Yusuf & Yusuf

Case [2022] FedCFamC1F 680

Federal Circuit and Family Court of Australia

(DIVISION 1)

Yusuf & Yusuf [2022] FedCFamC1F 680

File number(s): PAC 3522 of 2017
Judgment of: HANNAM J
Date of judgment: 8 September 2022
Catchwords: FAMILY LAW – COSTS – Leave to file application out of time – Costs sought by wife in relation to substantive property proceedings and associated stay proceedings – Where a loan agreement purported by the husband found to be a sham – Costs awarded to the wife as agreed or assessed
Legislation:

Family Law Act 1975 (Cth) s 117

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 12.13, 15.06

Cases cited:

Yusuf & Yusuf [2021] FamCA 116

Yusuf & Yusuf (No. 2) [2021] FamCA 513

D & D (Costs) (No.2) (2010) FLC 93-435

Gallo v Dawson (1990) 93 ALR 479

Penfold v Penfold (1980) 144 CLR 311

Division: Division 1 First Instance
Number of paragraphs: 50
Date of last submission/s: 18 March 2022
Place: Parramatta
Counsel for the Applicant: Ms Dart
Solicitor for the Applicant: Sanford Legal
Solicitor for the Respondent: Litigant in person (did not participate)

ORDERS

PAC 3522 of 2017

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MS YUSUF

Applicant
AND:

MR YUSUF

Respondent

order made by:

HANNAM J

DATE OF ORDER:

8 September 2022

THE COURT ORDERS THAT:

1.Leave is granted to the wife to bring her application for costs in relation to the substantive property proceedings out of time.

2.The husband pay the wife’s costs as agreed or assessed in respect of the substantive property proceedings commenced on 28 July 2018 and finally determined by his Honour Justice Foster on 12 March 2021.

3.The husband pay the wife’s costs as agreed or assessed in respect of the stay proceedings commenced by the husband and determined by Justice Foster on 16 July 2021.

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 Yusuf & Yusuf has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

HANNAM J:

INTRODUCTION

  1. This judgment concerns an application for costs made on behalf of an applicant wife in relation to property proceedings which were finalised some time ago.

  2. In her Application in a Proceeding filed 3 November 2021, the wife seeks and order that the husband pay her costs in relation to property…

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AGLC
Yusuf & Yusuf [2022] FedCFamC1F 680
Case
[2022] FedCFamC1F 680
Decision Date

CaseChat Overview and Summary

The wife sought to have the husband pay her costs as agreed or assessed in respect of the substantive property proceedings and in respect of the stay proceedings. This application arose out of proceedings that had been finalised in March 2021, and was made out of time, after the trial judge had retired. The husband opposed the application. The central issue for the court was whether the husband should bear the wife’s costs, in circumstances where the husband had not settled the matter before trial and had not complied with the conditions of the stay of the final orders. The husband had also discontinued his appeal against those final orders. The court accepted that the husband’s decision to pursue proceedings that had no evidentiary basis and were doomed to fail was a factor that favoured a costs order being made against him. The husband had also failed to comply with the conditions of the stay of the final orders and had discontinued his appeal against those orders. The court concluded that a costs order should be made against the husband.

The husband’s decision to pursue proceedings that had no evidentiary basis and were thus doomed to fail was a significant factor that favoured a costs order being made against him. The husband had the opportunity to finalise the proceedings nearly two years prior to final property orders being made in March 2021. Had the husband taken this opportunity, the parties would not have incurred further unnecessary legal fees, including fees associated with a four day final hearing, and the husband should have known at that stage that his contention that the second respondent held an equitable interest in the Suburb C property was not likely to succeed. The husband’s offer of settlement was significantly less than the outcome received by the wife and could not be seen to be a genuine offer to settle the proceedings. The husband’s decision to not comply with the conditions of the stay or to pursue his appeal was also a factor that favoured a costs order being made against him. The husband had been ordered to pay $50,000 to the wife within two months as a condition of the stay of the final orders, but he had not made that payment and the stay had consequently lapsed. The husband had also discontinued his appeal against the final orders.

In conclusion, the court accepted the submission of the wife that this was a case in which costs should be awarded against the husband. The husband had the opportunity to finalise the proceedings nearly two years prior to final property orders being made in March 2021. Had the husband taken this opportunity, the parties would not have incurred further unnecessary legal fees, including fees associated with a four day final hearing, and the husband should have known at that stage that his contention that the second respondent held an equitable interest in the Suburb C property was not likely to succeed. The husband’s offer of settlement was significantly less than the outcome received by the wife and could not be seen to be a genuine offer to settle the proceedings. The husband’s decision to not comply with the conditions of the stay or to pursue his appeal was also a factor that favoured a costs order being made against him. The court concluded that a costs order should be made against the husband.

The court ordered that the husband pay the wife’s costs as agreed or assessed in respect of the substantive property proceedings and in respect of the stay proceedings. The husband was ordered to pay the wife’s costs on an indemnity basis. The wife was also granted leave to commence the costs application out of time.

Orders

Orders of the court

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Background

Background to the litigation

The question for me now to determine is whether there are circumstances that justify departing from the usual Rule that each party shall bear his or her own costs.background The parties (“the wife” and “the husband”) were married in 1993 and separated in 2016. They were divorced in March 2018. In July 2018 the wife commenced parenting and property proceedings in the Family Court (as it was then known). At the time of filing her application, four of the parties’ children were under the age of 18 and the main asset available for distribution was the parties’ former matrimonial home at Suburb C (“the Suburb C property”), which had been converted into duplexes by the husband in 2010. On 18 December 2018, the husband’s nephew was joined to the proceedings as second respondent (“the second respondent”). At that time both the husband and the second respondent contended that the second respondent held an equitable interest in the Suburb C property as he had provided a loan to the husband to fund the development of that property. In May 2020 the parenting dispute was resolved by way of orders made with the consent of the parties. The property proceedings were heard on a final basis by Foster J over four days in September and December 2020. A central issue at trial was the question of asserted funds advanced by the second respondent to the husband to construct the Suburb C property. Final orders (“the March 2021 orders”) and Reasons for judgment were delivered in March 2021. In those Reasons, the trial judge found that the loan arrangement contended for by the husband and second respondent was a sham.[1] [1] Yusuf & Yusuf (No. 2) [2021] FamCA 513 at [2]. On 8 April 2021 the husband filed a Notice of Appeal against the March 2021 orders in the Full Court. On 29 April 2021 the husband filed an Application in a Case (as it was then called) seeking an unconditional stay of the March 2021 orders pending determination of his appeal. The wife opposed the husband’s application for such a stay. On 16 July 2021 orders were made that the March 2021 orders be stayed pending determination of the appeal on the condition that the husband pay to the wife the sum of $50,000 within two months. The husband did not make the required payment to the wife and consequently the stay lapsed. In August 2021 the trial judge retired. On 12 October 2021 the husband filed a Notice of Discontinuance with respect to the appeal. On 3 November 2021 the wife filed an Application in a Proceeding seeking that the husband pay her costs as agreed or assessed in respect of the substantive property proceedings and in respect of the stay proceedings and that leave be granted to commence the costs application out of time. The wife also sought an order which appeared to be in the nature of enforcement. As the trial judge had retired following final determination of the dispute, the application for costs was listed before me on 22 December 2021. At that court event the applicant wife clarified that costs were sought against the husband only and the second respondent was discharged as a party to the proceedings. The husband, who was represented by counsel at that court event, was ordered to file a Response to the Application in a Proceeding by 17 January 2022. The wife was also directed that if she sought an order in the nature of enforcement, such application should be made in accordance with the relevant rules.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

I accept the submission of the wife that this is a factor that favours a cost order being made against the husband. The husband had the opportunity to finalise the proceedings nearly two years prior to final property orders being made in March 2021. Had the husband taken this opportunity, the parties would not have incurred further unnecessary legal fees, including fees associated with a four day final hearing, and the husband should have known at that stage that his contention that the second respondent held an equitable interest in the Suburb C property was not likely to succeed. It is also noted that the husband’s offer of settlement was significantly less than the outcome received by the wife and could not be seen to be a genuine offer to settle the proceedings. Conclusion Balancing the relevant matters that I have set out and giving particular weight to the husband’s decision to pursue a case which had no evidentiary basis and was thus doomed to fail, and his decision to not comply with the conditions of the stay or to pursue his appeal, I am satisfied that a costs orders should be made against him as sought by the wife and as set out at the forefront of this judgment.

Ratio Decidendi

Legal Principle Established

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