malaysia for a period of 10 days from 18 October to 28 October.  Those costs are set out in that further detailed bill of costs annexed to the wife's affidavit of 14 August.

9. At some time in about September 2004 Ms B left N & Associates to open her own firm.  The wife entered a fresh costs agreement.  Her costs were $200 an hour, which is more than reasonable in the circumstances, having regard to the complexity and difficulty of this matter generally.  The costs agreement is dated 4 January 2005, so much of the costs for this work has been backdated.  However, the client has signed the costs agreement and has agreed to pay the solicitors' costs pursuant to that costs agreement. 

10. The date is not greatly relevant, but it would appear that it was about mid-September 2004 that Ms B took over the file.  As I have said, counsel estimates the total of the wife's costs covered by period “A” - that is to 25 January - at $99,000, to allow calculations for the additional costs for the period to which I have made reference from September up till January 2005 you only need a further $11,000.

11. I have perused the bill from Ms B.  I am satisfied that most of the costs - well, virtually all of the costs claimed there are legitimate.  What has been deducted from the wife's cost is the sum of $32,800 received from a commercial television station.  She in fact received $50,000, but I was satisfied on the evidence at the trial moneys had been expended in other ways, and only $32,800 had been expended by way of costs and outlays.  I am not entirely sure the husband is entitled to the benefit of this credit, but as I have indicated, as events unfold, it is largely academic.

12. I would normally refer to taxation a matter where the costs are, for example, in excess of $100,000.  Here, the costs claimed overall are in excess of $150,000.  I am persuaded for a number of reasons not to do so.  One is the fact that I have been informed, and I accept that Ms B who was the solicitor who had the carriage of this matter with both firms of solicitors is terminally ill, and that unfortunate fact would prejudice the wife to a considerable extent if the matter had to proceed to a taxation.

13. There does not appear to be anything by way of principle in the cases to the effect that where costs are sought for large amounts Judges should not nominate a specific amount, but should refer the issue to taxation.  There appears to be arguments, both in favour of and contrary to that proposition.  It appears that it is open to the Trial Judge to exercise his or her discretion to award a grossed fixed sum of costs where it would be in the interests of justice between the parties.  In the Family Law context, this requires consideration of the terms of r 19.19(3).  

14. The matters relevant - apart from, of course, the overriding legislative requirement pursuant to s 117(2) - that the Rules require the Court to consider are the importance, complexity, or difficulty of the issues.  In that regard I would consider this matter to be of the highest level of importance - it involved international abduction, it involved contempt of Court and blatant contravention of Court orders.  It involves a consideration of the reasonableness of each party’s behaviour.  I accept that the wife's behaviour at all times was that of a model litigant.  The behaviour of the husband was scurrilous and dishonest in the extreme.  I have to consider the rates ordinarily payable to lawyers in comparable cases.  I have made my findings there that the costs as per the two costs agreements are well within normal limits for cases in this jurisdiction.

15. There is no suggestion that the conduct of any of the legal practitioners has been improper or unreasonable.  I have taken into account the time properly spent on the case, and whilst it is very significant, again I accept that not all the costs are being reimbursed.  Justice Fogarty, In theMarriage of Doherty (1996) FLC 92-652 - this is well before the introduction of the new Rules - but on the issue as to whether a Judge should assess the costs had this to say:

    “It is generally in the interests of the parties that the amount of costs   should be fixed for the obvious reason that it saves taxation with the   additional expense that is inevitably involved in that.  But where the   parties are unable to agree on a figure or where there is a significant   difference in estimates we are becoming increasingly reluctant to   impose a figure lest it appear unfair to one party or the other.  The   result of that is if the parties cannot agree that they will incur further   costs, but that seems to be characteristic of this case.”

16. There are other cases where this decision has not been followed.  Here, it is not the case of the husband disputing the costs and putting forward any alternative proposal; he has simply decided to take no further part in the litigation.

17. In the whole of the circumstances and for the reasons given, I am minded to make an order for a lump sum award of costs.  Bearing in mind the difficulties, expense, and delay of going to taxation, as I have outlined, the fact that the husband has been given credit for $32,800 received by the wife for a payment from a television studio, and the fact that the wife, by a long shot, will not be recovering the entirety of her costs, I will assess the costs of stage A on an indemnity basis at $99,000.

18. One of the reasons why I re-listed this matter was that E Lawyers had a second mortgage on the property.  When I am looking at the issue of costs I wanted to ensure the matter was going to be finalised, and that was best done by way of orders issuing from the Court.  That involved a consideration of what priority, if any, E Lawyers should receive in this matter.  The wife has made a concession that E Lawyers will be paid an amount of approximately $32,500 upon sale, and that will remove the second mortgage. 

19. The husband's entitlement to property settlement is in the order of $167,000, as I have outlined at the commencement of these reasons.  Deducting E Lawyers' costs of $32,500 leaves an entitlement of approximately $135,000 which, in the ordinary course of events, the husband could expect to receive deducting the assessment of indemnity costs of $99,000 leaves an entitlement of about $36,000.

20. I move to a consideration of costs pursuant to Pt B.  I observe that in relation to all of the costs in Pt A the sum of $99,000 is in extinguishment of all reserved costs covering that period, particularly the costs annexed to the wife's affidavit of 14 August last year breaks the costs up into certain periods, and I have had regard to that, I have had regard - already dealt with the issue of indemnity costs, and the attendances I find were reasonable, they have been incurred, the costs are reasonable, and that as a lump sum which cover all of the reserved costs, together with any outstanding costs for that period.

1. I then consider the costs from 25 January 2005 to the present time.  As I have said, the amount available is about $36,000.  The costs sought cover a four-day trial involving the independent children's lawyer, expert evidence and also counsel's fees.  I would not have ordered costs of an indemnity basis for this period, but I would certainly have been prepared to order party and party costs against the husband on a hundred per cent basis for that period.  The orders sought by the husband were not obtained by him.  The orders that he originally pressed for were unrealistic in the extreme.  He had taken a far more measured approach by the end of the four-day trial, but even then he was singularly unsuccessful. 

2. I have had regard to the assets of the parties as set out in the reasons for judgment I delivered in May this year, so I am aware of the financial circumstances.  I understand at the present time the husband is working in the financial sector and he says he is earning $800 a week.  No child support is being paid.  I would have thought $800 a week was very modest indeed for a professional income in the present economic climate, but I proceed on that basis.   

3. I am more than satisfied that party and party costs for the period covered by period B would be significantly greater than the $36,000 available to pay for same.  For that reason I do not propose to send the matter to taxation which would involve further costs and result in further delay.

4. The third reason why I had the matter listed today was consideration of E Lawyers' outstanding fees, and as I have noted, that is not opposed, that issue is now a non-event.

5. So to reiterate, I will accept the $99,000 in payment of costs for period A.  I will briefly refer to page 4 of counsel's written submissions, where it refers to the conduct of the husband, the husband had offered a prior undertaking not to remove the child and to hand in his current passport and that of the child to his solicitor for safekeeping.  He was actively taking steps to hide the child together with the sum of money held in a Singapore bank. He continued to take steps to deliberately hide the child after 6 May 2004.  I would add that his conduct generally amounted to the deliberate flouting of orders of this Court.

6. It is significant that even after the game was up and it was known that he had the ability to return the child, he continued to defy Court orders.  I was not privy to the hearing before Justice Jordan, obviously, but I am informed and accept the husband conducted his defence to the charges by taking every minute point even remotely possible, including requiring every witness for cross-examination.  Details and particulars of that are set out in the affidavit material and I have no reason to doubt counsel's submissions in that regard.

7. I am informed that on 1 July 2004 the wife offered to withdraw her contempt or contravention application if the orders were complied with and the child returned to her care.  Still, the husband refused to comply with Court orders.  It is submitted that he pretended to the Court that he had a problem with speaking and understanding English in circumstances where he had been working in the financial sector for many years and he had always communicated with the wife and child in English.  

8. The submission is made that the husband's conduct demonstrated an absolute lack of regard for the authority of the Court and for the welfare of his son, and for the rights and feelings of the wife.  The wife travelled to Malaysia to locate the child and received no assistance from the husband and his family either prior to leaving or while she was in Malaysia. I accept that the wife has at all times acted in an entirely appropriate fashion.

9. The balance of the costs; the wife says that if the balance of the moneys, which approximate $36,000, are paid to her she will accept that sum in full and final settlement.  I accept that, again, this is a gracious concession on her part.  It may be borne out of the reality that the expense of chasing the husband may prove more trouble than it is worth.  It is also, I expect, borne out of a frustration with the legal system that these proceedings have extended for as long as they have and at such enormous expense to her but I will make the orders on that basis.  I will direct that she receive the balance of all moneys outstanding upon the sale of the property in full and final settlement of all claims for costs, including reserved costs. 

10. As I have indicated, for the period covered by (b) I would be prepared to order 100 per cent of costs on a party/party basis.  The only orders - I will hear from counsel on this - but if you turn to the draft orders on page 33 onwards, page 34 so far as property settlement is concerned, the only amendment I see that needs to be made is to paragraph 15D.  That provided for the balance to be held on trust.  What I propose to do to the balance of funds, I will make the following orders, I will hear submissions on them.

11. 15d(i)            would be on settlement payment to E Lawyers for the balance  outstanding pursuant to the second mortgage over the subject       property.

    15(d)(ii)        A second payment in payment to the wife of the sum of $290,757                    by way of property settlement. 

    15(d)(iii)       The wife to receive the balance of the sale proceeds in full and             final settlement of all claims for outstanding costs, including all              reserved costs. 

12. Paragraph 18 I will amend; instead of giving him 14 days - whether he decides to sign the documents - I will reduce that to two days.

RECORDED   :   NOT TRANSCRIBED

1. I will just let the Registrar sign it.  I will delete paragraph 17 and I will just say a Registrar of the Family Court is appointed and empowered to execute all documents and do all such things to implement these orders in substitution of the husband. 

2. And I will make a further direction that these orders are not to issue before Monday, 20 August, and will only issue upon receipt of confirmation from the wife's solicitors that the contract of sale has become unconditional. 

RECORDED   :   NOT TRANSCRIBED

1. There is an addendum to the judgment that the husband has had the benefit of the Singapore funds and he will have the benefit of his superannuation in the fullness of time.  There was a bank account of $2500 at given point in time - whether it still exists or not is a matter for the husband.  He was to receive some jewellery.

RECORDED   :   NOT TRANSCRIBED

1. The jewellery can be handed over upon request when the husband's whereabouts are known. 

2. In relation to furniture pool one, furniture pool two set out in paragraph 158 of the reasons for judgment I make an order that the wife is entitled to retain that furniture for her own use and benefit, or is at liberty to sell such furniture and to retain the proceeds of such sale.

I certify that the preceding fifty six (56) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Barry

Associate

Date: 16 August 2007