Cosic & Cosic
[2022] FedCFamC2F 500
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Cosic & Cosic [2022] FedCFamC2F 500
File number(s): ADC 2721 of 2020 Judgment of: JUDGE DICKSON Date of judgment: 22 April 2022 Catchwords: FAMILY LAW – Property – interim application for summary dismissal and security for costs – wife argues husband’s application is without merit, has no reasonable prospect of success and should be summarily dismissed – in the alternative the wife seeks security for costs - controversy between the parties as to a previous informal agreement for property settlement – husband seeks a superannuation splitting order from the wife - husband is self-represented – where it could not be said at this stage of the litigation that the husband has “no reasonable cause of action” as it relates to a superannuation splitting order at Trial, or that “there is no real question to be tried” – where a security for costs order would stifle the litigation - matter listed for Trial and wife’s application for summary dismissal adjourned to directions date pending husband’s compliance with further orders of the Court – section 102NA of the Act enlivened
COSTS – where wife seeks costs thrown away against the husband – where husband has failed to comply with orders of the Court for the filing of responding documents – husband is ordered to pay the wife’s costs by the next directions date
Legislation: Family Law Act 1975 (Cth) Pts V, XI, XV, ss 45A, 102NA, 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 10.09, 10.27, 12.02, 12.06
Cases cited: Aldred and Aldred; Westpac Banking Corp (1986) 10 Fam LR 1083
Arthurman & Arthurman [2019] FamCAFC 214
Bigg & Suzi [1998] FamCA 14; (1998) FLC 92-799.
Brown & Brown & Ors [1991] FamCA 75, (1991) FLC 92-265, 15 Fam LR 69
Buckley v Bennell Design & Constructions Pty Ltd (1974) 1 ACLR 301.
Cameron’s Unit Services Pty Ltd & Or v Kevin R Whelpton & Associates Pty Ltd & Or (1986) 13 FCR 46; 11 ACLR 43.
Evans & Rochford [2003] FamCA 314, (2003) FLC 93-147, (2003) 30 Fam LR 336
PBF as Child Representative for AF (Legal Aid Commission of Tasmania) & TRF & LKL [2005] FamCA 158; (2005) 33 Fam LR 123
I & I (No.2) [1995] FamCA 80, (1995) FLC 92-625, 22 Fam LR 557
Jones & Jones [2001] FamCA 460, (2001) FLC 93-080, 27 Fam LR 632
Karlsson & Karlsson [2020] FamCAFC 207
Limousin v Limousin (Security for Costs) [2007] FamCA 1179
Luadaka & Luadaka [1998] FamCA 1520, (1998) FLC 92-830, 24 Fam LR 340
Lynnebry Pty Ltd v Farquhar Enterprises Pty Ltd (1977) 3 ACLR 133.
Lysaght Building Solutions Proprietary Limited (t/as Highline Commercial Construction) v Blanalko Pty Ltd (2013) 42 VR 27
Medlon & Medlon (No 6) (Indemnity Costs) [2015] FamCAFC 157
Moorcroft & Moorcroft [2018] FamCAFC 253
Pelerman& Pelerman [2000] FamCA 881
Taylor v Taylor (1979) 25 ALR 418
Wood & Muller [2020] FamCA 162
Division: Division 2 Family Law Number of paragraphs: 92 Date of hearing: 29 March 2022 Place: Adelaide Counsel for the Applicant: Ms Lewis Solicitor for the Applicant: Howe Jenkin The Respondent: Appeared in person ORDERS
ADC 2721 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS COSIC
Applicant
AND: MR COSIC
Respondent
ORDER MADE BY:
JUDGE DICKSON
DATE OF ORDER:
22 APRIL 2022
UPON NOTING THAT:
A.That in the event that any of these Orders are not complied with, the Court shall relist the matter at short notice to the parties and give consideration to vacating the Trial.
B.The Court shall expect the parties to comply with r 12.06 of the Federal Circuit and Family Courts of Australia Rules (Family Law) 2021 (Cth) prior to the hearing dates set out in the within order.
C.That if in any proceedings there are allegations of family violence and the provisions of section 102NA of the Family Law Act 1975 apply (see attached Family Violence Information Sheet), any unrepresented party will not be permitted to personally cross-examine the other party/parties.
D.That affected unrepresented parties may apply to the Commonwealth Family Violence and Cross-Examination of Parties Scheme (“the Scheme”) for representation but any such Application must be made at least 12 weeks prior to the Final Hearing.
E.That further information about the legislation and the Scheme can be found at Part 4 of the attached Family Violence Information Sheet.
F.If any practitioner acting for a party to whom section 102NA applies should cease to act for the party, then the practitioner is directed to contact her Honour’s chambers as soon as possible to advise of the need for an urgent directions hearings.
G.That the husband has been convicted of or charged with an offence involving violence, or a threat of violence to the other party and accordingly section 102NA of the Family Law Act 1975 applies:
(a)Judge Dickson has this day advised the husband that he will not be permitted to personally cross examine the other party at Trial;
(b)That the cross examination must be conducted by a legal practitioner; and
(c)The husband has been advised by Judge Dickson to apply to the Legal Services Commission of South Australia for a grant of funding pursuant to the Family Violence and Cross Examination of Parties Scheme.
H.That in the event that either party wishes to rely on documents produced to the Court pursuant to Subpoena or a section 69ZW Order, then all previous Orders relating to the filing of any such material relied upon shall apply.
THE COURT ORDERS THAT:
1.Paragraphs 2 and 3 of the wife’s Application in a Proceeding filed 25 November 2021 be dismissed.
2.Paragraph 1 of the wife’s Application in a Proceeding filed 25 November 2021 be adjourned to 8 July 2022 at 9:30am.
3.By way of costs thrown away, the husband do within 60 days of the date hereof pay to the Trust Account of Howe Jenkin for and on behalf of the wife, the sum of ONE THOUSAND TWO HUNDRED DOLLARS AND ZERO CENTS ($1,200.00).
4.The matter be listed for Trial before Judge Dickson on
10*20 October 2022 at 10:00am NOTING 2 days allowed, with such trial to be conducted on a face-to-face basis in accordance with the Courts protocols.5.No later than twenty-eight (28) days prior to the Trial date, the Applicant pay the cost of the Setting down fee and any Daily Hearing fee as required, or obtain a Remission Certificate in respect thereof.
6.The proceedings be adjourned for Trial management and directions to 8 July 2022 at 9:30am.
Pursuant to paragraph 10.13(1)(h) of the Federal Circuit & Family Court of Australia Rules (Family Law) Rules 2021 (Cth), this Order is amended on 29 April 2022.
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 a pseudonym Cosic & Cosic has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
Amended Pursuant to r 10.14(b) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 on 29 April 2022JUDGE DICKSON:
INTRODUCTION
This matter comes before the Court by way of an Application in a Proceeding filed by the applicant wife on 25 November 2021 (‘the said Application’).
Notwithstanding orders having been made for the husband to file a Response to an Application in a Proceeding, he had not done so by the date of hearing. The husband confirmed in open Court that he opposed the orders sought by the wife in their entirety.
These are the Court’s reasons arising from the hearing which took place on 29 March 2022 on the wife’s Application in a Proceeding filed on 25 November 2021.
BACKGROUND
The husband was born in 1963 and is now 58 years of age. The wife was born in 1968 and is now 54 years of age.
The parties commenced cohabitation in or about mid 1994 and were married in 1994. The parties separated for the final time in January 2018. It was a long relationship of 24 years duration.
The parties had three children during their marriage, all of whom have now reached the age of majority.
In 2014, the husband and their eldest son Mr B set up a business known as “C Pty Ltd”.
In 2016, the parties transferred the former matrimonial home situate at D Street, Town E (‘the D Street, Town E property’) from joint names into the sole name of the wife. It appears to be an agreed position that the transfer of the D Street, Town E property into the wife’s sole name was for the purposes of “asset protection”.
In or about mid 2017, the husband took over as the sole director of the business C Pty Ltd. The circumstances surrounding the husband becoming the sole director of the said business are likely to be contentious.
In June 2017, the parties separated under the same roof.
In October 2017, the parties reconciled.
In January 2018, the parties separated for the final time and the husband vacated the D Street, Town E property before moving into his own accommodation.
A significant factual dispute between the parties is whether or not the parties entered into negotiations to resolve their property settlement informally following separation. The wife asserts that following on from informal negotiations between the parties it was agreed that:
(1)The wife would retain the D Street, Town E property and all marital debt;
(2)The husband would retain the business “C Pty Ltd” and all liabilities; and
(3)That there be no adjustment of the parties’ superannuation entitlements.
The alleged informal agreement was never recorded in writing.
The wife has put before the Court as part of Annexure 2 to the wife’s affidavit filed 19 August 2020 (‘the said August affidavit’), a copy of a letter from the husband’s former solicitors F Law Firm dated 26 June 2017 to the husband, confirming his instructions to resolve the dispute on the basis of the wife retaining the sale proceeds of the D Street, Town E property, her motor vehicle and indemnifying the husband in relation to credit card liabilities. The said letter goes on to record that the husband proposed retaining the business “C Pty Ltd” and that each party retain their own superannuation entitlements. The letter does no more than to record the husband’s instructions to his then solicitors.
The said August affidavit also annexes a letter dated 14 August 2018 from the husband’s then solicitors G Law Firm to the wife. This letter records the instructions provided by the husband that property settlement had largely been effected, save and except that the parties respective superannuation entitlements had not been dealt with as part of that settlement and further, that the husband sought to equalise their entitlements. There is no dispute that the wife’s superannuation entitlements are significantly higher than those of the husband.
The wife asserts that following on from the informal agreement as set out in paragraph 13 herein, she acted upon the agreement by selling the D Street, Town E property in October 2019. After payment of sale expenses and discharge of the existing mortgage, the wife received net proceeds of sale totalling approximately $151,367.00. The wife asserts that after discharge of various unsecured matrimonial liabilities, she retained approximately $51,000.00. From this amount a sum of $35,000.00 was paid to the wife’s new domestic partner Mr H (‘Mr H’). The sum of $35,000.00 was then utilised together with funds provided by Mr H to the purchase of a property at J Street, Suburb K (‘the J Street, Suburb K property’) in the sole name of Mr H.
The wife has not satisfactorily explained why the J Street, Suburb K property was registered in Mr H’s sole name despite her significant financial contribution. Given that the husband informed the Court at the hearing on 29 March 2022 that he does not seek to bring the wife’s interest in the J Street, Suburb K property to account in the Balance Sheet, ultimately it may not matter.
On 24 June 2020, the husband issued proceedings seeking final orders for property settlement. Whilst the husband has from time to time been represented by solicitors, at the time of filing his Initiating Application, the husband was unrepresented.
The final order sought by the husband in his Initiating Application filed 24 June 2020 is as follows:
A fair an (sic) equitable superannuation split due to the Respondent having retained and/or disposed of all physical and monetary assets.[1]
[1] See husband’s Initiating Application filed 24 June 2020.
By way of a Response to Initiating Application filed on 19 August 2020, the wife seeks the following final orders in her own right:
1.That the Motor Vehicle 1 be sold and the funds gained to pay out the loan from the sister in law with the husband retain (sic) residual funds.
2.That the wife retain the loan outstanding with CBA.
3.That the husband retain the business C Pty Ltd.
4.That there be no splitting order in relation to either parties superannuation.
5.Each party retain all other assets and liabilities in their sole name free from any claim by the other.
6.Costs of and incidental to this Response.[2]
[2] See wife’s Response to Initiating Application filed 19 August 2020.
On 25 November 2021, the wife filed an Application in a Proceeding seeking inter alia:
1.That the husbands’ Initiating Application filed on 24 June 2020 be summarily dismissed.
2.In the alternative to paragraph 1 hereof, that on or before a date to be fixed by the Court, the husband lodge with the Registry Manager in the Adelaide Registry, Federal Circuit and Family Court of Australia, the sum of $55,000 as security for costs of his application for settlement of property or alteration of interests in property pursuant to Part VIII of the Family Law Act 1975 (Cth).
3.That in the event that the husband does not lodge the security as provided in paragraph 2 hereof, then his application for settlement of property or alteration of interests in property stands dismissed.
4.That the husband do pay the wife’s costs of and incidental to this application.[3]
[3] See wife’s Application in a Proceeding filed 25 November 2021.
In addition, the wife made an oral application that the husband pay to her costs thrown away fixed in the sum of $1,200.00 for the wife’s appearances before the Court on 9 February 2022 and 22 February 2022 respectively.
All of the interim orders sought by wife are opposed by the husband, albeit orally and without having filed a formal Response to Application in a Proceeding as ordered by the Court.
LITIGATION HISTORY
The husband filed his Initiating Application for Final Orders on 24 June 2020. The matter is yet to be listed for Trial. The Court intends to remedy this situation so as to ensure that the parties are focused on resolving their dispute.
To date, the Court has made the following orders. On 24 February 2020, Registrar Brown ordered inter alia:
(a)That the parties and their representatives attend a Conciliation Conference on 16 November 2020;
(b)That within 21 days the parties provide mutual informal discovery of all documents in their respective possession or control;
(c)That any inspection arising from such discovery be completed no later than 14 days thereafter.
(d)That the parties appoint a jointly instructed single expert/licensed valuer to value any asset the value of which is in dispute at the joint and equitable expense of the parties in accordance with the Family Law Rules unless values of the assets have been agreed upon in writing on or before 30 September 2020.
(e)That any valuation obtained by the parties be filed no later than 14 days prior to the Conciliation Conference.
(f)That in the event that either party seeks a superannuation splitting order that a copy of the proposed splitting order be served on the Trustee of the superannuation fund at least 7 days prior to the Conciliation Conference.
(g)That an Affidavit be filed annexing proof of value and evidence of procedural fairness/letter confirming the Trustee of the superannuation fund has no objection to the orders being made.
On 3 December 2020 orders were made inter alia permitting the parties and their legal representatives to inspect and copy documents produced under subpoena directed to ANZ, L Bank and the Commonwealth Bank save and except for those marked confidential. The Court further ordered that within 28 days the parties do all things necessary for Company M to conduct the valuation of the business known as “C Pty Ltd” from the date of separation until the present with such valuation to be obtained at the joint and equal expense of the parties.
On 25 February 2021 orders were made by consent uplifting earlier affidavits filed by the parties and with a further direction made for the parties to file and serve one further affidavit in compliance with the Federal Circuit Court Rules. Further orders were made inter alia as follows:
(a)That as soon as practicable the husband file with the Australian Taxation Office his income tax returns for the Cosic Family Trust and himself personally and do supply a true and correct copy thereof to the wife’s solicitors;
(b)That within 7 days the husband do pay sufficient funds into the trust account of the wife’s solicitors to meet his half share of the business valuation;
(c)That paragraph 3 of the order made 3 December 2020 be varied so as to provide that within 7 days thereafter the parties do instruct Mr N to conduct a valuation of the husband’s business in lieu of Company M;
(d)That the husband do provide to the nominated valuer all documents and information requested by the valuer and or in the event that the husband has accountants acting for him he shall forthwith advise those accountants to supply to the valuer any documents requested by the valuer; and
(e)That in the event that the husband does not sign the letter of instruction to the nominated valuer within 48 hours of presentation to him then a Registrar of the Court be authorised to sign on his behalf.
On 8 June 2021 the matter was referred to the next available Trial callover list with an estimate of one day for final hearing.
On 2 August 2021, the Court made orders inter alia that:
(a)The parties and their legal representatives attend a Conciliation Conference on 27 September 2021; and
(b)The parties file an Outline of Case documents 7 days prior to the Conciliation Conference.
On 26 November 2021, the Court ordered:
1.That no later than 4.00 pm on 24 December 2021 the husband file and serve:
a.A Response to an Application in a Proceeding filed by the wife on 24 November 2021 setting out with precision the interim orders sought; and
b.A supporting affidavit of no more than 10 pages in length with no more than 5 annexures.[4]
[4] See order of Judge Dickson dated 26 November 2021.
The matter was adjourned to a date and time to be advised for further case management directions.
On 9 February 2022 the said Application in a Proceeding filed by the wife came before me on the first occasion for directions. On that occasion, the Court made the following notations and orders:
A. That the husband appears unrepresented this morning and informs the Court that he has complied with paragraph 1 of the order made by Judicial Registrar Glendenning on 26 November 2021.
B. The Court portal does not evidence any answering documents having been filed by husband as he asserts to the Court and the wife’s counsel advises that no answering documents had been received by her instructing solicitors.
C. The husband asserts that the answering documents were forwarded to the wife’s solicitors by way of email.
D. The Court intends on the next occasion to address interim issues and Trial management, including the application of section 102NA of the Family Law Act 1975, the length of Trial and the number of witnesses that each party intend to call.[5]
[5] See order of Judge Dickson dated 9 February 2022.
The wife’s Application in a Case was adjourned to 22 February 2022 for directions with further orders made directing the husband to file an Affidavit annexing confirmation of the filing of his earlier documents and serving the wife’s solicitors forthwith with a copy of the documents that he informed the Court had been filed in compliance with the orders on 26 November 2021. The wife’s application for costs fixed in the sum of $550 inclusive of GST were adjourned to 22 February 2022 at 9:30 am.
On 22 February 2022 the matter again came before the Court. By that date the husband had yet to file answering documents notwithstanding his assertion to the Court that he had done so. On that occasion, notations were made in the following terms:
A. That the Court Portal does not show any evidence of answering documents having been filed by the husband in accordance with paragraph 1 of the Order made by Judicial Registrar Glendenning on 26 November 2021, nor compliance with paragraph 2 of the Order made 9 February 2022;
B. The wife’s counsel informs the Court that her instructing solicitor had received an Affidavit purportedly to be relied upon by the husband by way of email on 19 February 2022;
C. The wife’s counsel seeks that the wife’s Application in a Proceeding filed 25 November 2021 be listed for argument and for the matter to proceed by way of Trial directions on the next occasion. [6]
[6] See order of Judge Dickson dated 22 February 2022.
The Court ordered on that occasion:
(1)That the wife’s Application in a proceeding and Trial directions, including the application of section 102NA of the Family Law Act be listed for argument on 29 March 2022 at 10:00 am.
(2)That no later than 18 March 2022 the parties file and serve a short Summary of Argument together with any Lists of Authority.
(3)That paragraph 4 of the orders made on 9 February 2022 and the wife’s application for costs fixed in the sum of $550 of the attendance that day be adjourned to the date of hearing.
HEARING ON 29 MARCH 2022
At the hearing on 29 March 2022 the wife relied upon the following documents
(1)Application in a Proceeding filed 25 November 2021;
(2)Affidavit filed 24 November 2021;
(3)Summary of Argument filed 22 March 2022; and
(4)A Costs Notice provided pursuant to Rule 12.06(2) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (‘the Rules’) and filed on 22 March 2022.
The husband relied upon his Affidavit filed on 24 March 2022 which contained a Summary of Argument. The husband foreshadowed orally an intention to amend his Initiating Application to seek that the net proceeds of the D Street, Town E property be “added back” and available for division at Trial.
The Court has however proceeded to determine these interim proceedings on the basis of the final orders sought by each of the parties in their respective final Applications filed to date.
POSITION OF THE APPLICANT WIFE
The wife argues that there is a history of non-compliance of Court orders by the husband and in particular the orders as they related to setting down the wife’s Application in a Proceeding filed on 24 November 2021. The wife asserts correctly that the husband failed to comply with the orders made by the Court for the filing of his answering documents, being paragraph 1 of the order made 26 November 2021 and paragraph 2 of the order made on 9 February 2022.
The wife contends in summary that:
(a)The parties have very little by way of tangible assets. Paragraph 7 of the wife’s affidavit filed 24 November 2021 (‘the wife’s affidavit in support’) deposes to the husband having net assets valued at approximately $42,440.00 and the wife having net assets valued at approximately $17,000.00. In addition, the wife retains superannuation entitlements totalling approximately $176,232.00 as at 30 June 2021 and the husband having $47,511.00. as at 30 June 2020;
(b)Paragraph 8 of the wife’s affidavit in support contends that the primary issue in dispute is how the wife applied funds received by her from the sale of the D Street, Town E property as set out in paragraph 17 herein;
(c)The wife argues that the husband’s application is “without merit” because the husband is in effect seeking to add back funds that have been spent appropriately and pursuant to the parties’ informal agreement and in any event, those funds are now gone;
(d)In paragraph 30 of the wife’s affidavit in support, she argues that even though the husband has from time to time had the benefit of legal advice, “he has never particularised his property settlement claim”;
(e)Furthermore, the wife submits that the husband has filed affidavits which contained offensive and irrelevant material, has behaved deviously by liquidating the business “C Pty Ltd” after orders had been made by the Court for a valuation to be obtained and has not been transparent in his disclosure of financial documents requiring the wife to issue a subpoena to the Commonwealth Bank;
(f)The wife deposes that on 29 April 2021, she obtained an interim Intervention Order against the husband and that the husband has now been charged with sexual assault against the wife as a result of an event which occurred on 16 July 2019. The Intervention Order was granted as a result of the sexual assault charge and also what the wife articulates in paragraph 37 of the said Affidavit as being a “campaign of harassment and intimidation against me since separation…”
WIFE’S APPLICATION FOR SUMMARY DISMISSAL
The wife relies upon section 45A(1) of the Family Law Act 1975 (Cth) (as amended) (‘the Act’) and rule 10.09 of the Rules to summarily dismiss the husband’s Application, which the wife submits can be seen as “frivolous, vexatious or an abuse of process” or has “no reasonable likelihood of success”.
The wife submits that the husband’s final orders as sought in his Initiating Application wherein the husband seeks “a fair and equitable superannuation split due to the respondent having retained and/or disposed of all physical and monetary assets” has “no reasonable likelihood of success” and is “unenforceable and quite simply meaningless” (paragraph 8 of the wife’s Summary of Argument).
In paragraphs 10 and 12 of the said Summary of Argument the wife submits
That the husband has repeatedly failed to comply with orders made by the Court in respect of determining the wife’s Application in a Proceeding”
and that
The wife does assert that the husband’s Application filed is vexatious and an abuse of process
The wife asserts that the parties had implemented an informal agreement to divide their assets which the husband now resiles from.
More significantly the wife submits that the husband has
Intentionally acted in a manner to frustrate orders made by this Court, the most significant example being placing his business into liquidation immediately following an order for his business to be valued.
It is strongly argued that these proceedings are an extension of his campaign of harassment. Furthermore, whilst the husband incurs no expense, he would understand that with each hearing he imposes considerable costs upon the wife.
WIFE’S APPLICATION FOR SECURITY FOR COSTS
In her Summary of Argument the wife submits that she has incurred considerable costs associated with the proceedings and relies upon the Rule 12.06 Costs Notice provided to the Court at argument. To date, the wife has paid her solicitors $11,193.00 and has outstanding solicitor costs totalling $19,117.52. The further costs of proceedings are estimated to be in the vicinity of $35,000.00-$40,000.00.
The wife submits that section 117(2) of the Act and rule 12.02 of the Rules permit the wife to bring an application for security of costs. In considering her application for security for costs, the wife submits that the Court must consider the factors set out in section 117(2A) of the Act namely:
(1)The parties’ financial circumstances;
(2)The conduct of the parties in the proceedings, including in respect of discovery and pleadings; and
(3)Any other matters that the Court considers relevant which would include considerations of prospects of success, if the claim is bona fide and not trivial, vexatious or a sham and if it would be difficult in enforcing an order for costs.
The submissions in support of the wife’s alternative application for security for costs are summarised in paragraphs 15 to 26 of the Summary of Argument filed 22 March 2022. In short, the wife submits inter alia that:
(1)She has incurred considerable costs associated with these proceedings as set out in the Rule 12.06 Costs Notices;
(2)The husband has no assets in his name;
(3)The Court could determine even at this stage of the proceedings that the husband has no capacity to meet any order for costs;
(4)The husband has failed to meet his obligations with respect to discovery;
(5)The husband’s affidavits have been “scandalous, vexations and frivolous” resulting in their uplifting by the Court;
(6)The husband has failed to put any proper evidence before the Court and “appropriately plead his case”; and
(7)The husband has not filed a Response to an Application in a Proceeding and therefore “there is no proper material put before the Court which would lead the Court to form the view that the husband will conduct the proceedings appropriately”.
It was submitted that the husband, being self represented, has failed to prepare his case properly and that it was not equitable to the wife that she bear the burden of the husband’s incompetence particularly when the Court contemplates that the application for property settlement has “little prospect of success”.
The wife submits that the husband is impecunious and would have no resources available to meet any costs order at Trial. The wife asserts that the husband has failed to meet his obligations with respect to discovery[7] and that the wife was required to issue a subpoena to obtain the husband’s discovered documents.
[7] See wife’s Affidavit filed 24 November 2021 at [34].
The wife submits in paragraph 21 of her Summary of Argument that inter alia:
The Court is able to proceed on the basis that the husband has failed to put any proper evidence before the Court and appropriately plead his case. The husband has been given ample opportunity to put evidence before the Court in response to the allegations made by the wife in her Affidavit on 24 November 2021. He has failed to do so. The husband has not filed a Response to the orders the wife seeks in her Application in a Proceeding. The Court should proceed on the basis that there is no proper material put before the Court which would lead to the Court to form the view that the husband will conduct the proceedings appropriately.
The wife on that basis seeks an order for security for costs in the sum of $55,000.00.
WIFE’S ORAL APPLICATION FOR COSTS THROWN AWAY FIXED IN THE SUM OF $1,200
At the hearing on 29 March 2022 the wife’s counsel sought costs thrown away fixed in the sum of $1,200.00 (‘the sum’). The sum arises pursuant to orders made by the Court at paragraph 4 of the orders of 9 February 2022 and paragraph 4 of the orders of 22 February 2022 and as a consequence of the husband’s failure to comply with orders of the Court made to ensure all material was before the Court prior to argument.
THE HUSBAND’S POSITION
On 24 March 2022 the husband filed an affidavit that he sought to rely upon at the hearing on 29 March 2022 (‘the husband’s affidavit in support’).
No formal objection was taken by the wife to the Court referring to the husband’s affidavit in support, despite it being filed outside of the court ordered filing dates. Had objection been taken, I should indicate that I would have allowed the husband to rely on the affidavit in any event to ensure that the hearing proceeded without further delay.
The husband’s affidavit in support consists of 2 paragraphs. Paragraph 1 refers to an attached “Summary of Argument” and paragraph 2 sought “a fair and equitable split of the marital assets.”
The husbands position as deposed in the Summary of Argument can be summarised as follows;
(a)That the wife had failed to provide “any proof of assets, income and superannuation details” and when the wife’s bank statements were provided they were “severely redacted to the point that they were useless and no superannuation details”.
(b)That the wife had engaged in unspecified “cynical and frivolous expenditure” which was said by the husband to be proven once “bank account details had been subpoenaed”.
(c)That the business had been placed into liquidation “due entirely to obligations which fall on a company Director and had nothing to do with these proceedings”.
(d)That the husband had been seeking a “fair and equitable division of the marital assets and do not accept (sic) that the Respondent was entitled to keep and spend those assets.”
(e)That the husband was prioritising “my recourses ( sic ) to defend accusations in another court of a criminal matter.”
(f)That the “drawn out proceedings and accusations have taken a toll on my mental and physical health, I am receiving help for clinical depression.”
APPLICABLE LEGAL PRINCIPLES
Summary Dismissal
The power to summarily dismiss is contained in Section 45A(1) of the Act. Section 45A(1) of the Act states as follows:
The Court may make a decree for one party against another in relation to the whole or any part of proceedings if:
(a) the first party is prosecuting a proceedings or that part of the proceedings; and
(b) the Court is satisfied that the other party has no reasonable prospect of successfully defending the proceedings or part of the proceedings.[8]
[8] Family Law Act 1975 (Cth) s 45A(1).
The power of the Court to summarily dismiss of its own motion an application listed before it which falls within the parameters of section 45A of the Act has long been recognised by this Court. In the decision of Aldred & Aldred; Westpac Banking Corporation[9] Justice Nygh held:
It is now well established that this Court, as a superior Court of record, has an inherent jurisdiction.[10]
[9] Aldred & Aldred; Westpac Banking Corporation [1986] 10 FamLR 1083.
[10] Ibid 1084.
His Honour then goes on to refer to the well-known decision of Taylor v Taylor[11] at 423 per Gibbs J and at 431 per Mason J namely:
That inherent jurisdiction allows the Court to exercise control over proceedings instituted in it, and the extent of that jurisdiction is not limited by statutory provisions such as are found in section 118(1).[12]
[11] Taylor v Taylor (1979) 25 ALR 418.
[12] Aldred and Aldred; Westpac Banking Corp (1986) 10 Fam LR 1083, 1084.
Further, His Honour stated that:
The inherent jurisdiction of the Court is not confined to the dismissal of frivolous and vexatious proceedings in the strictest sense, but extends to the dismissal of actions which “must fail or which the plaintiff cannot prove and which is without solid basis”; Halsbury’s Laws of England, fourth edition, volume 37, Practice and Procedure, paragraph 435, citing Lawrance v Lord Norreys [1880] 15 AC 210 at page 219, per Lord Herschell.[13]
[13] Ibid.
In short, this Court has the power to summarily dismiss an application on its own motion.
Rule 10.09 of the Rules provides that an application for summary orders may be sought by a party applying:
… after a response has been filed, if the party claims in relation to the application or response that:
(a) the court has no jurisdiction; or
(b) the other party has no legal capacity to apply for the orders sought; or
(c) it is frivolous, vexatious or an abuse of process; or
(d) there is no reasonable likelihood of success.[14]
[14] Federal Circuit and Family Court of Australia Rules 2021 (Cth), r 10.09.
The Full Court of the Family Court (as it then was) helpfully summarised these principles as set out in Bigg & Suzi[15] in the decision of Pelerman& Pelerman[16] as follows:
[15] Bigg & Suzi [1998] FamCA 14, (1998) FLC 92-799.
[16] Pelerman& Pelerman [2000] FamCA 881.
(a)The power for summary dismissal is a discretionary one.
(b)Relief “is rarely and sparingly provided”.
(c)The parties seeking summary dismissal must show that the application is “doomed to fail” or has been otherwise described “that the opponent lacks a reasonable cause of action or is advancing a claim that is clearly frivolous or vexatious”.
(d)A weak case or one that is unlikely to succeed is not “sufficient to warrant termination”.
(e)“If there is a serious legal question to be determined, it should ordinarily be determined at trial.”
(f)“If, notwithstanding the defects of pleadings, it appears that a party may have a reasonable cause of action which it has failed to put in proper form, a Court will ordinarily allow that party to reframe its pleadings”.[17]
(original emphasis)
[17] Ibid [46].
In considering whether an application has no reasonable prospect of success, the Full Court in Arthurman[18] cited with approval the decision of the Victorian Court of Appeal in Lysaght Building Solutions Proprietary Limited (t/as Highline Commercial Construction) v Blanalko Pty Ltd (2013) 42 VR 27 and noted that:
The test asks whether the application has a “real”, as opposed to a “fanciful”, chance of success. Whilst it must be applied by reference to its own language, the test is nonetheless broader than “hopeless” or “bound to fail”. It must also be borne in mind that “the power to terminate proceedings summarily should be exercised with caution, and thus should not be exercised unless it is clear that there is no real question to be tried” (Lysaght at [35]).[19]
[18] Arthurman & Arthurman [2019] FamCAFC 214.
[19] Ibid at [18].
More recently, in the decision of Karlsson & Karlsson,[20] the Full Court, sitting by way of a single-instance justice, namely Ainslie-Wallace J, delivered a decision on 25 August 2020 which sets out the law as it applies to summary dismissal applications as follows:
[20] Karlsson & Karlsson [2020] FamCAFC 207.
Her Honour succinctly and carefully set out the principles relevant to summary dismissal (at [33]–[34]). Given however, the husband’s challenges, it is as well to set them out here.
The power to summarily dismiss an action must be rarely and sparingly used (see Pelerman v Pelerman (2000) FLC 93-037). The Full Court discussed the power of the court to summarily dismiss proceedings in Bigg v Suzi (1998) FLC 92-799 at 84,974–84,975 and adopted the articulation of the principles of Kirby J in Lindon v The Commonwealth (No 2) (1996) 70 ALJR 541 (“Lindon”) at 544–545, which may conveniently be summarised thus:
• it is a serious matter to deprive a party of access to the courts and the power to do so should be rarely and sparingly used;
• the party seeking summary dismissal must show that it is clear on the face of the other party’s documents that the other party lacks a reasonable cause of action or is advancing a claim that is clearly frivolous or vexatious;
• that a case appears weak and unlikely to succeed is of itself not sufficient to satisfy summary dismissal;
• if there is a serious legal question to be tried, then it should ordinarily be determined at a trial of the issues;
• where, notwithstanding a defect in the pleadings, if it appears that a party may have a reasonable cause of action which has not been put in proper form, a court will ordinarily allow that party to reframe the pleadings; and
• the “guiding principle” is doing what is “just”. In Lindon, Kirby J said at [545]:
If it is clear that proceedings within the concept of the pleading under scrutiny are doomed to fail, the Court should dismiss the action to protect the defendant from being further troubled, to save the plaintiff from further costs and disappointment and to relieve the Court of the burden of further wasted time which could be devoted to the determination of claims which have legal merit.
Her Honour proceeded to consider the question of summary dismissal pursuant to s 45A of the Act and noted that the court may order summary dismissal where it is satisfied that the claim has “no reasonable likelihood of success”.
Indeed, recent authority has preferred to apply the test of “no reasonable likelihood of success” rather than “doomed to fail” (see Spencer v Commonwealth of Australia (2010) 241 CLR 118 where the High Court discussed the “bound to fail” test and Bretton & Bondai [2013] FamCAFC 168 at [59]–[60]).
That is not to say that the power should not, as Lindon said, be exercised sparingly and rarely, but that it will be exercised where it is clear that there is no real question to be tried (see Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Construction) v Blanalko Pty Ltd (2013) 42 VR 27 at [35]).[21]
[21] Ibid [38]-[41].
In the decision of Karlsson, Ainslie-Wallace J refers also to the decisions that I have just outlined above, particularly the decision of Pelerman (supra), the decision of Lindon v The Commonwealth (supra) and also the decision of Bigg & Suzi.[22] Her Honour also refers to a recent authority which has:
… preferred to apply the test of “no reasonable likelihood of success” rather than “doomed to fail” (see Spencer v Commonwealth of Australia [2010] HCA 28, where the High Court discussed the “bound to fail” test and Bretton & Bondai [2013] FamCAFC 168 at [59]-[60]).[23]
[22] Bigg & Suzi [1998] FamCA 14, (1998) FLC 92-799.
[23] Karlsson & Karlsson [2020] FamCAFC 207 at [40].
In paragraph 41, Ainslie-Wallace J stated as follows:
That is not to say that the power should not, as Lindon said, be exercised sparingly and rarely, but that it will be exercised where it is clear that there is no real question to be tried (see Lysaght Building Solutions Pty Ltd – supra).[24]
[24] Ibid at [41].
Security for costs
The general rule as set out in section 117 of the Act prescribes that parties to proceedings under the Act bear their own costs. This general power is subject to the power of the Court to order costs and security for costs as set out in section 117(2) of the Act.
Section 117(2) of the Act states:
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), (5) and (6) and the applicable Rules of Court, make such order as to costs and security for costs whether by interlocutory order or otherwise as the Court considers just.[25]
[25] Family Law Act 1975 (Cth) s 117(2).
Section 117(2A) of the Act sets out the factors which the Court must consider in determining an order for costs. This section provides:
(a) the financial circumstances of each of the parties to the proceedings;
(b) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g) such other matters as the court considers relevant.[26]
[26] Ibid s 117(2A)(a)-(g).
The Court must assess and weigh all prescribed factors in a given case.[27]
[27] I & I (No.2) [1995] FamCA 80, (1995) FLC 92-625, 22 Fam LR 557 at 3.
It is not necessary that all factors need to be satisfied to justify an order for costs.[28]
[28] PBF as Child Representative for AF (Legal Aid Commission of Tasmania) & TRF & LKL [2005] FamCA 158; (2005) 33 Fam LR 123 at [41].
Furthermore, no one sub paragraph has priority over the others.[29]
[29] Medlon & Medlon (No 6) (Indemnity Costs) [2015] FamCAFC 157 at [24].
Rule 12.02 of the Rules provides:
(1) A respondent may apply for an order that the applicant in the proceeding give security for the respondent’s costs.
(2) In deciding whether to make an order, the court may consider any of the following matters:
(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.
(3) In subrule (1):
respondent includes an applicant who has filed a reply because orders in a new cause of action were sought in the response.[30]
[30] Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 12.02.
The relevant factors to consider when assessing an application for security for costs have been discussed in the decision of Evans & Rochford[31] with reference to decisions to Jones[32] and Luadaka.[33] In Luadaka, the Full Court (Ellis, Finn and O’Ryan JJ) said:
[31] Evans & Rochford [2003] FamCA 314, (2003) FLC 93-147, (2003) 30 Fam LR 336.
[32] Jones & Jones [2001] FamCA 460, (2001) FLC 93-080, 27 Fam LR 632.
[33] Luadaka & Luadaka [1998] FamCA 1520; (1998) FLC 92-830; 24 Fam LR 340.
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:
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 & Alexander (supra) and Gee J in B & 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.
The prospects of success is a relevant matter to take into consideration: Parkinson & Co Ltd v Triplan 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.
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.
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 Statewide Developments Pty Ltd (1987) 5 ACLC 480.
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.
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.
Other relevant matters may include any difficulties of enforcing an order for costs and the amount of costs to be incurred.
We do not suggest that the above matters are exhaustive of what may be taken into account. However, such matters may be relevant to the exercise of discretion.[34]
[34] Ibid [62]-[63].
In Brown & Brown & Ors[35] Butler J described orders for security for costs as follows:
Costs security orders prevent abuse of Court process by inter alia preventing impecunious persons from litigating without responsibility…[36]
[35] Brown & Brown & Ors [1991] FamCA 75, (1991) FLC 92-265, 15 Fam LR 69.
[36] Ibid [78,778] (per Butler J).
Generally orders are made where the defendant is an unwilling participant in the litigation and should not be prejudiced by the plaintiff’s lack of funds.[37] But the Court must carefully balance this consideration against the possibility that the plaintiff may be shut out or unfairly dealt with if security was ordered.[38]
[37] See Buckley v Bennell Design & Constructions Pty Ltd (1974) 1 ACLR 301.
[38] See Cameron’s Unit Services Pty Ltd & Or v Kevin R Whelpton & Associates Pty Ltd & Or (1986) 13 FCR 46; 11 ACLR 43.
It is of essential importance to consider as far as possible whether the plaintiff’s shortage of funds has been brought about as a consequence of the defendant’s conduct of which the plaintiff complains. If so, it would be unfair to require the plaintiff to provide security for the defendant’s costs.[39]
[39] See Lynnebry Pty Ltd v Farquhar Enterprises Pty Ltd (1977) 3 ACLR 133.
An order for security for costs does not carry with it any inference that an order for costs will ultimately be made. Its purpose “is simply to ensure that in the event that a costs order is made difficulties in enforcing such an order will be alleviated”.[40]
[40] See Limousin v Limousin (Security for Costs) [2007] FamCA 1179 at [19].
The decision as to an order for costs is discretionary both as to whether to order security or such amount to be secured.
CONCLUSION
I am not satisfied on the material available to the Court that is an appropriate exercise of my discretion to make the orders as sought by the wife in her Application in a Proceeding at this stage of the proceedings.
The final orders sought by the husband are clumsy and not in a wording that would result in a split of the parties’ superannuation entitlements. However, the husband is unrepresented. Neither the wife’s counsel nor the husband opposed the Court making an order under section 102NA of the Act. By virtue of this order, the husband should now be legally represented at Trial.
In due course, the Court will make orders for the filing of Amended Applications in readiness for the final hearing. Despite the “defects of pleadings”, it could not be said at this stage of the litigation that the husband has “no reasonable cause of action” as it relates to a superannuation splitting order at Trial, or that “there is no real question to be tried”. The husband’s claim is not hopeless or vexatious. There is a significant factual dispute over the existence of an informal property agreement post separation and it should be noted that an informal property agreement would not, in any event, bind the Court.
The husband could not meet a cost order as sought by the wife for security for costs. I am satisfied that an order for costs as sought would stifle the litigation.
I am satisfied given the allegations made by the wife which resulted in an Intervention Order being made against the husband and a charge of sexual assault, that the mandatory requirements of section 102NA of the Act are enlivened in this matter.
Accordingly, I will dismiss the wife’s application for security for costs, but will adjourn the wife’s application for summary dismissal to the Trial management date. The husband should understand that the Court expects strict compliance with the orders made this day (including as to costs) and failure to do so may result in the wife seeking to re-agitate this issue pursuant to rule 10.27 of the Rules, which provides as follows:
(1) If an applicant is in default, the court may order that:
(a) the proceeding be stayed or dismissed as to the whole or any part of the relief claimed by the applicant; or
(b) a step in the proceeding be taken within the time limited in the order; or
(c) if the applicant does not take a step in the time referred to in paragraph (b)—the proceeding be stayed or dismissed, as to the whole or any part of the relief claimed by the applicant.[41]
[41] Federal Circuit and Family Court of Australia Rules 2021 (Cth) r 10.27.
The comments made by the Full Court in the matter of Moorcroft[42] are of relevance in this matter:
Aside from the wife’s interests, the broader public interest is served by courts ensuring that curial orders are duly observed. If breached orders are left unenforced, public confidence in the courts’ capacity to quell litigious disputes is undermined. The disobedience of orders almost inevitably involves, first, an innocent party incurring more cost and inconvenience to enforce the orders against the defaulting party, and second, the diversion of resources by the courts from other deserving disputes to entertain the enforcement applications. Litigants should not expect that the cost of their recalcitrance will be borne by the community. Courts are obliged to spend resources fairly and efficiently, which obligation may sometimes transcend the interests of parties to the litigation. The resolution of litigation serves the public as a whole, not merely the parties to the proceedings (see Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at 189-190, 211-215, 217).[43]
[42] Moorcroft & Moorcroft [2018] FamCAFC 253.
[43] Ibid at [37].
If however the husband has complied with the orders made this day, then the balance of the wife’s interim application will be dismissed.
In relation to the oral application for costs thrown away, in my view, and bringing to account section 117 of the Act, the wife is entitled to costs due to the husband’s failure to comply with orders of the Court to file answering documents. The husband is employed. His excuses to the Court as to the absence of his answering documents are not accepted. However, I will allow the husband 60 days to pay this sum with the Court’s expectation that it will be paid by the date of the next directions hearing.
For all of the above reasons, I made the orders as set out at the commencement of this Judgment.
I certify that the preceding ninety-two (92) numbered paragraphs are a true copy of
the Reasons for Judgment of Judge Dickson.Associate:
Dated: 29 April 2022
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