Ruling on Costs Application

FEDERAL CIRCUIT COURT

OF AUSTRALIA

AT DANDENONG

 

DGC 731 of 2019

 

MS HANSI

Applicant

 

And

 

MR HANSI

Respondent

 

REASONS FOR JUDGMENT

 

1. On 5 August 2020, I published reasons for judgment and orders to give effect to those reasons for judgment in this matter.  Put shortly, the wife was entirely successful.  I made orders in effect transferring the husband’s interest in the former matrimonial home to the wife, this being the only substantive asset that the parties had.  The wife also retained her superannuation, effectively $36,000, which has now transmogrified into $36,000 in her bank account. 
2. The wife had foreshadowed an application for costs and I made orders for written submissions.  The wife filed her submissions on 11 August 2020, but the husband has not filed any responding submissions by the posited date of 19 August 2020.  Because Mr Hansi is self-represented, I caused my associate to email him reminding him of his opportunity to respond, but he has not elected to do so.  His response to the associate’s reminder was simply “My financial councillor shall be in contact with the applicants lawyer shortly”.
3. As already indicated, the judgment was effectively 100 per cent in favour of the wife.  There are perhaps two matters that should be noted, however.  The first concerns how much money the husband might or might not have in Country T. At paragraph 93, I said relevantly:

I repeat that I am not able to say whether the husband still has substantial amounts of funds in Country T.He may or he may not.Nonetheless, whatever funds there were, and there were certainly well in excess of $300,000, they have all been retained by him and either retained in Country T sub rosa or spent by the husband for his own benefit.

4. It was against that background that I came to the conclusion that it was just and equitable that the wife retain the entirety of the equity in the matrimonial home, which happened to be marginally in excess of $300,000, in any event. 
5. The wife’s written submissions point to a number of matters.  It is, however, convenient to approach this matter by direct reference to section 117 of the Family Law Act 1975 (Cth).  Pursuant to section 117(2), it is provided that:

If, in proceedings under this Act, the court is of the opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A) (5) and (6) and the applicable rules of court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.

6. It is fair to say that the general rule is that each party bears their own costs, but subject, obviously, to cases where the court is persuaded that there are circumstances justifying the making of an order for costs (see Penfold & Penfold [1980] 144 CLR 311 at 315). 
7. Turning to section 117(2A), the financial circumstances of both of the parties are in truth strained.  Both parties are on the aged pension.  The wife lives in the matrimonial home, but has to pay the mortgage.  The husband, when the matter was before the court, was living with his son.  As noted above, I was not able to say with any certainty whether the husband retained funds in Country T or not.  If he does, he has hidden them far too well for the wife to find them, and if he does not, of course, then he has no means with which to satisfy the cost orders made against him.
8. Neither party is in receipt of legal aid (Section 117(2A)(b)).
9. There is no doubt that the husband’s conduct of this proceeding (and he was legally represented for substantial proportions of it) has been lamentable.  As I said in my earlier judgment at 5, the husband’s approach to disclosure was dilatory at best (Section 117(2A)(c)). 
10. The husband also failed to comply with disclosure orders on three occasions, although, of course, this is merely part of his conduct of the proceeding more generally (Section 117(2A)(d).
11. The husband was wholly unsuccessful in the case (Section 117(2A)(e)).
12. The wife has referred in her costs submissions to an offer to settle the matter as constituted in letters dated 28 November 2019 and 27 February 2020.  The former is not appended to the written submissions, but the latter is.  It is said in the written submissions:

Those letters contained an offer to settle the matter with transfer to the applicant of the former matrimonial home and mortgage along with a cash amount, that was open to negotiation.

13. The letter dated 14 February 2019 to the respondent’s then solicitors does not in fact assert the offer in the terms described.  Rather, it is entirely related to the alleged failure on the part of the husband to comply with his disclosure obligations. 
14. Assuming in the wife’s favour that the letter of 28 November 2019 did indeed make an offer to settle by the transfer of the matrimonial home and mortgage along with a cash amount “that was open to negotiation”, there are a number of things to be said. 
15. First, by 29 October 2019, the husband’s solicitors had withdrawn, and he was self-represented.  Although he speaks English reasonably well, the husband required an interpreter at trial, and I would infer that his knowledge of the law would be minimal.  Nothing has been said as to how long the alleged offer was said to be open.  Indeed, furthermore, as far as the written submissions of the wife identify the offer, it did not involve a direct cash proposal.
16. In these circumstances, the court is required to consider whether the conduct of the offeree was imprudent, as things would have been reasonably understood by the offeree at the time the offer was made.  At the time the offer was made, the husband was still running his case on the footing that he was telling the truth.  He would have reasonably anticipated that his case was not hopeless.  Indeed, the outcome that ultimately obtained was one that was extremely unusual and totally dependent on the facts of the case as I ultimately found them to be. 
17. Given the rather nebulous terms of the offer, if there was indeed one, I do not think that the failure to accept the offer was unreasonable in these circumstances. 
18. This brings us to subsection 117(2A)(g), which concerns “such other matters as the court considers relevant”. 
19. The wife has sought her reserved costs, which, from the file, appear to me to be the costs reserved on 25 October 2019 in the sum of $2,582.  The reservation of costs took place because it was not then ascertained conclusively whether or not the adjournment, because of the husband’s non-disclosure, was indeed established. 
20. In the light of the findings I have made at trial as to the husband’s dilatory approach to disclosure, at best, it is clear that the adjournment on that date was indeed caused by the husband’s conduct.  I think that the wife should have her costs of $2,582.  That will, as her written submissions assert, enable her to access funds of approximately $2,100 held in a joint mortgage offset account. 
21. The question then becomes what the court should really otherwise do in these circumstances.  It is the case that the wife has now a substantial set of legal fees to pay.  These have been caused by the conduct of the husband, who has failed completely in the case.  Nonetheless, the end result of the proceedings is that the wife has 100% of the only identifiable assets that the parties possess.  In circumstances where I simply cannot be satisfied, albeit as a result of his own conduct, that the husband has any money with which to meet a set of costs, it is in my view inappropriate to exercise the discretion to grant costs. 
22. The husband is living on the pension.  As I have already indicated, if he has any money, it has been too well hidden for the wife to find it.  There is no suggestion he has any significant amount in bank accounts in Australia.  Indeed, I strongly suspect that any endeavour by the wife to enforce any costs orders, save, to the extent of the moneys in the joint offset account, to which I have referred, will cost her far more than she would ever be likely to realise.  In the end, I think that the proper exercise of my discretion, given the effective impecuniosity of the husband, is not to make any order for costs, save those previously reserved. 
23. There will be orders accordingly.

 

I certify that the preceding twenty-three (23) paragraphs are a true copy of the reasons for judgment of Judge Burchardt

 

Associate: 

 

Date: 10 September 2020

Posted in: Derek Legal Blog at 21 October 20