Zhou and Wei (No. 2)

[2018] FamCA 859

FAMILY COURT OF AUSTRALIA

ZHOU & WEI (NO. 2) [2018] FamCA 859

FAMILY LAW – COSTS – where the wife seeks an order for costs on an indemnity basis and in the alternative, a party–party basis and the Court finds that there are no unusual circumstances to justify departure from the principal in s 117(1) of the Family Law Act 1975 (Cth) on the basis that the matter was ultimately determined on the balance of convenience.

Family Law Act 1975 (Cth)
Family Law Rules (2004) (Cth)

Harris and Dewell and Anor (No. 2) [2018] FamCAFC 180
Henry v Henry [1996] HCA 51
NMFM Property Pty Ltd v Citibank Ltd (No 2) (2001) 109 FCR 77
Prantage & Prantage [2013] FamCAFC 105

APPLICANT: Ms Zhou

RESPONDENT: Mr Wei

FILE NUMBER: MLC 140 of 2018

DATE DELIVERED: 25 October 2018

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: By way of written Submissions

SUBMISSIONS RECEIVED FROM

SOLICITOR FOR THE APPLICANT: Tao Jiang Lawyers

SOLICITOR FOR THE RESPONDENT: Thelma Palbas & Associates

Orders

1. That the wife’s application for costs arising out of the Orders made on 11 September 2018 as contained in her written submission filed on 8 October 2018 is dismissed. 

2. That to the extent that the husband’s written submission in response filed 22 October 2018 is an application as well, it too is dismissed. 

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

IT IS NOTED that publication of this judgment by this Court under the pseudonym Zhou & Wei (No. 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 140 of 2018

Ms Zhou

Applicant

And

Mr Wei

Respondent

REASONS FOR JUDGMENT

1. On 11 September 2018, the Court ordered that Mr Wei (“the husband”) be restrained by injunction from continuing proceedings issued in China in respect of property of the parties contained in that country. It was further ordered that all proceedings as between the husband and Ms Zhou (“the wife”) be litigated in this court. Provision was then made for the parties to make any application for costs that they considered appropriate by written submission.

2. By her written submission filed 8 October 2018, the wife seeks an order for her costs on “an indemnity basis” and/or in the alternative, on a “party–party” basis.

3. The husband filed a response to the wife’s submission on 22 October 2018 which runs to 43 paragraphs and in which I have presumed, he is seeking that the wife’s application be dismissed.

4. Neither party addressed the starting point which is the provision in s 117 of the Family Law Act 1975 (Cth) (‘the Act”). In simple form, s 117 of the Act provides that in proceedings under the Act, each party shall bear their own legal costs unless there are circumstances to justify a departure from that principle. If such circumstances arise, before making any order for costs, the Court must contemplate the matters set out in s 117 (2A) of the Act.

5. The wife contends that the husband was unable to advance an explanation for his reasoning in resisting the wife’s application for an anti-suit injunction. In reality, what the husband was endeavouring to do was bifurcate the wife’s proceedings such that any property in China would be the subject of litigation in that country whilst any other property in Australia be dealt with by this Court.

6. The wife’s submission was that this approach by the husband caused her to expend money on legal costs that she ought not to have had to spend had the husband not commence proceedings in China.

7. It was common ground that the parties had made their lives in Australia and had families here and there was no dispute that the Court had jurisdiction to deal with all issues.

8. In respect of a justification to depart from the principal in s 117 of the Act, the wife’s lawyers submitted that the proceedings of the husband were “entirely un-meritorious” as proceedings had to otherwise be heard in Australia in respect of other matters. She submitted that the husband had had an opportunity to withdraw the Chinese proceedings but had refused to do so requiring the wife to pursue the anti-suit injunction.

9. The submission for the husband also drawn by his solicitor was to the effect that from the time that the proceedings were begun in January 2018, the pleadings were either incomplete or did not comply with the various requirements of the Court.  Much of what the submission contained amounted to assertions of fact which were not put before the Court in respect of the anti-suit injunction proceedings and in my view therefore cannot be a basis now to seek findings from the Court.

10. Doing the best I can with this long submission, the husband complains that he incurred costs in China and did not have the financial resources to fund the costs sought by the wife.

11. Various hearing dates were allocated prior to the date upon which the matter was argued more comprehensively before me. Having regard to the nature of the application and the way it was being argued, I would not be prepared to consider any costs implications arising out of those dates. For example, there was one hearing before Macmillan J on 4 July 2018, in which her Honour ordered that there be some expert evidence provided.  In respect of another day which was when the matter was transferred to me, there was not sufficient time to conclude the hearing in one attempt having regard to the way in which each of the parties desired their arguments to be heard in a busy duty list.

12. An examination of the reasons delivered on 11 September 2018 will show that I considered the nonexhaustive list of matters considered by the High Court in Henry v Henry [1996] HCA 51 and after consideration of those eight issues, the balance of convenience favoured the wife.

13. In the circumstances, it was open to the husband to argue as he did but on balance, he was unsuccessful. 

14. As was said in Harris and Dewell and Anor (No. 2) [2018] FamCAFC 180, in proceedings under the Act, an overriding “usual rule” is prescribed by s 117(1) of the Act, namely that each party pays their own costs. If that is the “usual rule”, to depart from it, there must be something unusual about the action taken. Here, the husband was unsuccessful based on a balancing of all the relevant considerations. To that extent, he was wholly unsuccessful but that does not mean that his case was entirely without merit.

15. In my view, there is no basis here to depart from the principal in s 117(1) of the Act.

16. To the extent that it also needs to be said, an application for indemnity costs that is, pursuit of an order that one litigant pay all the costs of the other must be seen as rare (see NMFM Property Pty Ltd v Citibank Ltd (No 2) (2001) 109 FCR 77 as referred to in Prantage & Prantage [2013] FamCAFC 105). Even as a starting point, the rules of the Court require that any such application be justified by material including a copy of any costs agreement. No such document was provided to the Court here.

17. In my view, this is a case which does not justify an order for costs and the wife’s application is dismissed. 

I certify that the preceding seventeen (17) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 25 October 2018.

Acting Associate:

Date:  25 October 2018