Zha & Wun (No 9)

Case [2024] FedCFamC1F 792

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Zha & Wun (No 9) [2024] FedCFamC1F 792

File number: SYC 4269 of 2020
Judgment of: SCHONELL J
Date of judgment: 22 November 2024
Catchwords: FAMILY LAW – COSTS – Where each of the parties sought a costs order against the others – Where costs were sought on an indemnity basis or alternatively costs in accordance with scale or as assessed – Consideration of factors under s 117 of the Family Law Act 1975 (Cth) – Where the Court is satisfied there are exceptional circumstances warranting indemnity costs given findings of non-disclosure– Costs ordered on an indemnity basis – Where costs for some discrete applications are excluded – Where the conduct of the second and fourth respondent was such that the Court found it disentitles them to a costs order.
Legislation: Family Law Act 1975 (Cth) s 117
Cases cited:

Bant & Clayton (Costs) (2016) 56 Fam LR 31; [2016] FamCAFC 35

Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225

Fitzgerald (as Child Representative for A (Legal Aid Commission of Tasmania)) v Fish (2005) 33 Fam LR 123; [2005] FamCA 158

Kohan and Kohan (1993) FLC 92-340

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

Yunghanns & Ors v Yunghanns & Ors and Yunghanns (2000) FLC 93-029

Zha & Wun (No 6) [2024] FedCFamC1F 519

Zha & Wun (No 8) [2024] FedCFamC1F 648
Division: Division 1 First Instance
Number of paragraphs: 62
Date of hearing: 7 November 2024
Place: Sydney
Counsel for the Applicant: Mr Reynolds
Solicitor for the Applicant: Pickering Pendleton
Counsel for the First Respondent: Mr Gray
Solicitor for the First Respondent: York Law
Counsel for the Second, Third and Fourth Respondents: Mr Turnbull
Solicitor for the Second, Third and Fourth Respondents: David H Cohen & Co

ORDERS

SYC 4269 of 2020

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

MS ZHA

Applicant
AND:

MR WUN

First Respondent

MR A WUN

Second Respondent

MS YANG (and another named in the Schedule)

Third Respondent

ORDER MADE BY:

SCHONELL J

DATE OF ORDER:

22 NOVEMBER 2024

THE COURT ORDERS THAT:

1.The first respondent pay the wife’s costs of the proceedings on an indemnity basis up until the joinder of the second and fourth respondents and thereafter the first, second and fourth respondents jointly and severally pay the wife’s costs of the proceedings on an indemnity basis with the exception of the wife’s costs in relation to the applications filed by the wife on 25 August 2023 and 23 July 2024, the tax invoice issued by EO Valuers dated 14 July 2024 and the costs of the single expert engaged by the wife to value a property in China.

2.For the purposes of the determining the quantum of costs payable:

(a)Within 28 days of the date of these Orders, the wife serve upon the first, second and fourth respondents an Itemised Costs Account for the costs claimed by the wife on an indemnity basis in…

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Zha & Wun (No 9) [2024] FedCFamC1F 792
Case
[2024] FedCFamC1F 792
Decision Date

CaseChat Overview and Summary

In the case of Zha & Wun (No 9), the parties contested the allocation of costs following extensive litigation concerning family law matters. The applicants, Ms Zha and the husband, sought a costs order against the respondents, Mr Wun, Mr A Wun, Ms Yang, and another named party. The proceedings involved complex issues of disclosure, non-disclosure, and the existence of undisclosed assets, particularly a company registered in Country WW, which was found to be the alter ego of the husband. The court was required to determine the appropriate basis and quantum of costs, considering the conduct of the parties and the findings made during the proceedings.

The primary legal issue before the court was the basis upon which costs should be awarded, whether on an indemnity basis, in accordance with a scale, or as assessed. The court needed to consider the relevant factors under section 117 of the Family Law Act 1975 (Cth), including the conduct of the parties, the findings of non-disclosure, and the overall fairness of the allocation of costs. The court found that the husband's non-disclosure was egregious and that the second respondent's conduct was perfidious, warranting an indemnity costs order. However, the court excluded certain costs from the order, such as those related to specific applications and expert fees.

The court ordered that the husband should pay the wife's costs of the proceedings on an indemnity basis up until the joinder of the second and fourth respondents. Thereafter, the husband, the second, and the fourth respondents were to jointly and severally pay the wife's costs on an indemnity basis, excluding specific costs related to certain applications and expert fees. The court mandated that the wife provide an itemised costs account to the respondents, who could then dispute any costs within a specified timeframe. If unresolved, the matter would proceed to a costs assessment by the court. The court dismissed other applications filed by the parties, and certified for the attendance of senior and junior counsel for the final hearing. The form of the order was subject to entry in the Court’s records.

Orders

Orders of the court

SYC 4269 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MS ZHA

Applicant

AND:

MR WUN

First Respondent

MR A WUN

Second Respondent

MS YANG (and another named in the Schedule)

Third Respondent

ORDER MADE BY:

SCHONELL J

DATE OF ORDER:

22 NOVEMBER 2024

THE COURT ORDERS THAT:

1. The first respondent pay the wife’s costs of the proceedings on an indemnity basis up until the joinder of the second and fourth respondents and thereafter the first, second and fourth respondents jointly and severally pay the wife’s costs of the proceedings on an indemnity basis with the exception of the wife’s costs in relation to the applications filed by the wife on 25 August 2023 and 23 July 2024, the tax invoice issued by EO Valuers dated 14 July 2024 and the costs of the single expert engaged by the wife to value a property in China.

2. For the purposes of the determining the quantum of costs payable:

(a) Within 28 days of the date of these Orders, the wife serve upon the first, second and fourth respondents an Itemised Costs Account for the costs claimed by the wife on an indemnity basis in accordance with Order 1, prepared in accordance with Rule 12.35 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“Rules”).

(b) Within 28 days of service of the wife’s Itemised Costs Account, the first, second and fourth respondents serve any Notice Disputing Itemised Costs Account upon the wife.

(c) If the parties are unable to resolve any dispute with respect to the wife’s Itemised Costs Account, within 42 days the parties file with the Court the Itemised Costs Account and any Notice Disputing Itemised Costs Account, and that the costs payable in accordance with Order 1 be assessed in accordance with Division 12.8.2 of the Rules.

3. I certify for the attendance of senior and junior counsel for the final hearing.

4. The wife’s Application in a Proceeding filed 29 October 2024 and the husband’s Response filed 4 November 2024 are otherwise dismissed.

5. The husband’s Application in a Proceeding filed 29 October 2024 and the wife’s Response filed 4 November 2024 are otherwise dismissed.

6. The second, third and fourth respondent’s Amended Application in a Proceeding filed 24 October 2024 and the wife’s Response filed 4 November 2024 are 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

The parties agreed that if a cost order was to be made then the form of the wife’s order 2.2 in Exhibit 1 was acceptable.BACKGROUND In view of the ambit of the respective cost’s applications, the determination as to costs needs to be viewed in the context of discrete findings I made in the reasons for judgment. That is so because as between the husband and wife, the husband conceded that a costs order was warranted. The ambit of dispute as between them was as to basis, percentage and whether in respect of the totality of the proceedings or in respect of certain parts. Astonishingly, despite findings made as to the second respondent’s conduct, he pursued an order for his and the fourth respondent’s costs. In my reasons, I record that I found the husband had breached undertakings given to a Chinese court at [83], had “attempted to transfer his shares in [KK Pty Ltd]… notwithstanding injunctive orders” at [83], and that “by a process of obfuscation and failure to comply with his obligations as to disclosure the husband has sought to obscure the true extent of his wealth” at [84]. In relation to the second respondent, I found him to be “perfidious” at [93] and that he gave false evidence in the Country AD proceedings at [94]. A central issue in the proceedings was whether a company registered in Country WW (“the company”) was the alter ego of the husband. I ultimately made a finding that it was. In doing so, I found the husband’s evidence “demonstrates his preparedness to lie and mislead” at [122], was satisfied that “the only logical and plausible explanation is that the husband caused the creation of [the company] putting in his brother as his mere puppet” at [137] and was satisfied that the husband and second respondent had not “given a frank explanation of the husband’s interest in [the company]…that the husband has failed in his obligation to fully and frank disclose the true extent of his wealth and in particular his interest in [the company]” at [147]. I did not find, contrary to the case prosecuted by the wife, that the assets of the second and third respondents were sourced from the company, or for that matter, that their property was impressed with a trust in favour of the husband at [149]. I was also not satisfied that the wife had established as against the second and third respondents that property at Suburb P was held on a resulting trust for the husband. Having determined that the pool of assets totalled at least $565,000,000, I made an adjustive order in favour of the wife as to $10,000,000. In relation to matters under s 75(2), the wife urged that the Court make an adjustment in her favour for a number of factors, including the husband’s non-disclosure. In relation to that submission, my reasons record as follows:285I do not know what the true extent of the husband’s wealth is. I accept that the husband’s non-disclosure is significant and egregious. To the extent to which the wife was put to significant cost in determining the pool is a matter more properly considered in the context of costs as opposed to s 75(2).286I am conscious of the authorities that the wife’s senior counsel has referred to in support of a s 75(2) adjustment. There is however a difference between a robust approach to findings and the factors going to a consideration of the matters under s 75(2). The notion that an adjustment under s 75(2) is warranted because of a failure to disclose must be principled, not reactive, and must also have regard to the ultimate findings at the contribution stage.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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