Cornett & Hext (No 2)
[2023] FedCFamC1F 543
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Cornett & Hext (No 2) [2023] FedCFamC1F 543
File number(s): MLC 5714 of 2018 Judgment of: MCGUIRE J Date of judgment: 4 July 2023 Catchwords: FAMILY LAW – Application for security for costs – Where the wife has filed an Application for Review - Where the wife has not complied with a previous costs order – Where the husband seeks security for costs – Where the husband asserts that any costs order that may arise from the Application for Review may not be complied with – Application granted. Legislation: Family Law Act 1975 (Cth) s 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021(Cth) rr 12.02, 12.03
Cases cited: Jones & Jones (2001) FLC 93-080; [2001] FamCA 460
Luadaka & Luadaka (1998) FLC 92-830; [1998] FamCA 1520
Division: Division 1 First Instance Number of paragraphs: 36 Date of hearing: 29 June 2023 Place: Hobart (via Microsoft Teams) delivered in Melbourne Counsel for the Applicant: Mr Dunlop Solicitor for the Applicant: Kenna Teasdale Lawyers Counsel for the Respondent: Litigant in Person ORDERS
MLC 5714 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR HEXT
Applicant
AND: MS CORNETT
Respondent
order made by:
MCGUIRE J
DATE OF ORDER:
4 JULY 2023
THE COURT ORDERS THAT:
1.Not later than 4:00PM on Monday, 10 July 2023, the respondent, Ms Cornett, deposit the sum of $18,000 into the trust account of Kenna Teasdale Lawyers as security for costs and such to be held on trust for the parties pending further orders.
2.Should the respondent not comply with Order 1 herein by the due date the Application for Review currently listed for 12 July 2023 be removed from the list of pending cases and stayed until further order.
3.The Application by the husband, Mr Hext, for costs of an incidental to the hearing of the Application for security of costs is noted and reserved.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Cornett & Hext has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
MCGUIRE J
The application before me is one by the husband, Mr Hext, seeking an order providing security for costs in a quantum of $18,000, in respect of the pending Application for Review filed by the respondent wife, Ms Cornett, listed for hearing before me on 12 July 2023.
The application is opposed by the wife who is self-represented before me.
BACKGROUND
The parties have been involved in prolonged litigation from at least 2018 in this Court and in other jurisdictions.
Specifically, property and parenting issues were determined by Williams J in February 2021 where orders were made that inter alia the three children of the parties live with the father, the father have sole parental responsibility for those children, and that the children spend no time with the mother, with communication being limited to cards or letters at Christmas and on birthdays. Property orders were made inter alia whereby the wife received cash of $89,136.05 and the husband cash of $1,248,533.12.
Each of the parties now de pose to having expended around $980,000 on legal costs in this Court alone, but with further costs incurred in respect of further local State Court matters.
The mother unsuccessfully appealed the orders of Williams J resulting in a costs order against her from the Full Court in a quantum of $10,000. Significantly, that costs order remains unpaid from December 2021.
The mother has brought proceedings in other jurisdictions and notably intervention order applications in local courts with limited or no success.
The mother has a pending Contravention Application alleging 15 counts of contravention in this Court to be heard by Jarrett J on 3 August 2023.
In respect of her Contravention Application the mother caused a number of subpoena to be issued and has a pending application for leave to issue further subpoena. Objections were taken to the subpoena and heard before a Judicial Registrar. One objection was dealt with by consent. One objection was compromised. The remaining five further objections to the mother's subpoena were successful. It is the issue of these objections to the subpoena that are the subject matter of the Application for Review listed before me on 12 July 2023, and in respect of which the husband now seeks an order for security for costs.
RELEVANT LAW
The husband properly brings an Application in a Proceeding supported by an affidavit. The respondent wife has filed no Response, affidavit or financial statement. She did appear, however, unrepresented and I took submissions and evidence from the wife from the ‘bar table' and without objection from Counsel for the husband.
The applicant has an onus to establish circumstances justifying the orders sought and with reference to the matters at section 117 of the Family Law Act 1975 (Cth) ("the Act") and, in particular, the factors set out at section 117(2A).
Section 117 of the Act does not specify the circumstances in which an order for security for costs will be made, with each matter resting on its own facts and circumstances but where there must be circumstances to justify making such an order pursuant to section 117(2) of the Act.
There is a general rule at section 117(1) of the Act that each party be responsible for their own legal costs. That, however, is subject to a broad discretion by the Court at section 117(2) of the Act, whereby a court can make an award for costs if there are ‘justifying circumstances.’ It is well-established that the term justifying circumstances is not to be read as synonymous with ‘extraordinary’ circumstances. In considering whether or not there are justifying circumstances the Court is mandated to reference the relevant factors at section 117(2A).
Rule 12.02 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) also references applications for security for costs and assist the Court in setting out factors that the Court may consider including:
(a) the applicant’s financial means;
(b) the prospects of success or merits of the application;
(c) the genuineness of the application;
(d)whether the applicant’s lack of financial means was caused by the respondent’s conduct;
(e)whether an order for security for costs would be oppressive or would stifle the proceeding;
(f) whether the proceeding involves a matter of public importance;
(g)whether a party has an order, in the same or another proceeding (including a proceeding in another court), against the other party for costs that remain unpaid;
(h) whether the applicant ordinarily resides outside Australia;
(i) the likely costs of the proceeding;
(j) whether the applicant is a corporation;
(k) whether a party is receiving legal aid;
(l) any other relevant matter
Rule 12.03 provides that should a court order a party to give security for costs, the Court may also order that, if the security is not given in accordance with the order, the application or the response of the party be stayed. In the matter now before me, the applicant seeks an order that should the Court be inclined to make the order for security for costs then the Application for Review be ‘dismissed’, whereas, I understand the rules to contemplate a permanent stay or a stay until such time as the security for costs is paid.
The rules of this Court effectively enshrine long-standing considerations for the Court in such matters as evidenced in a long line of authority including in Luadaka v Luadaka.[1]
[1] Luadaka v Luadaka (1998) FLC92-830.
THE APPLICANT'S CASE
The crux of the applicant's case is that the respondent has historically pursued litigation against him, where she has been predominantly unsuccessful, with the implication that the litigation is oppressive where he does hold the benefit of parenting orders seeing the three children live with him and he have sole parental responsibility, with the children having an extremely limited communicative relationship with the mother. He says that he has spent some $980,000 on Family Law proceedings and further monies in ancillary proceedings in local State Courts. Emphasis is placed by the husband on he being the beneficiary of a costs order in the sum of $10,000 since December 2021, with such not being satisfied by the wife and hence where he says that should he benefit from a further costs application in respect of the Application for Review then his pursuit of those costs will be arduous, expensive and possibly unsuccessful.
He says that the Application for Review is, prima facie, unmeritorious, where he has the benefit of the determination of the Judicial Registrar on the discrete issue of subpoena objections.
THE RESPONDENT'S CASE
The respondent appeared in person, not having filed a response or an affidavit. As mentioned above, she was given leave to give evidence from the 'bar table.'
As I understand it, she argues that she has a strong prima facie case in respect of the substantive application before the Court, being the 15 asserted counts of contravention by the husband, and therefore, a strong argument in respect of the subpoena which she says are required to support her substantive case.
The respondent states that she too has expended some $970,000 in Family Court proceedings, hence her current unrepresented status.
The respondent says that the applicant has been less than candid and transparent as to his real and actual income, which she says that, with bonuses, is approximately $750,000 per annum.
The respondent asserts that she is impecunious in that she has no employment, savings, or assets of value. The implication of this argument is that an order for security for costs would stifle her litigation.
CONSIDERATION
On its face, the applicant is in a far superior financial position than the respondent. Indeed, the evidence, untested as it is, suggests that the respondent is impecunious. It is well-established, however, that impecuniosity of a litigant is neither a prohibition on the making of costs order, nor is it of itself a basis for ordering that person to provide security.[2]
[2] Jones & Jones [2001] FLC 93-080.
Relevantly, however, the substantive application to which the interlocutory application for security for costs refers to is an Application for Review of a decision of a Judicial Registrar. Whilst it is not an appeal in the sense that a Review hearing is conducted as a hearing de novo, the fact remains that the applicant husband prima facie has the benefit of a judicial determination made with the benefit of evidence and submissions.
On the evidence before me neither party is in receipt of legal aid, and certainly the evidence suggests that the husband would not qualify for a grant of legal aid.
I am unable to make positive findings in respect of the submissions made on behalf of the applicant that the continued litigation is oppressive, except to observe again that he has been predominantly successful against the respondent in litigation in this Court and apparently in other jurisdictions,
The respondent concedes that she has not met a previous costs order against her and in favour of the applicant husband in the sum of $10,000, such outstanding from December 2021.
Together with the respondent's conceded impecuniosity, I accept the submission of Counsel for the applicant that any further costs order in his favour would be arduous in its enforcement.
The explanation given by the respondent as to the non-payment of the costs order that it is not being pursued by the husband is both factually incorrect and, in any event, unsatisfactory where she is, of course, bound by a court order.
I am mindful that the making of an order for security for costs which is to be accompanied by a 'stay' of the respondent's Review application before me, might stifle the respondent's prosecution of her application. Nevertheless, this is only one among a plethora of matters to consider on the application. I note, in any event, that my enquiry of the respondent as to how she might meet any consequent costs order from an unsuccessful Review application elicited a response along the lines that she has sympathetic and generous relatives from whom she might borrow. This being the case, then such relatives might accommodate an order for security for costs?
CONCLUSIONS:
I accept that the respondent is impecunious, but that is not a bar to an order for costs. In any event, I note again the respondent's own volunteered statement that she might be able to borrow from sympathetic and generous relatives.
I place some weight on the nature of the application being one for Review where, although not completely analogous to an appeal, the applicant stands here as the beneficiary of orders of the Judicial Registrar which did, of course, incur him costs.
I note that that the husband, as is his right, engages solicitors and Counsel, whereas the respondent wife tells me that she intends to be self-represented at the Review hearing.
Of some concern and relevance remains the fact that the husband is already the beneficiary of a costs order from December 2021 in a considerable sum of $10,000, such that the wife candidly concedes that she has not satisfied and does so without any reasonable explanation.
Taking all of those matters into account, I conclude that it is just and equitable to exercise my discretion in favour of the applicant husband, and order that the respondent wife gives security for the costs of the Review application in the quantum of $18,000, where I am of the view that such quantum is reasonable. Those funds will, be held on trust for the parties and will not be paid out to the solicitors for the husband or to the husband, without any consequent costs order in his favour, meaning, of course, that should the wife be successful in her Review application, or the husband unsuccessful in any subsequent costs application, then these monies will be returned to the wife.
I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice McGuire. Associate:
Dated: 4 July 2023
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