FAMILY LAW – NATIONAL ARBITRATION LIST – husband’s application for indemnity costs against the wife, her former solicitors and her former barrister.
FAMILY LAW – PRACTICE & PROCEDURE – wife pressing for the determination of a constructive trust claim – wife having leave to attempt to substantiate that claim under Country E law – several attempts made by the wife to obtain expert evidence of Country E law in an admissible form to prove her constructive trust claim – wife unable to make good her claim.
COSTS – husband seeking indemnity costs from the wife and also from the wife’s former legal representatives – husband’s claims for indemnity costs dismissed – costs thrown away ordered against wife but on a party/party basis – husband’s costs application on an indemnity basis refused.
FAMILY LAW – COSTS – wife’s former solicitors and wife’s former counsel seeking a costs order against husband for his failed attempt to obtain indemnity costs against them – husband ordered to pay indemnity costs against the wife’s former solicitors and of the wife’s former counsel on the basis that the husband’s costs applications against them were doomed from the start and ought never to have been brought.
FAMILY LAW – LEGAL PRACTITIONERS – husband’s counsel making an unsupportable assertion against other counsel – such conduct to be condemned.
Legislation:
Family Law Act 1975 ss 13J, 13K, 79, 117(1) , 117(2) and 117(2A)
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Zheng & Cheung [2022] FedCFamC1F 249
Case
[2022] FedCFamC1F 249
Decision Date
CaseChat Overview and Summary
In the case of Zheng & Cheung, the Federal Circuit and Family Court of Australia was tasked with resolving a dispute between the husband, Mr Cheung, and the wife, Ms Zheng. The primary issue involved the husband's application for indemnity costs against the wife, her former solicitors, and her former barrister. The wife had attempted to substantiate a constructive trust claim under the law of Country E, but ultimately failed to do so. The husband sought indemnity costs from the wife and her former legal representatives, while the wife's former solicitors and counsel sought costs against the husband for his unsuccessful attempts to obtain indemnity costs against them. Additionally, the court had to consider the appropriate conduct of counsel and the implications of offers of compromise on costs orders.
The court found that the husband was not entitled to indemnity costs from the wife or her former legal representatives, but was entitled to his party/party costs thrown away due to the wife's abandoned constructive trust argument. The husband's application for indemnity costs against Ms G, Ms H, and Mr Taubman was dismissed. Conversely, the wife's former solicitors and counsel were awarded indemnity costs against the husband due to the futility of his attempts to obtain indemnity costs against them. The court also condemned the husband's counsel for making an unsupportable assertion against other counsel.
The court ordered that the wife pay the husband's party/party costs thrown away, while the husband must pay the wife's costs of the proceeding, including the costs of the arbitration, assessed on an indemnity basis. The husband was also required to pay the costs of Ms G, Ms H, and Mr Taubman on an indemnity basis. A registrar of the court was tasked with assessing these costs by specific dates. The further hearing of the proceeding was adjourned to a later date, and the form of the order was subject to potential review or variation.
This decision highlights the importance of the proper conduct of legal proceedings and the consequences of unreasonable rejections of offers of compromise. The court's ruling underscores the need for careful consideration of indemnity costs applications and the potential for costs to be awarded on an indemnity basis in certain circumstances. The outcome also emphasises the court's role in ensuring that legal practitioners conduct themselves appropriately and that costs are fairly apportioned between parties.
Orders
Orders of the court
PAC 2307 of 2019
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:
MS ZHENG
Applicant
AND:
MR CHEUNG
First Respondent
MR TAUBMAN
Interested Person
ORDER MADE BY:
WILSON J
DATE OF ORDER:
11 MAY 2022
THE COURT ORDERS THAT
1. The wife must pay the husband’s costs thrown away of and incidental to the wife’s abandoned constructive trust argument, such costs to be assessed on a party/party basis.
2. The husband must pay the wife’s costs of the proceeding, including the costs of the arbitration assessed on an indemnity basis.
3. A registrar of this Court must assess the party/party costs ordered pursuant to paragraph 1 hereof by 29 July 2022, unless otherwise ordered by me, and the registrar must inform me of such assessment by noon on 30 July 2022.
4. A registrar of this Court must assess the indemnity costs ordered pursuant to paragraph 2 hereof by 29 July 2022, unless otherwise ordered by me, and the registrar must inform me of such assessment by noon on 30 July 2022.
5. I adjourn the further hearing of this proceeding to 5 August 2022 at 10:00am.
6. I dismiss the husband’s applications for costs against Ms G and Ms H.
7. I dismiss the husband’s applications for costs against Mr Taubman.
8. The husband must pay Ms H’s, Ms G’s and Mr Taubman’s costs of and incidental to this application on an indemnity basis, such assessment to be undertaken by a registrar of this Court in like manner as has been ordered in paragraph 3 and 4 hereof.
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.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Under no circumstances is it appropriate or jurisdictionally sound for me to make a costs order against Mr Taubman. He is blameless in this application. He is to be commended on his fearless conduct as counsel. CONCLUSIONS ON THE HUSBAND’S COSTS ORDER APPLICATIONS It is possible to state in prècis form the upshot of my reasons appearing aforesaid on the husband’s applications for costs against the several parties from whom he has sought costs orders. They are as follows – (a)the husband is entitled to his party/party costs thrown away, of and incidental to the wife’s abandoned constructive trust argument, such costs to be assessed by a registrar of this court with such assessment being concluded by 29 July 2022 absent any order by me extending that date; (b)I dismiss the husband’s application for costs against Ms G and Ms H; and (c)I dismiss the husband’s application for costs against Mr Taubman. THE WIFE’S COSTS APPLICATION AGAINST THE HUSBAND In her response filed 12 October 2021 the wife set out her six applications that responded to the husband’s costs applications. The wife’s applications were as follows –(a)that the application in a proceeding for costs filed by the husband be dismissed; (b)that any other application filed by the husband in relation to a stay of the arbitration award be dismissed; (c)that pursuant to s 117(2A)(2)(f) of the Family Law Act 1975 the husband is to pay to the wife costs as calculated by a registrar after a cost assessment and such cost assessment is to occur not later than 29 November 2021;(d)that the costs payable by the husband be in respect to the wife’s costs of the arbitration and the concurrent proceeding in the Federal Circuit and Family Court of Australia from the date of the wife’s reasonable offer of settlement dated 4 February 2020; (e)that in addition to the costs assessment listed in subparagraph (d) above, the husband also pay the wife’s costs of this costs application; and(f)following the assessment by the registrar of costs payable, the husband is to make payment to the wife within 28 days. The wife made an affidavit on 11 October 2021. In it she deposed to offers of settlement. She contended that the husband unreasonably rejected those settlement proposals for which he should be ordered to pay the wife’s costs from the date of her reasonable offer. Independently, the wife contended that the husband’s conduct, through his solicitor, Mr Pinto, and his counsel, Ms Clarke, ought to be taken into account in any assessment of costs.OFFERS OF COMPROMISE It is well accepted that a party who unreasonably rejects an offer of compromise thereby prolonging the litigation is amenable to a costs order and that it is appropriate to impose those costs on an indemnity basis. In Agosti & Agosti[29] I examined the learning on point. I adhere to my observations there expressed.[29] [2021] FedCFamC1F 72. The chronological evolution of offers and counteroffers was set out by the wife from paragraph 6 of her affidavit. The proceeding did not settle at a conciliation conference conducted on 16 January 2020.