BHATT & ACHARYA
[2018] FamCAFC 230
•22 November 2018
FAMILY COURT OF AUSTRALIA
| BHATT & ACHARYA | [2018] FamCAFC 230 |
| FAMILY LAW – APPLICATION IN AN APPEAL – SECURITY FOR COSTS OF APPEALS – Where the appeal has limited prospects of success – Where there are outstanding costs orders against the respondent – Where an order for security for costs would likely stifle the appeal – Where the applicant husband ordinarily resides out of Australia – Where there are circumstances justifying an order for security of costs – Where the wife opposes the application – Discretionary factors – Rule 19.05(2) of the Family Law Rules 2004 (Cth) – Where it was determined that in the circumstances of this case there are justifying circumstances within the meaning of s 117(2) of the Family Law Act 1975 (Cth) for an order for security for costs – Application allowed. |
| Family Law Act 1975 (Cth) s 117 Family Law Rules 2004 (Cth) rr 19.05, 22.40 |
| Adult Guardian and Mother’s Parents v B and Child’s Representative (2002) FLC 93-116; [2002] FamCA 874 Atkins & Hunt(Security for Costs) (2015) FLC 93-646; [2015] FamCAFC 66 Bahonko v Sterjov (2008) 166 FCR 415; [2008] FCAFC 30 Halsbury & Halsbury [2008] FamCAFC 170 Jones and Jones (2001) FLC 93-080; [2001] FamCA 460 JRS & KM (2005) FLC 93-223; [2005] FamCA 338 Luadaka v Luadaka (1998) FLC 92-830; [1998] FamCA 1520 Palma & Caleffi and Anor (Security for Costs) [2011] FamCAFC 174 Sawer & Sawer [2007] FamCA 140 |
| APPLICANT: | Mr Bhatt |
| RESPONDENT: | Ms Acharya |
| FILE NUMBER: | SYC | 5732 | of | 2015 |
| APPEAL NUMBER: | EA | 126 | of | 2018 |
| DATE DELIVERED: | 22 November 2018 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Ainslie-Wallace J |
| HEARING DATE: | 20 November 2018 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 7 September 2018 |
| LOWER COURT MNC: | [2018] FamCA 789 |
REPRESENTATION
| THE APPLICANT: | In person by telephone link from Asia |
| THE RESPONDENT: | In person |
Orders
The application filed on 8 November 2018 to review the decision of the Appeal Registrar is dismissed.
Within twenty-eight (28) days of the date of this order the wife shall pay to the husband’s solicitors the sum of $25,000 to be held as security for any costs awarded to the husband in relation to appeal EA 126 of 2018.
In the event that the wife fails to comply with order (2) hereof then the said appeal be stayed pending payment by the wife of the said amount.
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 Bhatt & Acharya 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 SYDNEY |
Appeal Number: EA 126 of 2018
File Number: SYC 5732 of 2015
| Mr Bhatt |
Appellant
and
| Ms Acharya |
Respondent
REASONS FOR JUDGMENT
On 7 September 2018 Le Poer Trench J made property orders as between the wife, Ms Acharya and the husband Mr Bhatt. By a Notice of Appeal
(EA 126 of 2018) filed on 2 October 2018 the wife appeals his Honour’s orders.
Background
His Honour’s orders, in short, provide that a property in the husband’s name in a Sydney suburb (“the property”) be sold and the net proceeds be divided equally between the parties. His Honour further ordered that the husband’s superannuation fund be split and that the wife receive 30 per cent of that fund.
The parties married in 1988 in India and shortly afterwards in 1989 moved to live in Australia. They separated in 1998 and were divorced in 2001. There are two adult children of the relationship.
In 2009 the property was purchased in the husband’s name. It is subject to a significant mortgage.
The husband commenced property settlement proceedings in the Family Court in September 2015 and the progress of the matter to trial has been protracted.
In any event, before the primary judge the wife contended that the husband held the whole of the property on trust for her. That contention was rejected by the primary judge.
In September 2018 the WW Bank took possession of the property because of defaults on the loan. They are presently in the process of selling it although it appeared that at the time of the hearing of this application, it had not been sold.
The husband submitted that the present debt in relation to that property is in the order of $1m and interest on the debt is accruing at, he said, $5,000 each week.
Notwithstanding the wife’s Notice of Appeal challenges each of his Honour’s orders, she has already put in train execution of the orders as provide for her to receive the split of the husband’s superannuation.
It is against this brief factual background that the wife’s application should be viewed.
The wife’s application to review a decision of the Appeal Registrar
On 25 October 2018, on the wife’s application, the primary judge stayed the operation of his orders on condition that the wife lodge an appeal and sought expedition of that appeal.
On 26 October 2018 the wife contacted the Eastern Appeals Registry and enquired whether she could appeal the stay orders by amending the Notice of Appeal already filed. She was advised that she needed to file a new Notice of Appeal to appeal the stay orders.
Notwithstanding this entirely orthodox advice, the wife then filed an Application in an Appeal which, shorn of submission and argument sought:
…
5.That the orders made on 25 October 2018 and provided on 26 October 2018 by Justice Le Poer Trench be set aside, on grounds:
a. they set unfair conditions on the wife, which limit and obstruct her ability to deal with her obligations and rights as per the Rules and the judicial discretions and decisions of the Appeal division.
b. they do not fulfil the requirement to not stifle or limit the scope of the Appeal.
c. they do not preserve the assets, thereby putting the wife’s interests at an irrevocable juncture for loss or create irredeemable consequences for her.
d. they do not remedy or rectify the existing errors of fact and law/legislation that exist on the Final orders, which only again creates loss to the wife’s interests.
e. they do not address or remedy the fact that as a consequence of the Final orders the wife’s current personal circumstances have become untenable and catastrophic, which put her in excessive hardship, limitations and unstability.
f. they contain omissions that require rectification.
g. they contain further cost orders against the wife that are contradictory and not as per the evidence before the court or commensurate with the wife’s financial circumstances.
h. they create a crippling prejudice to the wife’s interests, as she seeks to protect by way of the Appeal.
6.Consequently, the Application for Stay of Final orders as filed on
12 October 2018 by the wife be re-determined by the Appeal division on existing documents filed.7.That the Application as in order 6 is decided by a Single Judge of the Appeal division and the wife is given permission to file the appeal books by email.
(As per the original)
This application was rejected by the Appeal Registry. The wife sought a review of that decision and thus the matter was before the Court.
The orders sought by the wife on the application for review are:
1.That the decision of the Registrar, rejecting the filing of the wife’s Application in an Appeal and supporting Affidavit as lodged on
5 November 2018 be reviewed.2.That the wife’s obligation to seek expedition as per orders of Justice Le Poer Trench as made on 25 October and provided on 26 October 2018 is dismissed.
3.Expedition of the Appeal number EAA 126/2018 as filed on 02 October 2018 by the wife is not granted, as no grounds for it are stated or are found to exist at this stage of the proceeding.
As is clear, both the rejected application and the orders sought on the review of the Registrar’s decision are in effect, an appeal against the stay orders made by the primary judge on 26 October 2018.
The wife contends that the advice given to her by the registry that she should file an appeal against the stay orders exposed a “gap” in the rules because, she said, the stay is unfair and acts to defeat the principal appeal and so too to bring an appeal against the stay orders is unfair and defeats the appeal.
The wife argued that there is no basis for the appeal to be expedited. She said that she is seeking a grant of legal aid and has sought some government assistance to fund the provision of the trial transcript and she argued that if expedition was granted she could not comply with directions to get the appeal ready in a time required for an expedited appeal. She added that she had in relation to other applications, sought expedition which was refused and she was ordered to pay the resulting costs.
Ultimately the wife submitted that for these reasons it was not in her interests to seek expedition of the appeal.
Notwithstanding the wife’s detailed affidavit in support of her application and her oral argument, I do not understand how to stay the orders albeit on the basis that she seek expedition, operates to thwart the principal appeal especially in circumstances where the bank is in possession of the property that is the subject of the appeal.
Nonetheless, in a nutshell, the wife wishes the stay order to be discharged and a further stay made but which is not conditioned on her seeking expedition of her appeal.
The husband opposes the application. He says that the accruing interest on the property, the magnitude of the debt, the time that the proceedings have taken to reach this point and his desire to finalise these proceedings mean it would be unfair to him if there was no incentive on the wife to prepare for the appeal so that it can be heard expeditiously and the process was further attenuated.
I note here as I did during the hearing, fairness is not the sole preserve of the wife. She said a number of times that it was not in her interests to seek expedition of her appeal and I have set out above the reasons why she so contends. However, it needs to be understood that the husband is entitled to the fruits of the property proceedings and that cannot happen until the appeal is heard and determined. A further complicating feature is the accruing debt secured against the property which, one assumes, reduces daily the parties’ ultimate share of the proceeds of the sale.
Rule 22.40 of the Family Law Rules 2004 (Cth) (“the Rules”) provides for review of a Regional Appeal Registrar’s order by a judge of the Appeal Division:
A party may apply for a review of a Regional Appeal Registrar's order relating to the conduct of an appeal by filing an Application in an Appeal in the Regional Appeal Registry, within 14 days after the order is made.
The review is a hearing de novo and it is thus unnecessary for the wife to demonstrate error in the Registrar’s decision.
The application attempted to be filed by the wife and rejected by the Registrar was patently an attempt to appeal the stay orders but circumvent the usual processes. The consequential orders she sought then, and those sought ancillary to the review application, ask for her challenge to the primary judge’s stay orders to be heard and determined by a single judge on the papers and for the order to be re-determined. Because the order was made by a judge of the Family Court, any appeal from that order must be heard by the Full Court. The application sought to be filed is incompetent and should be rejected for filing.
The application for review of the registrar’s decision is accordingly dismissed.
Application for Security for Costs
On 26 October 2018 the husband by application sought an order that the wife pay the sum of $25,000 into Court to be held as security against any costs that may be awarded to him if the appeal filed by the wife is unsuccessful.
The application is opposed by the wife.
It is important to bear in mind in considering the issue of security for costs that the wife brings this appeal as of right and any attempt to restrict that right requires careful scrutiny (JRS & KM (2005) FLC 93-223 at [22]).
The principles governing an application for security for costs were set out by the Full Court in Sawer & Sawer [2007] FamCA 140 as follows:
19. The power in this Court to make an order for security for costs is to be found in s 117(2) of the Act, which is in the following terms:
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) 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.
…
21. The authorities establish that in exercising the discretion to order security for costs, it may also be relevant for the Court to consider in addition to the financial circumstances of the parties and the other five specific matters mentioned in s 117(2A), the following matters:
a)the prospect of success of the litigation;
b)whether the claim for security is made bona fide;
c)whether or not an order for security would stifle the litigation;
d)whether or not the litigation may involve a matter of public importance;
e)whether or not there has been a delay in bringing the application for security;
f)whether there would be difficulty in enforcing an order for costs
(Luadaka v Luadaka (1998) FLC 92-830; Jones and Jones (2001) FLC 93-080; Adult Guardian and Mother's Parents and B and Child's Representative (2002) FLC 93-116.)
32.These factors are largely reflected in r 19.05(2) of the Rules and relevant to this matter, r 19.05(2)(g) provides that the Court may have regard to any unpaid costs orders when determining the security for costs application.
Prospects of success
The wife’s Notice of Appeal raises 19 challenges to his Honour’s orders. They are, in the main, either not proper grounds of appeal or so broad so as to make it impossible to understand the point of the grounds.
For example, Ground 2 asserts; “That the orders show a complete disregard for the wife’s welfare and safety. They create gender inequality”. Similarly, Ground 3 contends; “There is an error in judgment which is not commensurate with the evidence and history of the parties”. Ground 11 asserts; “Questions of law not given proper significance or action”.
The wife has made no attempt to identify anything close to appealable error.
True it is that the wife represents herself but she is by no means an ingénue to litigation. According to the husband’s affidavit, in the course of bringing the property settlement proceedings to a conclusion before the primary judge, the wife filed some 23 applications in the Family Court and in other courts. Further, the husband says, that the wife presently has lodged a Notice of Intention to Appeal the decision of the Supreme Court granting the Bank a Writ of Possession. Equally, it is apparent from her submissions on the application to review the decision of the Registrar, that the wife well understands and is well versed in the various rules relating to appeals.
What was said in Bahonko v Sterjov (2008) 166 FCR 415 at [3] is entirely apposite here:
3. Notwithstanding the obligation of an appeal court, where it is able to do so, to make its own evaluation of the material at first instance, it is a fundamental aspect of the appellate process that appeals are made available for the correction of error. This basic principle imposes an obligation upon an appellant to identify where error is to be found in a judgment under appeal, whether it be an error of fact, law or general principle. It is not necessary for an appeal court to hunt through all the material at first instance and re-canvass every aspect of it unless an occasion arises for suspecting, on reasonable grounds (generally those provided by the appellant), that such an examination may yield a conclusion of appealable error.
(Citations omitted)
The matter before the primary judge involved a number of issues of significant factual and legal complexity and it is readily apparent that his Honour gave careful and detailed consideration to the issues identified by him. He made assessments of the relative credibility of the parties and took those assessments into account in determining the disputed issues of fact before him as the rested on the reliability of the witnesses. I can see no reason from his judgment to conclude that his orders are attended by error.
Thus, the wife’s prospects of appeal are, in my view poor indeed.
Unsatisfied costs orders
It seems that there have already been three costs orders totalling in excess of $30,000 made against the wife in the Family Court of Australia which have not been paid. Those orders are:
·21 September 2016 made by Ryan J which was assessed at approximately $5,654.98;
·22 March 2017 made by the Full Court (Thackray, Aldridge & Watts JJ) in Appeal No EA 62 of 2016 and assessed at $24,047.22; and
·24 November 2017 made by Judge Boyle.
The husband further said that four other applications for costs have been made and are awaiting judgment. In her submissions, the wife contended that these orders were wrongly made and said that she wished to appeal the making of those orders. It is clear that she has not done so.
Further, the husband contends, and, again it is not disputed that the wife refuses to provide him or the Court with her residential address. The husband raises this as an indication of difficulties he will face in the event that the appeal fails and he is required to contact the wife or serve her with process in order to secure payment of any costs orders ultimately made. The wife, clearly refuses to disclose where she lives and cited concerns for her safety and welfare if she did.
It is tolerably clear that the wife disputes the validity of the costs orders already made and I am prepared to accept for the purposes of this application that the husband will have significant difficulty in obtaining payment of those costs other than from the sale proceeds of the property, if in the result, there is any equity available to be divided between the parties. His Honour the primary judge estimated in the reasons that on sale of the property and after payment of the debts and expenses, from the net proceeds, the wife was likely to receive $153,388.00.
Financial circumstances of the parties
The wife is in receipt of Centrelink benefits and it seems undisputed that she is impecunious. She has apparently no present capacity to meet any ordered security.
The husband is working and living in Asia although he said he wished to return to live in Sydney. While his financial position is far from clear, it is safe to assume it is stronger than that of the wife.
That the wife is impecunious does not prevent the making of an order for security for costs. In Adult Guardian and Mother’s Parents v B and Child’s Representative (2002) FLC 93-116, the Court said:
71. It is of course a matter of serious concern that an impecunious appellant may be prevented by the making of an order for the provision of security for the costs of the appeal, from pursuing his or her rights of appeal. However, that concern must be balanced against an equally serious concern for the position of a respondent to the appeal who, in the event that the appeal should fail, and because of the impecuniosity of the appellant, will be left to bear the burden of his or her own costs of successfully resisting the appeal.
I also bear in mind what was said by the Court in Halsbury & Halsbury [2008] FamCAFC 170:
34. Before concluding we take the opportunity to make the following observations regarding applications for security in relation to the costs of an appeal. Such applications appear increasingly to be taking up the time and resources of the litigants and of the Court. The proper place of such applications and the competing rights that lie at the heart of such applications need to be borne in mind by those seeking them.
35. Appeals are a part of our system of law. They operate as part of the proper checks and balances on the actions and decisions of trial judges. Litigants have a right to appeal in circumstances where they, properly and bona fide, allege error on the part of the trial judge (subject of course to the requirements in certain circumstances of leave to appeal being granted). That right to appeal is an important part of our system of law. It should not be fettered except for good reason.
Whether an order for security for costs will stifle the appeal
On the wife’s account she has no funds with which to meet any ordered security and, it is likely that if an order for security for costs is made it will stifle the appeal. As I have said, it is a serious matter to prevent a party with a right of appeal from bringing that appeal by making an order for security for costs. However, given my assessment of the prospects of the success of the appeal and the likelihood that the wife will be unable to pay and indeed unwilling to pay any ordered costs and, given that the wife’s share of the proceeds of sale of the property is diminishing according to the husband by the accruing of interest on the loan secured over the property, I propose to make an order that the wife provide security against the husband’s costs in the event that the appeal is unsuccessful.
I certify that the preceding forty-eight (48) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Ainslie-Wallace delivered on
22 November 2018.
Associate:
Date: 22 November 2018
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