Adams and Adams ( No. 7)

[2007] FamCA 293

FAMILY COURT OF AUSTRALIA

ADAMS & ADAMS (NO. 7) [2007] FamCA 293

FAMILY LAW - PRACTICE AND PROCEDURE - ORDERS - Oral application made part way through trial by mother and independent children’s lawyer to enjoin the father from dealing with $40,000 or $65,000 invested funds in anticipation of each successfully making a costs application against the father for $20,000 – consideration of whether proper to make order included in this case consideration of some matters usually raised in application for security for costs – $40,000 frozen as an interim measure – father given opportunity to make written submissions for discharge of order at his convenience

Family Law Act 1975

An & Zhu (2006) FLC 93‑257

APPLICANT: Mrs Adams

RESPONDENT: Mr Adams

INDEPENDENT CHILDREN’S LAWYER: Donald S Lampe

FILE NUMBER: MLF 2456 of 2006

DATE DELIVERED: 20 February 2007

PLACE DELIVERED: Melbourne

JUDGMENT OF: Bennett J

HEARING DATE: 20 February 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr A.B.J. Combes

SOLICITOR FOR THE APPLICANT: Jane Baldwin Solicitors

THE RESPONDENT: In Person

INDEPENDENT CHILDREN’S LAWYER COUNSEL: Mr R.N. Hoult

INDEPENDENT CHILDREN’S LAWYER SOLICITOR: Donald S Lampe

Orders

1. That the independent children’s lawyer and the wife have leave to make oral application for security of costs or injunctive relief or both.

2. That the operation of Orders previously made by me restricting the husband right to be heard in these proceedings be and is hereby suspended for the purpose of him being heard in opposition to the oral application of the independent children’s lawyer.

3. That until further order the husband by himself, his servants and / or agents be and is hereby restrained from withdrawing, dealing with or disposing of the sum of $40,000 monies invested in his name or the name of the child V born in July 2003 with Commonwealth Australia Bank, which in his evidence he has referred to as being in the approximate sum of $65,000 and which may be account number … .

4. I DIRECT that the independent children’s lawyer forthwith arrange for service of a copy of this Order on the proper officer of the Commonwealth Australia Bank of Australia.

5. That I reserve liberty to apply generally.

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLF 2456 of 2006

Ms Adams

Applicant

And

Mr Adams

Respondent

REASONS FOR JUDGMENT

(EX TEMPORE)

1. In this matter Mr Hoult, counsel for the independent children's lawyer, has this morning made an application for leave to make an oral application to enjoin $20,000 of moneys which are invested in the name of the husband with Commonwealth Bank of Australia.  He says that he does in a way similar to seeking security for costs.  Mr Hoult submits that he is instructed to make an application for costs at the conclusion of this hearing and, in anticipation of his client being successful with that application, his client seeks the amount of $20,000 to be preserved so that it may be applied in satisfaction of the costs order. 

2. It is perfectly clear that the independent children’s lawyer is not asking me to make a costs order now and nor is he asking me to say how any costs order may be enforced in the future.  The independent children’s lawyer merely wants to keep his client's options open. 

3. Mr Combes for the wife makes an application in precisely the same terms and for the purpose of this particular application and these reasons for judgment the submissions made on behalf of the independent children's lawyer are adopted and repeated on behalf of the wife. 

4. Turning to the subject matter of the application, the money. 

5. The husband in oral evidence before me confirmed that there was an amount of $65,000 invested with Commonwealth Bank of Australia Ltd.  He was unable to give the account number.  However, a perusal of court documents, which includes his further amended application in a case filed in this court on 27 October 2006 refers to the invested funds as follows:

   INVESTMENT TRUST ACCOUNT ‑ ‑ ‑

   [V’s] paternal grandmother has donated $65,000 in [V’s] bank account.  That $65,000 is for [V’s] future, held in his Commonwealth Bank account and entrusted to me, [V’s] father here in [W] - Melbourne, Victoria.  This financial assurance is for [V’s] wellbeing and is accessible whenever needed.  Evidence is marked "P2". 

6. I note that there is an annexure which on the bottom right hand corner is marked "P2", it is a new account notification for account identification number …, opened by [Mr A] of W.  The account title is [V].  The customer details are [V]. 

7. The husband in his evidence said that the moneys were sent to him by his parents for the purpose of funding his - that is, the husband’s - legal expenses in Australia.  Once he received the money he took the view that it was no use paying the kind of lawyers who were available in Australia to assist him in his case and he decided to give it to V. 

8. I am not determining now who owns the funds or the person for whose benefit the funds are held. 

9. The application for an injunction is made under s.114 of the Family Law Act 1975 (“the Act”).  I take that to be in aid of a future and anticipated application under s.117(2A) of that Act for costs. 

10. I must be satisfied in making the injunction that it is proper for me to do so.  Proper, in the terms of this case, is a fairly wide concept; I balance the conveniences and the inconveniences, I look at the justice and the injustice of the matter. 

11. I have been attracted to some of the tests or issues which must be considered when making a determination of an application for security for costs, and to that end I referred Mr Hoult and also the husband to the tests which appear in the decision of An & Zhu (2006) FLC 93‑257 at paragraph 108. These include a consideration of the financial circumstances of each of the parties, and in particular if I made orders for the husband to pay costs of or exceeding $40,000 how he says he would satisfy that order. For ease of reference and because I asked counsel and the husband to address me on some points identified in that case as relevant to security for costs, I set out that paragraph:-

    The principles to be applied in such application [for security for costs] are conveniently set out in Luakdaka and Luakdaka (1998) FLC 92-830.  Those principles are as follows:

    “62. The purpose of an order for security is to secure justice between the parties by ensuring that an unsuccessful party does not occasion injustice to the other. In considering whether or not to make an order, apart from those referred to in s.117(2A), matters which may be relevant include the following:

    62.1 It may be relevant to take into account the means of an applicant to satisfy an order for costs if he or she is unsuccessful. Ordinarily the means of the applicant is not alone sufficient to justify an order for costs because of the rule that poverty should be no bar to justice. This is reinforced by s.117 (1). However, the financial circumstances of the applicant do not prevent an order being made if there are other grounds which justify an order. Financial weakness may be relevant, for example, if the applicant is a company. In relation to the means of the respondent, who is the applicant for security, it was held by Goldstein J in Alexander and Alexander (supra) and Gee J in B and B (supra) that the question is whether or not the respondent is able to pay his or her costs. Section 117(2A)(a) requires consideration of the financial circumstances of both parties. However, we do not accept that it will only be in cases where the applicant for security does not have the means to meet his or her costs that an order would be made. In appropriate circumstances an order may be made even if the applicant for security has the means to pay his or her costs.

    62.2 The prospects of success is a relevant matter to take into consideration: Parkinson & Co Ltd v Triplan Pty Ltd (supra). However, ordinarily the court will not undertake a detailed assessment of the likelihood of the applicant’s success unless it can be demonstrated that there is a high probability of success or failure: Porzelack KG v Porzelack (UK) Ltd [1987] 1 WLR 420; Appleglen Pty Ltd v Mainzeal Corporation Pty Ltd (1988) 79 ALR 634; Equity Access Ltd v Westpac Banking Corporation (1989) ATPR ¶40-972. This is because of the lack of material at the time the application is dealt with. However, such an assessment may be possible in circumstances where, as in this case, affidavits have been filed in which the case sought to be made out is set out.

    62.3 It is a relevant consideration whether the applicant’s claim is made bona fide, whether it is genuine and not trivial, vexatious or a sham: Parkinson & Co Ltd v Triplan Pty Ltd (supra); Lynnebry Pty Ltd v Farquhar Enterprises Pty Ltd (1977) 3 ACLR 133; J & M O’Brien Enterprises Pty Ltd v Shell Company of Australia Ltd (1983) 7 ACLR 790.

    62.4 It may be relevant to consider whether or not an order for costs would be oppressive or stifle the litigation. In Mantaray Pty Ltd v Brookfield Breeding Co Pty Ltd (1990) 8 ACLC 304 Byrne J said at 306:

    ‘A factor in deciding whether security should be required is that the order may well mean that the action cannot proceed. That prospect does not require refusal of the application but it is often a significant matter.’

    See also Rosenfield Nominees Pty Ltd v Bain & Co (1988) 14 ACLR 467 and Sydmar Pty Ltd v Statewise Developments Pty Ltd (1987) 5 ACLC 480.

    62.5 It may be relevant to consider whether or not the litigation may involve a matter of public importance: Equity Access Ltd v Westpac Banking Corporation (supra); Jodast Pty Ltd v A & J Blattner Pty Ltd (1991) 104 ALR 248. In Quick on Costs at [4.9440] it is said that this will militate against the making of an order.

    62.6 It may be relevant to consider whether or not there has been delay in bringing the application. An application may be refused if there is delay in making the application and prejudice is caused to the respondent to the application: Buckley v Bennell Design & Constructions Pty Ltd (1974) 1 ACLR 301 and Loreva Pty Ltd v Cefa Associated Agencies Pty Ltd (1982) 7 ACLR 164.

    62.7 Other relevant matters may include any difficulties of enforcing an order for costs and the amount of costs to be incurred.”

12. Getting back to the husband, he did not advance or provide any information as to how he could pay costs in the sum of $40,000.  He did make it clear, however, that he regards the money as having been given by his parents for V.  That does not sit comfortably with his viva voce evidence, in particular, that it was given to fund these proceedings. 

13. I asked Mr Hoult and the husband to address me on the prospects of success on the application for costs.  Mr Hoult points to three days in which he will submit have been largely wasted by the husband’s behaviour; they are 6, 15 and 16 February 2007.  He does not in any way confine himself to those days.  He does not confine his costs application to a consideration only of wasted time; he was merely pinpointing one element of a broad outline of his entitlement to costs and the fact that it was not a claim that could be said to be without any prospect of success. 

14. I asked the husband to address me on this point, but he referred mainly to the fact that he has not been responsible for delays and wasted time.  Instead he says that the waste of time is the fault of the court and of Mr Hoult and, he adds, that Mr Hoult has lied to the court. 

15. I asked for submissions in relation to whether the independent children’s lawyer's claim and that of the wife should be considered to be made bona fide and genuinely.  I asked the husband to say if he thinks that it is trivial or vexatious or a sham and, if so, why.  The husband does not accept any part of Mr Hoult's case in relation to costs, he does not even accept that Mr Hoult is instructed to make the application.  The husband sought verification from Victoria Legal Aid that Victoria Legal Aid had instructed the independent children's lawyer to make the application.  I do not permit him to call for that evidence nor do I require it of Mr Hoult now.  The husband did not make any other submissions. 

16. I asked the husband to tell me whether or not making the order to temporarily freeze the $40,000 would prevent him from taking part, to the limited extent that he can, in this trial.  He did not refer me to any matter relevant to that consideration.  The husband, however, has asked for some time in which to compile some written submissions in opposition to the injunction.  He says that he needs time to investigate the law about it. 

17. I propose to give the husband the opportunity to do this, but I did ask him what prejudice or disadvantage he suffered in the event that I just froze the $40,000 until such time as he is in a position to make his submissions.  He responded that whilst I may have a discretion to freeze the money temporarily

    
    

    I don't have the right, that the money is V’s money, has always been V’s money, has been given to V by his parents and as such he would need to be able to refer to his parents before saying whether or not any part of the money could be used for costs. 

18. It seems to me that these are all matters that will have to be considered as part of the husband’s case in relation to a liability for costs.  The financial situation of the parties is one of the things I take into account.  In taking into account whether he has an ability to pay costs out of the $65,000, I would have to be satisfied that the $65,000 is his.  I do not understand that any application for costs will be made against V in the event that it is found that the moneys are beneficially that of the child. 

19. The husband has on a number of occasions in his submissions referred to the moral imperative of the costs issue.  He has referred to it as being a moral issue.  He says that he is not stingy in relation to money, has not been, and if the wife seeks money for her costs then he would consider it but that he does not commit himself now.  In the circumstances of this case, and even if the husband's case is ultimately accepted - that the moneys are those of V -

    
    

    I do not see that V's interests are prejudiced by me making an order freezing $40,000 of the money, pending the husband making application to dissolve that order and supporting it by his researched submissions.  I therefore make orders. 

20. I wish to make it clear in the context of the general liberty to apply that I will hear the husband when he has provided his written submissions in opposition to a continuation of the order.  I do not restrict him in the time he has to prepare those, but they can be submitted in writing, as he has indicated he wants to do, and at that point I will consider whether or not the injunction should continue. 

21. The order will be available in due course.  It should be acted upon promptly. 

I certify that the preceding twenty one (21) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Bennett

Associate: 

Date:  30 March 2007

IT IS NOTED that this judgment for all publication and reporting purposes be referred to as ADAMS & ADAMS