ZHU & LAI

[2015] FCCA 2885

FEDERAL CIRCUIT COURT OF AUSTRALIA

ZHU & LAI [2015] FCCA 2885

Catchwords:
FAMILY LAW – Property – Application for property settlement – conciliation conference – where conciliation conference vacated – where applicant failed to comply with directions – where applicant self-represented – where applicant claims inability to comply with directions.

COSTS – Order for costs – failure by party to prepare documents for conciliation conference – conduct of parties to the proceedings.

PRACTICE AND PROCEDURE – Conciliation Conference – directions for conference – specific directions to applicant and respondent – warning to parties about default – orders which may be made where a party is in default.

Legislation:

Family Law Act 1975 (Cth), ss. 79, 117

Federal Circuit Court Rules, rr.13.03A, 13.03B, 24.03, 24.04, Sch. 1, Part 1

Applicant: MR ZHU

Respondent: MS LAI

File Number: SYC 2768 of 2015

Judgment of: Judge Scarlett

Hearing date: 20 October 2015

Date of Last Submission: 20 October 2015

Delivered at: Sydney

Delivered on: 29 October 2015

REPRESENTATION

Applicant: In person

Counsel for the Respondent: Mr Norrie

Solicitors for the Respondent: Wang & Associates

ORDERS

1. The Applicant is to pay the Respondent’s costs of 20 October 2015 in the sum of $417.00.

2. The parties are to attend a Conciliation Conference with a Registrar.

3. No later than 21 days before the Conference the parties must make full and frank disclosure of their financial circumstances in accordance with Rule 24.03 by filing and serving an updated Financial Statement. 

4. No later than 21 days before the Conference the parties must comply with Rule 24.04 by serving on the other party the following documents:

   (a)copies of their 3 most recent taxation returns;

   (b)copies of their 3 most recent taxation assessments;

   (c)if either party has an Australian Business Number, copies of the last 4 business activity statements lodged; and

   (d)if there is a partnership, trust or company (except a public company) in which the party has an interest, copies of the 3 most recent financial statements and the last 4 business activity statements lodged by the partnership, trust or company.

5. No later than 14 days before the Conference, the Applicant must provide to the Respondent written market appraisals or valuations of the following properties:

   (a)(omitted) China; and

   (b)Property E, New South Wales.

6. No later than 14 days before the Conference, the Respondent must provide to the Applicant written market appraisals or valuations of the following properties:

   (a)(omitted) China;

   (b)Property E, New South Wales: and

   (c)The property at an undisclosed location near (omitted) held as a tenant in common with (omitted).

7. The Respondent is permitted to redact the address of the property referred to in Order (6)(c) above from the market appraisal or valuation.

8. No later than 14 days before the Conference the Applicant must file and serve an affidavit setting out his opinion of the percentage of the joint assets to which he believes he is entitled and the reasons why he considers that he is entitled to that percentage.

9. No later than 14 days before the Conference the lawyers for the Respondent must forward to the Registrar a Case Outline setting out:

   (a)the Respondent’s contention as to contribution based entitlements and the significant factors relied upon;

   (b)the Respondent’s contention as to any adjustment sought in accordance with s.75(2) of the Family Law Act 1975; and

   (c)a draft of the order sought to give effect to that entitlement.

10. No later than 14 days before the Conference the Respondent must provide to the Applicant a draft Balance Sheet setting out the asset pool contended for by the Respondent and the asserted values and forward a copy of the Balance Sheet to the Registrar.

11. No later than 7 days before the Conference the lawyers for the Respondent must give to the Applicant a written notice setting out:

    (a)The actual costs and disbursements incurred by the Respondent up to and including the Conference; and

    (b)The Respondent’s estimated future costs and disbursements up to and including the first day of the final hearing.

12. The Respondent must provide to the Registrar at the commencement of the Conference a copy of the written notice set out in the immediately preceding Order.

13. The Applicant and the Respondent must attend the Conference in person.

14. Each lawyer representing a party must attend the Conference.

15. The parties must make a genuine attempt to reach agreement on relevant matters in issue.

16. If:

    (a)a party fails to attend the Conciliation Conference;

    (b)a lawyer representing a party fails to attend the Conference;

    (c)a party fails to provide evidence of the value of any asset whose value is in dispute; or

    (d)a party otherwise fails to comply with any of these directions

    the Registrar is to terminate the Conference and list the matter before the Court for further directions within fourteen (14) days.   

IT IS NOTED that publication of this judgment under the pseudonym Zhu & Lai is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYC 2768 of 2015

MR ZHU

Applicant

And

MS LAI

Respondent

REASONS FOR JUDGMENT

Application

1. The substantive Application is an Application for property settlement. The parties were directed to attend a Conciliation Conference with a Registrar on 15^th September 2015 but the Registrar vacated the Conference on 10^th September because the parties failed to comply with the directions made by the Court

Background

1. The Applicant commenced proceedings for property settlement by filing an Application, an affidavit and a Financial Statement on 1^st May 2015. The Application was returnable on 11^th May, on which date the Respondent was ordered to file and serve a Response and a Financial Statement within 21 days. The Application was adjourned to 15^th June 2015 for mention.

2. The Respondent filed her material on 29^th May. She is legally represented.

3. On 15^th June 2015 the parties were ordered to attend a Conciliation Conference with a Registrar on 15^th September, and the usual directions were made for the preparation of the necessary documents for the Conference.

4. The Respondent’s lawyers have produced evidence by means of an affidavit of the Respondent’s solicitor affirmed on 19^th October 2015 showing that from 3^rd July onwards they have been in constant contact with the Applicant, by email and by letter, seeking that he provides a draft Joint Balance Sheet setting out the asset pool contended and the values that he asserts. He has not done so.

5. As the necessary documents have not been forwarded to the Registrar, she vacated the conference date on 10^th September, five days before the scheduled date.

Submissions

1. The Applicant attended Court in person. The Respondent was represented by counsel. The Applicant told the Court that he did not understand what he had to do. He said it would take some time for him to get evidence from China. He also said that he did not know what a joint balance sheet is.

2. Rather optimistically, the Applicant also asked the Court for the early release of funds from the sale of the parties’ house.

3. The Respondent wishes the matter to proceed and has advised the Applicant by her solicitor’s letter of 31^st July 2015 that she will seek an order for costs.

Consideration

1. From his affidavit of 30^th April 2015, it is clear that the Applicant is an intelligent and well educated man. He speaks English moderately well, although English is not his first language, as he and the Respondent are originally from China. He deposed in his affidavit that he receives a Newstart allowance of about $600.00 per fortnight.

2. The Applicant and the Respondent came to Australia in (omitted) 2002. The Applicant obtained the (qualifications omitted) from the (school omitted) in 2005.

3. The Applicant and the Respondent have both worked since their arrival in Australia and in 2008 the Respondent started a business called (business omitted). The Respondent worked in the business with another person.

4. The Respondent purchased a home unit in a Sydney suburb in April 2010. She has since sought to sell the property but settlement has not taken place because of a caveat placed on the title by the Applicant.

5. The parties also own a house in (omitted), in China.

Consideration

1. It is the Applicant who has commenced these proceedings and he has the carriage of the matter. He has not done anything to get this matter ready for a Conciliation Conference.

2. From the affidavit of the Respondent’s solicitor, Xiao Ming Wu, affirmed on 19^th October 2015, it is clear that the Applicant has in fact asked the Respondent’s solicitor to prepare the necessary documents. An email dated 12^th July 2015 from the Applicant to the Respondent’s solicitor states:

   Thank you for the letter dated 03/07/2015, which requires me to provide a draft balance sheet within 7 days from the date of this letter.

   Could you please make the draft balance sheet as you are a legal professional while I am not, and let me check it.

   Your cooperation is highly appreciated.[1]

   [1] Affidavit of X.M. Wu 19.10.2015 Annexure “A”

3. Not surprisingly, the Respondent’s solicitors did not agree with this request. Their email of 13^th July 2015 says:

   In response to your email below, we are not in the position to provide you with any legal advice nor perform any work for you.

   It is your responsibility to prepare the draft financial statement with the asset pool and their values contended by you. Should you require any work to be done for you, we suggest you seek independent legal advice.

   We note the court orders remain binding, and any further delays on your side will amount to contempt of court.[2]

   [2] Affidavit of X.M. Wu 19.10.2015 Annexure “A”

4. In their letter to the Applicant of 31^st July 2015, the Respondent’s solicitors stated:

   It is your responsibility to prepare documents on your behalf, notwithstanding the fact that you are self-represented. If you are unable to prepare such documents, then we strongly suggest that you seek legal advice and legal representation.[3]

   [3] Ibid

5. The Respondent’s solicitors are correct in their statement to the Applicant that they cannot prepare legal documents for him. They can only prepare documents for their own client in furtherance of her case. Clearly, they have been frustrated by the failure of the Applicant to supply any documents, which has hampered their preparation for the conference.

Costs

1. The Respondent’s solicitors have already placed the Applicant on notice of the question of an order for costs, and it appears that there is some considerable justification for a costs order. Costs in family law proceedings are governed by the provisions of s.117 of the Family Law Act 1975 (Cth).

2. Whilst subsection 117(1) speaks of each party to proceedings bearing his or her own costs, subsection 117(2) empowers the Court to make such order for costs as the Court considers just if in the opinion of the Court there are circumstances that justify it in doing so.

3. The Court must have regard to the following matters set out in subsection 117(2A):

   (a)the financial circumstances of each of  the parties tom the proceedings;

   (b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;

   (c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;

   (d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;

   (e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;

   (f)whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and

   (g)     such other matters as the court considers relevant.

4. The financial circumstances of the parties are set out in their affidavits and Financial Statements. Neither party is in receipt of assistance by way of legal aid.

5. The conduct of the Applicant in relation to the proceedings is relevant,  as he has failed to comply with the directions of the Court to file the draft balance sheet and any document setting out the values of assets that he contends. This has meant that the mention before the Court on 20^th October, which should have taken place at a time when the parties had attended a Conciliation Conference, has been a waste of the Court’s time. This does not appear to be in any way due to any failing by the Respondent.

6. What has happened, however, is that costs have been “thrown away” on the part of the Respondent. The case is no further advanced than it was on 15^th June, when the parties were directed to attend a Conciliation Conference.

7. In my view, this is a clear case for an order for costs of the day. The Applicant is to pay the Respondent’s costs of 20^th October 2015, fixed in the sum of $417.00, which includes the advocacy loading, as set out in Items 12 and 13 of Part 1 of Schedule 1 to the Rules.

Directions for the Future Progress of the Application

1. The Application for settlement of property must proceed to a Conciliation Conference. It cannot languish in the list due to the failure by the Applicant to prosecute his case. If he cannot comply with the directions, he should consider obtaining legal representation. He cannot ask the Respondent’s solicitors to do the work for him. He will be given specific directions to prepare his case for the Conciliation Conference, which he, as an educated man, should be able to follow.

2. The Respondent has been hampered in her preparation for the Conference due to the Applicant’s failure to file the necessary documents. The Respondent is unlikely to have any confidence that the Applicant will comply with directions after his failure up to now. However, the Respondent needs to have the opportunity to put material before the Court about her case, irrespective of the actions or inactions of the Applicant. She, too, will be given specific directions to prepare material for the Conciliation Conference.

3. A further date for a Conciliation Conference will be set, which will allow the parties sufficient time to provide the necessary information about the assets, their estimated values and their contentions about the share each party contends will be a just and equitable distribution.

4. The Applicant should be aware that the Rules of this Court make specific provisions for cases where a party is found to be in default. Rule 13.03A provides that an applicant is in default if the applicant fails to:

   (a)     comply with an order of the Court in the proceeding; or

   (b)     file and serve a document required under these Rules; or

   (c) produce a document as required by Part 14; or

   (d)     do any act required to be done by these Rules; or

   (e)     prosecute the proceeding with due diligence.

5. Rule 13.03B provides that if an applicant is in default, the Court may order that:

   (a)the proceeding be stayed or dismissed as to the whole or any part of the relief claimed by the applicant; or

   (b)a step in the proceeding be taken within the time limited in the order; or

   (c)if the applicant does not take a step in the time mentioned in paragraph (b) – the proceeding be stayed or dismissed, as to the whole or any part of the relief claimed by the applicant.

6. Put simply, if the Applicant in this case fails to comply with the directions made by this Court for the preparation of the necessary documents to allow a Conciliation Conference to proceed, he faces the prospect of having his Application stayed or even dismissed.

I certify that the preceding thirty-two (32) paragraphs are a true copy of the reasons for judgment of Judge Scarlett

Associate: 

Date: 29 October 2015