Wei & Xia (No 7)

Case [2024] FedCFamC1F 627

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Wei & Xia (No 7) [2024] FedCFamC1F 627

File number(s): SYC 196 of 2017
Judgment of: HARPER J
Date of judgment: 18 September 2024
Catchwords:

 FAMILY LAW – PRACTICE AND PROCEDURE – Where the husband files enforcement application in respect of costs order made against the wife in 2018 requiring payment of costs to the husband as agreed or assessed on a party and party basis – Where the final orders in the substantive proceedings require the husband to pay the wife $9,284 – Where the husband seeks the amount to be paid by him be offset against the amount owed by the wife pursuant to the 2018 costs order – Where the husband did not have his costs assessed and quantified by a registrar pursuant to Div 12.8.2 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“2021 Rules”) – Whether the 2018 costs order constitutes an enforceable “obligation to pay money” under the 2021 Rules – Where the absence of assessment of the husband’s costs is not an insuperable obstacle to ordering a set off – Power of the Court to make orders declaring amount owed under an obligation pursuant to r 11.07 of the 2021 Rules – Where the amount owed by the husband is set off against the amount owed by the wife, quantified in the same amount of $9,284 – Where there is no balance to be paid by the wife.

FAMILY LAW – JURISDICTION – Inherent jurisdiction to order set off of liquidated sum against unliquidated sum – Distinction between costs order and judgment for damages is unimportant to discretion to order set off – Where it is unnecessary to decide if the Court should exercise equitable jurisdiction to order set off.

Legislation:

Family Law Act 1975 (Cth) Pt VIII, s 105

Federal Circuit and Family Court of Australia Act 2021 (Cth) s 67

Family Law Rules2004 (Cth) (repealed) Div 19.6.2, rr 19.21, 19.22

Federal Circuit and Family Court of Australia (Family Law) Rules2021 (Cth) Pt 11.1 and Pt 12, Div 12.8.2, rr 1.04(1), 1.05(1), 11.01, 11.07
Cases cited:

Australian Beverage Distributors v Evans & Tate Premium Wines Pty Ltd (2006) 230 ALR 184; [2006] NSWSC 560

Collins & Olsthoorn (2005) FLC 93-216; [2005] FamCA 138

Foots v Southern Cross Mine Management Pty Ltd (2007) 234 CLR 52; [2007] HCA 56

Haines & Rader (No 5) [2023] FedCFamC1F 132

Hunter & Hunter [2019] FamCA 40

Lahoud v Lahoud [2012] NSWSC 284

Larkden Pty Ltd v Lloyd Energy Systems Pty Ltd [2011] NSWSC 1567

McDonald and McDonald (1976) FLC 90-047; [1976] FamCA 29

McMillan & McMillan [2016] FamCA 387

Newett & Newett (No 8) (2023) FLC 94-128; [2023] FedCFamC1A 7

Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28

Sunbird Plaza Pty Ltd v Maloney (1988) 166 CLR 245; [1988] HCA 11

Wei & Xia (2024) FLC 94-186; [2024]…

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AGLC
Wei & Xia (No 7) [2024] FedCFamC1F 627
Case
[2024] FedCFamC1F 627
Decision Date

CaseChat Overview and Summary

In the case of Wei & Xia (No 7), the husband filed an enforcement application regarding a costs order made against the wife in 2018, which required her to pay costs to him. The substantive proceedings resulted in orders requiring the husband to pay the wife $9,284, and he sought to offset this amount against the costs owed by the wife under the 2018 order. A significant issue was whether the husband’s costs were adequately assessed before the court could order a set-off. The husband had not had his costs assessed by a registrar, which posed a question about the enforceability of the 2018 costs order and the court's inherent jurisdiction to order a set-off.

The court found that the absence of a formal assessment of the husband’s costs did not necessarily preclude a set-off, given the overarching purpose of the Family Law Act and the rules. The court considered the inherent jurisdiction to order a set-off of liquidated sums against unliquidated sums and noted that the distinction between a costs order and a judgment for damages did not affect the discretion to order a set-off. The court determined that it was not necessary to decide if it should exercise equitable jurisdiction to set off the wife’s obligation to pay costs against the husband’s liability to pay her $9,284. Instead, the court found that it had the inherent jurisdiction to do so, guided by principles discussed in Lahoud and relevant authorities.

Ultimately, the court concluded that the absence of an assessment of the husband’s costs was not an insurmountable obstacle to ordering a set-off, and the court had the discretion to do so. Additionally, the court interpreted the powers under the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 to include the power to declare the amount owed by the wife to the husband, regardless of the absence of an assessment by a registrar. Although the husband's delay in seeking an assessment was a factor against a set-off, the court found it insufficient to deny the husband's request, especially given the substantial court resources consumed by these proceedings. The court ordered a set-off of $9,284, discharging the husband's obligation to pay the wife that amount.

ORDERS:
1. The wife is obliged to pay $9,284 to the husband under the 2018 costs order.
2. The wife's obligation under Order 1 is set off against the husband's obligation to pay $9,284 to the wife.
3. The husband's obligation under Order 5(g) dated 16 August 2023 is discharged by the set-off in Order 2.
4. The husband's Amended Application – Enforcement is dismissed with no order as to costs.

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

Respondent

ORDER MADE BY:

HARPER J

DATE OF ORDER:

18 SEPTEMBER 2024

THE COURT DECLARES THAT:

1. The Applicant Wife (“wife”) is obliged to pay the total amount of $9,284 to the Respondent Husband (“husband”) to comply with Order 2 made on 15 May 2018.

THE COURT ORDERS THAT:

2. The obligation of the wife stipulated in Order 1 is hereby set off against the obligation of the husband to pay $9,284 pursuant to Order 5(g) dated 16 August 2023.

3. The obligation of the husband stipulated in Order 5(g) dated 16 August 2023 is discharged by reason of Order 2 above.

4. The Amended Application – Enforcement filed by the husband on 19 July 2024 is otherwise dismissed, with no order as to costs.

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

Consequently, it is unnecessary to decide whether this Court should exercise an equitable jurisdiction to set off the wife’s obligation to pay costs under the May 2018 costs order against the husband’s liability to pay the wife $9,284. I am satisfied that this Court has inherent jurisdiction to do so. The principles discussed in Lahoud, and the numerous authorities discussed therein, offer an appropriate and cogent guide to the exercise of the discretion to make an order for set off of the type sought by the husband.CONCLUSION The absence of an assessment of the husband’s costs is not an insuperable obstacle to ordering a set off in the exercise of the inherent jurisdiction. The Court has a discretion to order a set off without an assessment. In addition, and consistently with this jurisdiction, since r 11.07(a) empowers the Court to declare the amount owing, it seems to me that it is also consistent with the overarching purpose to interpret the powers of enforcement in r 11.01 and r 11.07 as conferring a power to declare the amount owing by the wife to the husband pursuant to the May 2018 costs order, irrespective of any failure by the husband to seek an assessment by a registrar under the 2004 Rules and the absence of assessment of party and party costs does not preclude such a declaration where it would not be inequitable and the circumstances arising after the May 2018 costs order support it. It is true the husband has delayed in taking, indeed has never taken a step to have his costs assessed and quantified, is a factor weighing against the set off. However, I do not consider this factor to be sufficient to deny an exercise of discretion as the husband seeks. The husband served upon the wife an itemised costs account dated 12 June 2018. He did not delay in seeking a payment of costs, even if he failed to seek an assessment by a registrar. As noted the wife did not dispute the account dated 12 June 2018 until she filed her affidavit in response to the husband’s application presently under consideration. These proceedings have consumed an inordinate amount of court resources and should be brought to an end in all respects as expeditiously as possible. In light of the long complex history, the requirement to promote, and interpret the rules in accordance with, the overarching purpose, the need to finalise the proceedings as completely in all respects, and the relatively modest amounts involved, all combine to persuade me that a set off such as proposed by the husband would not be inequitable and should be ordered. The remaining problem is the amount of the set off. The husband’s claimed costs exceed his liability to the wife. However, the quantum of his costs on assessment under the May 2018 costs order could only be estimated for present purposes. The undisputed account dated 12 June 2018 is evidence which allows some understanding of the quantification of the husband’s costs on a basis separately to an assessment by a registrar. There is force in the wife’s submission that these claimed costs, as repeated in the other itemised costs accounts in his evidence, would represent, at least in part, full indemnification. On the other hand, although unquantified, I am satisfied that the husband’s costs on a party and party basis are no less than $9,284, but I cannot be satisfied they are any more. For the purposes of r 11.07(a) I will declare that the wife owes the husband $9,284 pursuant to the May 2018 costs order.

Ratio Decidendi

Legal Principle Established

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