BEADLE & GOODRIDGE
[2020] FamCAFC 82
•16 April 2020
FAMILY COURT OF AUSTRALIA
| BEADLE & GOODRIDGE | [2020] FamCAFC 82 |
| FAMILY LAW – APPLICATION IN AN APPEAL – SECURITY FOR COSTS – Where it is common ground that the respondents are impecunious – Where that circumstance per se cannot be a basis for ordering an appellant to provide security for costs – Where the applicant suggests that it is only necessary at this stage to look at the issue of leave to appeal – Where this Court considers it necessary to look at the grounds of appeal, given their success will provide a basis for leave to appeal being granted – Where if leave is required, then the issues raised in the appeals and cross-appeal are sufficiently important that leave should be granted – Where the first respondent has an arguable case in the appeals and the second respondent has an arguable case in the cross-appeal – Where the appeals and the cross-appeal have a reasonable chance of success and thus to order security where the respondents are impecunious would be oppressive and would stifle the appeals and the cross-appeal – Where previously made unpaid costs orders can be explained and thus this fact does not justify the making of an order for security – Application dismissed. FAMILY LAW – COSTS – Where the respondents foreshadowed seeking costs given the dismissal of the application – Regime for the filing and serving of written submissions ordered. |
| Family Law Act 1975 (Cth) s 117(2) and 117(2A) Family Law Rules 2004 (Cth) rr 15.71, 19.05(2) |
| Adult Guardian and Mother’s parents and B and Child’s Representative (2002) FLC 93-116 |
| APPLICANT: | Ms Beadle |
| FIRST RESPONDENT: | Ms Goodridge |
| SECOND RESPONDENT: | Mr Goodridge |
| FILE NUMBER: | MLC | 10573 | of | 2015 |
| APPEAL NUMBERS: | SOA | 64 & 70 | of | 2019 |
| DATE DELIVERED: | 16 April 2020 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Strickland J |
| HEARING DATE: | 13 March 2020 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATES: | 11 October 2019 30 October 2019 |
| LOWER COURT MNC: | [2019] FamCA 709 [2019] FamCA 786 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Dr R Smith |
| SOLICITORS FOR THE APPLICANT: | Berry Family Law |
| COUNSEL FOR THE FIRST RESPONDENT: | Mr Bartfeld of Queen’s Counsel |
| SOLICITORS FOR THE FIRST RESPONDENT: | Kennedy Partners |
COUNSEL FOR THE SECOND RESPONDENT: | Ms Smallwood of Senior Counsel |
| SOLICITORS FOR THE SECOND RESPONDENT: | Aston Legal Group |
Orders made 13 March 2020
The Application in an Appeal filed on 31 January 2020 be dismissed.
IT IS NOTED THAT:
When the reasons for judgment issue an order setting out a regime for the filing of submissions in relation to the question of costs will be provided.
Orders made 16 April 2020
Within 21 days of the date hereof the first and second respondents file and serve written submissions in relation to the question of costs.
Within 14 days of the receipt of the said written submissions the applicant file and serve written submissions in response.
Within seven days of the receipt of the written submissions in response the first and second respondents file and serve any written submissions in reply.
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 Beadle & Goodridge 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).
| THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT MELBOURNE |
Appeal Numbers: SOA 64 & 70 of 2019
File Number: MLC 10573 of 2015
| Ms Beadle |
Applicant
And
| Ms Goodridge |
First Respondent
And
| Mr Goodridge |
Second Respondent
REASONS FOR JUDGMENT
Introduction
On 31 January 2020 an Application in an Appeal was filed by Ms Beadle (“the applicant”) in appeal nos. SOA 64 and 70 of 2019, seeking an order for security for costs.
The application was opposed by Ms Goodridge (“the first respondent”) and Mr Goodridge (“the second respondent”) and Responses seeking dismissal of the application were filed by the first respondent on 11 March 2020, and tendered by the second respondent and received by the court on 13 March 2020.
There was no appearance by the third and fourth respondents named in the application, however that was to be expected in relation to the fourth respondent, given that they had no interest in the matter. There is no explanation of which I am aware for the absence of the third respondent.
The orders sought in the application were for the first respondent and/or the second respondent to pay the sum of $76,355 calculated on an indemnity basis to the trust account of the applicant’s solicitors, within seven days, and if that did not occur, the appeals filed by the first respondent and the cross-appeal filed by the second respondent be taken to be abandoned. However, at the hearing of the application, the applicant sought instead the amount of $50,000 calculated on a party/party basis, but if that was not paid, then the appeals and the cross-appeal be stayed. That was a wise decision by the applicant because there was nothing in the affidavit filed in support of the application that justified costs being calculated on an indemnity basis, or that provided a justification for the appeals and the cross-appeal to be taken to be abandoned if the amount sought was not paid.
The application arose in relation to first, an appeal filed by the first respondent on 8 November 2019, and a cross-appeal filed by the second respondent also on 8 November 2019, from procedural orders made by a judge of the Family Court of Australia on 11 October 2019 (the first appeal), and secondly, an appeal filed by the first respondent on 27 November 2019 from an order for costs made by the same judge on 30 October 2019 (the second appeal).
Leave to appeal is sought in the Notices of Appeal and in the Notice of Cross-Appeal.
It is anticipated that the appeals and the cross-appeal will be listed for hearing in the next Full Court sittings in the Melbourne Registry in the week commencing 4 May 2020.
Relevant Background
On 12 November 2015, the second respondent instituted proceedings for property settlement in the Federal Circuit Court of Australia. That application was heard by the primary judge as a judge of the Federal Circuit Court of Australia over eight days in August and September 2017, and judgment was reserved.
On 29 November 2017, the second respondent placed the entity J Pty Ltd into voluntary liquidation, and the next day he was declared bankrupt.
On 7 December 2017, the applicant filed an Application seeking leave to reopen the proceedings and call further evidence.
On 19 December 2017, the primary judge delivered judgment in the property settlement proceedings. His Honour determined the percentage split of the assets as between the parties, and ordered them to provide Minutes of Order, giving effect to his Honour’s reasons, within 21 days. It is common ground that Minutes of Order were never presented, and the application to reopen was never heard and was ultimately adjourned sine die on 12 April 2018.
On 5 April 2019, the matter was transferred to the Family Court of Australia following his Honour’s appointment as a judge of that court, and was listed before his Honour on 5 June 2019.
On 5 June 2019, on the application of the applicant, his Honour ordered pursuant to r 15.71 of the Family Law Rules 2004 (Cth) (“the Rules”), that the first respondent, and one other person, attend court on 15 July 2019 “for the purposes of examination and bring with him and her all documents relating to the sale, receipt and transport of cattle relating to the Goodridge family including such sale, receipt and transport of cattle in May 2018.”
On 15 July 2019, the first respondent and the other person were examined, and on the application of the applicant, an order was made for the second respondent to attend court for examination pursuant to r 15.71. The second respondent was not in attendance, and thus that order was made ex parte, and without prior notice.
On 23 September 2019, the first respondent filed an Application seeking to intervene in the proceedings (given that she was not a party), seeking a stay of the orders made on 15 July 2019, and of the proceedings, as an abuse of process, and to exclude the evidence adduced on 15 July 2019.
On 24 September 2019, the second respondent also filed an Application seeking orders for a stay of the proceedings as an abuse of process.
Those applications were heard on 1 October 2019, and on 11 October 2019 his Honour dismissed them. That order is the subject of the appeal and cross-appeal in appeal no. SOA 64 of 2019, the first appeal.
On 30 October 2019, his Honour heard the applicant’s application for costs, and made the order the subject of appeal no. SOA 70 of 2019, the second appeal.
The Relevant Law
The law governing security for costs is not in doubt. The power for the court to make such an order is found in s 117(2) of the Family Law Act 1975 (Cth) (“the Act”), which provides:
If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), [4A] and (5) 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.
Section 117(2A) of the Act sets out the matters to which the court shall have regard in considering what order (if any) should be made, and r 19.05(2) of the Rules lists the matters to which the court may have regard. Relevantly those matters are:
a)the appellant’s financial means;
b)the prospects of success or merits of the appeal;
c)the genuineness of the application;
d)whether an order for security for costs would be oppressive or would stifle the case;
e)whether the case involves a matter of public importance;
f)whether a party has an order, in the same or another case (including a case in another court) against the other party for costs that remains unpaid;
g)the likely costs of the case.
The applicant relied on four of those matters in support of the application, namely:
a)the financial circumstances of the parties;
b)the merits of the appeals and the cross-appeal;
c)the question of the stifling of the appeal; and
d)the outstanding costs orders.
The financial circumstances of the parties
It is common ground that the respondents are impecunious. However, that per se cannot be a basis for ordering an appellant to provide security for costs. As the Full Court explained in Halsbury & Halsbury [2008] FamCAFC 170 at [22]:
… [i]t must be remembered that as has been explained in a number of decisions of the Full Court, impecuniosity of an appellant is not the only or deciding factor in an application for security in respect of the costs to an appeal … rather it is one factor which must be balanced against other factors, particularly the prospects of success of, or the merits of, the appeal …
(Authorities omitted)
The merits of the appeals and the cross-appeal
As mentioned, leave to appeal is sought in both appeals and in the cross-appeal. Despite that, the first respondent suggests that leave is not required, but in my view it is arguable that leave is required.
The facts relied on in support of the application for leave to appeal in the first appeal are as follows:
1.The appellant seeks leave to appeal the orders of [the primary judge] made 11 October 2019 dismissing the application in a case filed by Ms Goodridge dated 23 September 2019.
2. The reasons leave to appeal should be granted are:
2.1if the judgment is allowed to stand, the appellant will suffer a substantial injustice;
2.2the errors alleged cannot be corrected otherwise than on appeal;
2.3from the appellant’s perspective, the judgment is final, notwithstanding that it is interim for the purposes of obtaining leave.
And the facts relied on in support of the application for leave to appeal in the cross-appeal are as follows:
1.The appellant seeks leave to appeal the orders of [the primary judge] made 11 October 2019 dismissing the application in a case filed by Mr Goodridge on 24 September 2019.
2.In the event that leave is not granted the appellant will suffer a substantial injustice.
Plainly, the success of otherwise of these applications depends on the success or otherwise of the respective grounds of appeal, and I will turn to consider those merits shortly.
The applicant suggests that it is only necessary at this stage to look at the issue of leave to appeal/cross-appeal, but given that for the purposes of the application before the court it is a matter of considering as best the court can, the merits of the appeal/cross-appeal, I consider it necessary to look at the grounds of the appeal/cross-appeal. Indeed, I can say that my preliminary view is that the issues raised in the appeal and the cross-appeal are sufficiently important that leave should be granted, if required.
In relation to the second appeal, the facts relied on in support of the application for leave to appeal are as follows:
1.The appellant seeks leave to appeal the orders of [the primary judge] made 30 October 2019 ordering that the appellant and the first respondent pay the costs of the second respondent in relation to the application in a case filed by the appellant, Ms Goodridge, on 23 September 2019.
2. The reasons leave to appeal should be granted are:
2.1it is premature for such an order to be made as the issue of the liability for costs in relation to the appellant’s application in a case filed 23 September 2019 has not been finally determined;
2.2the extent of the appellant’s obligation to pay the costs is unspecified and therefore contingent upon:
2.2.1the amount, if any, paid towards such costs by the first respondent; and
2.2.2final determination of the issue of costs and the liability, if any, of third parties.
2.3if the judgment is allowed to stand, the appellant will suffer a substantial injustice by bearing the burden of liability for all of the costs, plus any interest which may be accrued, to avoid enforcement or similar action.
2.4the errors alleged cannot be corrected otherwise than on appeal;
2.5from the appellant’s perspective, the judgment is final, notwithstanding that it is interim for the purposes of obtaining leave.
It would seem that the basis of leave to appeal being required is the fact that although his Honour made an order for costs, and that would normally be considered a final order, his Honour went on and made what he described as a “direction”, namely:
The application by the first respondent (the applicant before this Court) for an order that the solicitors for Mr Goodridge and Mrs Goodridge to be jointly and severally liable for the payment of the indemnity costs order made in paragraph 1 hereof is to be heard on 8 January 2020 at 10am.
Again, the success or otherwise of this application depends on the success or otherwise of the respective grounds of appeal, and I will turn to consider those merits shortly.
Once more, the applicant suggests that it is only necessary at this stage to look at the issue of leave to appeal, but to repeat, given that for the purposes of the application before the court it is a matter of considering as best the court can the merits of the appeal, I consider it necessary to look at the grounds of appeal. Further, with this application for leave, my preliminary view is also that the issue raised in the appeal is sufficiently important, that leave should be granted, if required.
The first appeal (and the cross-appeal)
There are 16 grounds of appeal in the first appeal, and four in the cross-appeal. I note though that in Ground 3 of the cross-appeal, the second respondent adopts Grounds 2 – 15 in the appeal.
In summary, the grounds raise issues of errors of principle, lack of adequate reasons, errors of fact, errors of procedure and matters of weight.
It is common ground that it is not necessary, even if it were possible, to undertake an in-depth analysis of the merits of the appeal/cross-appeal at this stage. What is required instead is to make an assessment of whether there is an arguable case.
Helpfully, the first respondent has categorised the grounds of appeal in the first appeal into three groups, with some overlap, namely:
22.1Grounds 1, 5 and 10, which relate to the status of the proceedings generally, and the court’s ability to make orders following the delivery of final judgment, and without determination of the (sic) Ms Beadle’s application to re-open the proceedings and call further evidence filed on 7 December 2017 (amended on 2 February 2018 and 19 March 2018);
22.2Grounds 2, 3, 5.1, 8, 9, 11, 13 and 16, which relate to the appropriateness or otherwise of the application of rule 15.71 FLR to call witnesses for examination; and
22.3Grounds [4], 6, 7, 8, 9, [10] 12, 14 and 15 relating to the application of legal principles associated with abuse of process, collateral purpose and procedural fairness.
As to the first group, it is entirely unclear from his Honour’s reasons on what basis the court was able to make orders including for witnesses to attend for cross-examination, when final judgment had been delivered on 17 December 2017, and there had been no determination, let alone hearing, of the applicant’s application to re-open the proceedings and call further evidence. Thus, on 5 June 2019, it seems that there was no application before the court on which to make orders, procedural or otherwise.
As to the second group, a number of issues are raised. For example, r 15.71 provides for the witness to be called on the court’s initiative as the court’s witness, and not called as a witness by a party.
Secondly, the orders were made effectively on an ex parte basis, depriving the other parties of procedural fairness.
Thirdly, it is arguable that his Honour erred in his application of the authorities in relation to r 15.71, and in particular his treatment of what was said in Faden & Faden (No 3) [2011] FamCA 897, his citation of Martin & Martin and Anor (No. 4) [2014] FamCA 442, and his application of Whitecross & Reilly [2016] FamCA 254.
As to the third group, as explained by counsel for the applicant to his Honour on 5 June 2019, and 15 July 2019, the purpose of the cross-examination was for collateral purposes, namely to establish a basis to initiate contempt proceedings and to enable the primary judge to refer the evidence to the appropriate authorities for prosecution. They would also appear to be improper purposes, and thus, prima facie, an abuse of the court’s process, and his Honour appears to have erred in not staying those proceedings on that basis.
As submitted by the first respondent at paragraph 44 of the summary of argument dated 13 March 2020, it is also arguable that:
In circumstances where the examination of the persons the subject of the examination orders was foreshadowed to be for the collateral purpose of adducing evidence for the sole or predominant purpose of investigating potential claims against those persons, without those witnesses being formally placed on notice of the nature and particulars of the matters about which they were being investigated and being afforded representation to protect their interests, this was a breach of natural justice and/or procedural fairness for those persons.
Plainly, the same concerns arise in the cross-appeal.
I note here that the applicant indicated that she was not able to say that the appeal and cross-appeal had no prospects of success or were doomed to fail.
In summary then, I am persuaded that the first respondent has an arguable case in this appeal, and the second respondent has an arguable case in the cross-appeal.
The second appeal
There are seven grounds of appeal relied on. Perhaps the two grounds to highlight are Grounds 4 and 5, and they assert as follows:
4.The primary judge erred in failing to distinguish the quantum of costs payable by each of the appellant and the first respondent.
5.The primary judge erred in ordering that the appellant and the first respondent pay the costs ordered within 30 days in circumstances where there has not been a final determination of the apportionment of liability between the parties against whom the second respondent sought a costs order.
With Ground 4, that highlights a real issue with the order made. There is no basis to determine what each of the first and second respondents are required to pay, and why one of the two should have to pay the whole amount. All that his Honour says about this is as follows:
53.In those circumstances it is possible at this juncture to do two things. First, I make an indemnity costs order against Mr Goodridge and Mrs Goodridge in the sum of $33 943.35. Such sum is to be satisfied from either or both but not to exceed that sum, irrespective of the person from whom it is recovered. Second, having regard to the fact that a high likelihood exists that no amount of the sum ordered will be recovered from the bankrupt or Mrs Goodridge I will hear from the solicitors about whether to make an order against them in the same amount. That will be a hearing (not written submissions) that should take no more than half a day. If cross examination and verbal submissions are likely to exceed that duration, the parties should notify my associates. For that further hearing I fix 8 January 2020 and otherwise grant liberty to all parties to apply.
But that takes the issue no further.
With Ground 5, it is plainly arguable that his Honour erred in making the order, when it was still to be determined, whether, and to what extent, the solicitors for the parties could be required to pay any or all of the costs.
Again I note that the applicant was not able to say that this appeal had no prospects of success or was doomed to fail.
Thus, I am also persuaded that the second respondent has an arguable case in this appeal.
Whether an order for security would be oppressive or would stifle the case
As I have said, it is common ground that the respondents are impecunious; the second respondent is an undischarged bankrupt and receives Centrelink payments, and the first respondent is unemployed and is wholly dependent on the second respondent.
Thus, an order for security would stifle the appeals and the cross-appeal and would therefore be oppressive. However, that has to be balanced against the purposes of an order for security, namely to ensure that a successful respondent is able to recover his or her costs from an unsuccessful appellant.
Relevantly, the Full Court has said that in these circumstances, the merits of the appeal assume particular importance (Adult Guardian and Mother’s parents and B and Child’s Representative (2002) FLC 93-116). In other words, the stronger the grounds of appeal are, the less likely the appeal will be dismissed, and the respondent will not then be in a position of pursuing costs.
Here, I consider that the appeals and the cross-appeal have a reasonable chance of success, and thus, to order security where the respondents are impecunious would be oppressive, and would stifle the appeals and the cross-appeal.
Outstanding costs orders
There are two orders relied on by the applicant in this regard. First, an order made on 8 November 2017 that the second respondent pay the applicant’s costs on an indemnity basis fixed in the sum of $6,306.30. Secondly, the order for costs the subject of the second appeal.
With the first order, that has not been complied with given the second respondent became bankrupt on 7 December 2017, and he has not been in a position to pay those costs as a result. It of course is not an order with which the first respondent has to comply.
As for the second order, that is the subject of the second appeal, and although there has been no stay of the order, neither the first or second respondent is in a financial position to meet that order. In any event it is an order that will stand or fall with the appeal.
This is clearly a factor to be taken into account, but it is explainable, and, in the circumstances, the fact that there are these unpaid costs orders does not justify the making of an order for security.
Conclusion
The court is not persuaded that there are circumstances that justify an order for security for costs being made.
Costs
At the hearing of the application, the respondents foreshadowed seeking orders for costs, given the dismissal of the application. I indicated that that should be dealt with by way of written submissions, and I will provide a regime for that purpose in the further orders that I make.
I certify that the preceding fifty-eight (58) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered on 16 April 2020.
Associate:
Date: 16 April 2020
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