Wei & Xia (No 6)

Case [2024] FedCFamC1F 545

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Wei & Xia (No 6) [2024] FedCFamC1F 545

File number(s): SYC 196 of 2017
Judgment of: HARPER J
Date of judgment: 15 August 2024
Catchwords:

FAMILY LAW – COSTS – Financial circumstances a neutral factor – Where no party wholly unsuccessful – Where wife prosecuted factual claims which she must have known to be substantially untrue - Where the wife rejected two formal offers of settlement from the second and third respondents – Imprudent refusal of second offer made after parties’ evidence served and lengthy trial had commenced – Costs ordered on party/party basis up until date of second offer – Indemnity costs ordered from date of second offer.

FAMILY LAW – COSTS – Where the intervenor joined the proceedings as creditor for unpaid legal fees – Where the intervenor filed an Application in a Proceeding seeking that the husband pay their costs on an indemnity basis or in the alternative on a party/party basis – Where the intervenor submits that their involvement in the proceedings was necessitated by the husband’s non-compliance to pay a judgment debt or any provision for payment – Husband is ordered to pay the intervenor’s costs in a fixed sum.
Legislation:

Family Law Act 1975 (Cth) Pt VIII, ss 106B, 117

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 12.17(1)
Cases cited:

Atkins & Hunt (Costs) [2017] FamCAFC 131

Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119

D & D (Costs) (No 2) (2010) FLC 93-435; [2010] FamCAFC 64

Greedy and Greedy (1982) FLC 91-250; [1982] FamCA 41

Harris & Dewell (No 2) (2018) FLC 93-863; [2018] FamCAFC 180

Kohan and Kohan (1993) FLC 92-340; [1992] FamCA 116

Limousin v Limousin (Costs) (2007) 38 Fam LR 478; [2007] FamCA 1178

Moorcroft & Moorcroft (2020) 60 Fam LR 361; [2020] FamCAFC 83

Munday and Bowman (1997) FLC 92-784; 22 Fam LR 321

Parke & The Estate of the Late A Parke (2016) FLC 93-748; [2016] FamCAFC 248

Pascoe & Larsen (No 2) [2022] FedCFamC1A 126

PBF (as child representative for AF (Legal Aid Commission of Tasmania)) & TRF & AKL (2005) 33 Fam LR 123; [2005] FamCA 158

Penfold and Penfold (1980) 144 CLR 311; [1980] HCA 4

Phillips & Hansford (2020) FLC 93-941; [2020] FamCAFC 28

Prantage & Prantage (Costs) [2014] FamCA 850

Rankin & Rankin (No 3) [2019] FamCAFC 133

Re JJT; Ex parte Victoria Legal Aid (1998) 1998 CLR 184; [1998] HCA 44

Sfakianakis & Sfakianakis (2019) 59 Fam LR 419

Wei & Xia (No 5) (2023) 67 Fam LR 421

Wei & Xia (2024) FLC 94-186

Division: Division 1 First Instance
Number of paragraphs: 82
Date of hearing: On the papers
Place: Sydney
Solicitor for the Applicant: Broaden Legal
Solicitor for the First Respondent: Metro North Legal
Solicitor for the Second and Third Respondents: MLH Lawyers
Solicitor for the Intervener: V Pty Ltd

ORDERS

SYC 196 of 2017

FEDERAL CIRCUIT AND FAMILY COURT…

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AGLC
Wei & Xia (No 6) [2024] FedCFamC1F 545
Case
[2024] FedCFamC1F 545
Decision Date

CaseChat Overview and Summary

The case of Wei & Xia (No 6) involved a family law dispute between Ms Wei and Mr Xia, with Mr B Xia and Ms Siang also named as respondents, and V Pty Ltd as an intervenor. The primary issue before the court was the allocation of costs arising from the proceedings, particularly in light of the wife's rejection of settlement offers and her prosecution of claims that were found to be substantially untrue. The court had to determine whether the financial circumstances of the parties, the wife's conduct, or other factors justified a costs order against her.

The court examined whether the wife's rejection of a settlement offer made by the second and third respondents, after the parties' evidence had been served and a lengthy trial had commenced, constituted a justifying circumstance for awarding costs against her. It was noted that the wife's factual assertions were often unreliable or baseless, and her claims about her role in the family business were unconvincing. The court found that the wife's conduct in the proceedings, including her refusal to negotiate and the prosecution of claims she knew to be untrue, justified a costs order against her. The court ruled that the costs should be assessed on a party/party basis up until the date of the second offer and on an indemnity basis thereafter.

The court also addressed the application by V Pty Ltd, which sought its costs on an indemnity basis or alternatively on a party/party basis, claiming that their involvement was necessitated by the husband's non-compliance with a judgment debt. The court ordered the husband to pay V Pty Ltd's costs in a fixed sum of $25,000. The court dismissed other applications in the proceeding by the second respondent and the intervenor.

In summary, the court ordered that the wife pay the costs of the second and third respondents up until a specified date on a party/party basis and thereafter on an indemnity basis. The husband was ordered to pay the costs of V Pty Ltd in a fixed sum. The other applications in the proceeding were dismissed.

Orders

Orders of the court

SYC 196 of 2017

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MS WEI

Applicant

AND:

MR XIA

First Respondent

MR B XIA

Second Respondent

MS SIANG

Third Respondent

V PTY LTD

Intervenor

ORDER MADE BY:

HARPER J

DATE OF ORDER:

15 AUGUST 2024

THE COURT ORDERS THAT:

1. The Applicant Wife pay the costs of the proceedings of the Second and Third Respondents as agreed or assessed on a party/party basis up to and including 14 October 2020, and thereafter on an indemnity basis.

2. The First Respondent Husband pay the costs of the intervenor fix in the amount of $25,000.

3. The Application in a Proceeding on 5 September 2023 by the Second Respondent be otherwise dismissed.

4. The Application in a Proceeding filed on 18 September 2023 and the Application in a Proceeding filed on 7 October 2022 by the intervenor be otherwise dismissed.

Note: The form of the order is subject to the entry in the Court’s records.

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

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.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

The parents argued that the making of an excessive offer far in excess of one’s legitimate entitlement and a refusal to negotiate may be factors that justify a costs order. CONCLUSION ON JUSTIFYING CIRCUMSTANCES I do not consider the financial circumstances of the any party to disclose or deny a justifying circumstance. I accept the conduct of the proceedings by the wife was disorganised at times, but many other factors, described at [3] of the judgment, contributed to the fragmented nature of the hearing. The cross-examination of the father was a difficult process in part because of the need for an interpreter, and the opacity of some of the answers. I accept the wife’s submission that neither party was wholly unsuccessful, even though she failed in a substantial part of her case. However, I find that the wife’s conduct in the proceedings more generally, as submitted by the parents, justify an award of costs against her. In particular the rejection of the second offer of settlement was both improvident and unreasonable. These conclusion are supported by the following matters. As the judgment makes clear, numerous material factual assertions relied upon by the wife in support of her case were found to be unreliable or baseless. For example her claims to have been a senior management figure in the “family business” were rejected. In the judgment I concluded:342.The wife’s claims about entitlements to a “share of profits” appear to be no more than self-serving assumptions. I am not satisfied that the wife has proved any entitlement for the husband or her to receive profit distributions, nor any pattern of distribution from the family business to either of them pursuant to such an entitlement. As already pointed out, the wife herself conceded she never actually received a share of profits, just a notional distribution at best, on occasion for the purpose of convincing a lender to grant a loan. Nor is there any persuasive evidence that the husband actually received payments as a “share of profits” between 1997 and 2018. On the contrary, what the spouse parties did receive was considerable largesse from the parents in that period. 343.Overall I conclude that the wife’s evidence about her own role and the role of the husband in the business activities of the parents’ company was unconvincing and I reject it. The discussion above persuades me that the Court should be slow to draw the inferences from the face of most of the documents relied upon by the wife. For the reasons given, almost all the documentary evidence is inadequately contextualised and there is reason to conclude its contents were often unreliable. The evidence demonstrates that the wife had a limited understanding herself of how the businesses in [Country F] operated, relied primarily on what she thought various documents showed, and gives no persuasive basis for her assertion that the husband controlled the family business since 2009. Quite apart from her admissions that she did not work between 2000 and 2016, and only ever received “paper” profits, this deficit in her evidence undermines her assertion that she herself held a senior management position. I am not persuaded she has proved her assertions that the husband held a senior management position such as Chairman or General Manger or controlled the business of the company either as a result of his shareholding or on some other basis, such as by agreement with his parents.

Ratio Decidendi

Legal Principle Established

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