Evans v Rochford
[2003] FamCA 314
•2 May 2003
[2003] FamCA 314
JFEVANS
FAMILY LAW ACT 1975
IN THE FULL COURT OF
THE FAMILY COURT OF AUSTRALIA
AT SYDNEY Appeal No. ALE 11 of 2001
File No. SY 2123 of 2001
IN THE MATTER OF:
BEVERLEY DOROTHY EVANS
Applicant/Appellant Wife
- and -
BRIAN JOHN ALBERT ROCHFORD
Respondent Husband
REASONS FOR JUDGMENT
BEFORE: Finn, Holden and Barlow JJ
HEARD: 8 April 2002
FURTHER WRITTEN
SUBMISSIONS FILED: 12 June 2002 (by the wife)
1 July 2002 (by the husband)
8 July 2002 (by the wife)
JUDGMENT: 2 May 2003
APPEARANCES:
Mr Hume, Solicitor, of Philip K Coster & Co., 623 Military Road, MOSMAN NSW 2088, appeared on behalf of the Applicant/Appellant Wife
Mr Richardson of Senior Counsel (instructed by Newnhams, Solicitors, 7/122 Castlereagh Street, SYDNEY NSW 2000) appeared on behalf of the Respondent Husband.
MATTER: EVANS and ROCHFORD
NUMBER: ALE 11 of 2001 (SY 2123 of 2001)
CORAM: Finn, Holden and Barlow JJ.
DATE OF HEARING: 8 April 2002
FURTHER WRITTEN
SUBMISSIONS FILED: 12 June 2002 (by the wife)
1 July 2002 (by the husband)
8 July 2002 (by the wife)
JUDGMENT: 2 May 2003
CATCHWORDS: SECURITY FOR COSTS – REVIEW OF DECISION OF JUDICIAL REGISTRAR - application for security for costs made by husband where wife sought to review a decision of a Judicial Registrar refusing to grant her leave under s 44(3) of the Family Law Act 1975 to institute proceedings for spousal maintenance more than 30 years out of time - whether the exercise of discretion to make an order for security for costs, which has the likely effect of permanently staying proceedings, should be exercised more liberally in the case of proceedings which are a review of a decision by a Judicial Registrar than in the case of an appeal from a decision of a Judge at first instance - whether the principles (as stated in Luadaka (1998) FLC ¶92-830) governing the grant of an application for security for costs in a first instance matter should also govern an application for security in the case of a review of a decision of a Judicial Registrar – test to be applied when considering the likely outcome of the proceedings in respect of which security is sought - “prospects of success” as relevant matter.
Caselaw considered:
Jones and Jones (2001) FLC ¶93-080 (at 88,375-88,377),
Luadaka v Luadaka (1998) FLC ¶92-830,
Harris v Caladine (1991) 172 CLR 84; (1991) FLC ¶92-217,
Harrington v Lowe (1996) 190 CLR 311; (1996) FLC ¶92-668,
Pelerman v Pelerman (2000) FLC ¶93-037, and
Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 per McHugh J at 552.
Legislation considered:
Family Law Act 1975, s 44(3), s 81, s 117(2).
Application for leave to re-open hearing of the application for leave to appeal (and the appeal) to adduce further evidence granted.
Application for leave to appeal granted.
Appeal dismissed.
No order as to costs.
REPORTABLE (subject to decision of Judgments Reporting Committee)
Introduction
This is an application by Beverley Dorothy Evans for leave to appeal, and if leave is granted, an appeal against orders made by Lawrie J on 2 November 2001. The provisions of the orders sought to be appealed will be best explained after we set out the history of this somewhat unusual matter.
The respondent to the application before us is Brian John Albert Rochford. Even though the applicant and the respondent have now been divorced for well over thirty years, it will be convenient to refer to them respectively as “the wife” and “the husband”.
At the hearing before us, Senior Counsel for the husband provided us with a chronology setting out the history of this matter. We did not understand the solicitor who appeared for the wife to object in any way to this chronology. Accordingly we propose to rely on it to set out the history of this matter, so far as it provides the necessary background both to the orders of Lawrie J now sought to be appealed, and also to the applications to adduce further evidence which were made by the wife during, and subsequent to, the hearing before us.
History of this matter
The wife was born on 19 December 1934 and the husband on 12 March 1935. Thus both parties are now aged 68.
The parties married on 25 November 1958. They separated in October 1963. The decree nisi dissolving their marriage became absolute on 15 July 1966.
There was only one child of the parties’ marriage, a son, who was born in 1960, but who died, aged 32, in 1992. Following the separation of the parties, he had lived with the wife until he was about 18.
In November 1970, the wife married a Mr Ellsworth, but that marriage was annulled in December 1975 by the Supreme Court of New South Wales. The wife’s applications for ancillary relief in the form of property, maintenance and costs orders were stood over generally with liberty to apply on 14 days’ notice.
In 1983 the husband commenced cohabitation with his present wife. They later married and have a son who was born in 1993.
On 11 January 2001, the wife filed an application for leave under s 44(3) of the Family Law Act 1975 (“the Act”) to institute proceedings for spousal maintenance out of time – she was, it will be observed, over 30 years out of time.
The wife’s application for leave under s 44(3) was heard by Judicial Registrar Loughnan on 31 August 2001.
On 11 September 2001, the Judicial Registrar made an order dismissing the wife’s application and he delivered thorough and comprehensive reasons for his decision.
Because there has been considerable reference before us to the Judicial Registrar’s reasons, we will set out at this point those passages from his reasons which would seem to have particular relevance to matters raised before us. Those passages are as follows:
57.As is set out earlier in these reasons, section 44 provides that before granting leave the Court must be satisfied that hardship would be caused to a party to the relevant marriage or a child if leave were not granted; or in the case of proceedings in relation to the maintenance of a party to a marriage.
58.The wife must satisfy the Court in respect of the more general question of hardship contained in section 44(4)(a).
…
60.As was said by Asche, Pawley and Strauss JJ in In the Marriage of Whitford (1979) 4 Fam LR at 760, 761):
“Where maintenance is sought, then in order to satisfy the court that hardship would be caused if leave were not granted, the applicant will have to show that he or she is unable to support herself or himself adequately by reason of the matters set out specifically in s 72 or for any other reason having regard to the matters referred to in sub-s 75(2), and further, there should be evidence which would show directly or by inference that the respondent is able to contribute towards the applicant's support. If such a case is made out, then it will follow almost invariably that the refusal to grant leave to institute proceedings would cause hardship.”
61.Thus it is necessary to examine the wife’s claim for spousal maintenance.
…
63.As to the threshold issue, if maintenance is to be ordered I must be satisfied that the wife is not able to fully support herself from her own earnings. …
…
72.… In my view it follows that the question of whether or not a claim for maintenance can successfully be made by the wife against her second husband must be relevant to the chances of success of an application for spousal maintenance by the wife against her first husband.
73.In the case before me the wife is not able satisfy the court about her claim against her second husband. She has made no effort to restore and prosecute those proceedings. She may be able to secure relief against her second husband. For that reason, in my view, she not able to establish that hardship would be caused to her if leave is refused.
74.In that hardship is not established it is not necessary to turn to the questions which would impact on the exercise of discretion – an adequate explanation of delay and the competing prejudices to the parties of granting or refusing leave. Given that submissions have been made on these issues, however, I will make some comments about them.
…
78.In the circumstances of this case her explanation [for delay] may well have been accepted.
…
80.It is not appropriate for me to speculate as to whether the husband was conscious that no claim for maintenance had been made by his first wife, when making decisions over the years which had substantial economic consequences. However, as was submitted on his behalf, it is a safe assumption that at some point after the granting of the parties’ divorce and long before the institution of these proceedings more than 34 years later, he excluded from his contemplation the possibility of a claim for maintenance by his first wife. Just in the brief evidence he has given it is apparent that there have been a number of significant events in his life, even in recent times. Events, which have had and will have onerous financial consequences. They include his third marriage, the decisions made in the conduct and in the course of the liquidation of his business, the decision to have a child, the decisions about the schooling of that child.
81.True it is that the outcome of each of those decisions would have been factored into the consideration of the merits of an award of spousal maintenance or at least into the type and quantum of any such award. However, it seems to me that there would be a considerable prejudice to the husband if leave was granted.
82.In all the circumstances therefore leave should not be granted to the wife to institute proceedings for spousal maintenance.
On 10 October 2001, the wife filed an application for a review of the Judicial Registrar’s decision.
On 22 October 2001, the husband filed an application for orders for security for costs and for a permanent stay of the wife’s application for review of the Judicial Registrar’s decision in the event that any order for the payment of security was not complied with.
The husband’s application for security for costs was heard by Lawrie J on 2 November 2001. In an ex tempore judgment delivered that day, her Honour granted the husband’s application and made orders in the following terms:
1.That within 7 days of the date of order the wife do pay by cash or bank cheque into the trust account of Messrs Newnhams Solicitors the sum of $4,200.00 with such sum to be held to abide further order of the Court.
2.That in the event that the wife neglects or fails to comply with order 1 herein within the time stated then the Application for Review filed 10 October 2001 shall be permanently stayed.
These are the orders which the wife now seeks to appeal by her application for leave to appeal which was filed on 13 November 2001.
On 28 November 2001, the husband filed an application against the wife for security for the costs of her present application for leave to appeal and the appeal against Lawrie J’s orders.
The husband’s application for security was dismissed by a Full Court (Lindenmayer, Holden and Guest JJ) on 4 December 2001. The Full Court also made orders for the wife’s appeal against the orders of Lawrie J of 2 November 2001 to be heard with the application for leave to appeal.
The wife’s application for leave to appeal was listed for hearing before this Full Court on 8 April 2002, and in the event was heard on that day, together with the appeal.
On 25 March 2002, the wife filed an application to adduce further evidence at the hearing of the application for leave to appeal and the appeal.
That application to adduce further evidence was dismissed by us at the hearing on 8 April 2002, for reasons which we undertook to give in this judgment.
At the conclusion of the hearing on 8 April 2002, we reserved our decision on the application for leave to appeal and the appeal.
On 30 April 2002, the wife filed a further application in which she sought leave to re-open the hearing of the application for leave to appeal and the appeal for the purpose of adducing further evidence.
Directions were made by us on 21 May 2002 that the wife’s application to re-open for the purpose of adducing further evidence was to be the subject of written submissions according to a timetable set by us.
Written submissions were subsequently received broadly in accord with that timetable.
The judgment of Lawrie J
In her ex tempore reasons for the orders which she made granting the husband’s application for security and providing for the permanent stay of the wife’s application for review if the security was not paid, Lawrie J first described the application which was before her and then set out the relevant statutory provision, being s 117(2) of the Act. That sub-section is as follows:
117(2) 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 sub-section (2A) 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.
Her Honour then continued:
3.It is submitted on behalf of the husband that the wife, being impecunious, will not be able to remedy the loss which he will suffer if he is successful in having the application for review dismissed. He has already expended some $5,764.00 in relation to this litigation. The wife is represented pro bono and has not suffered any loss at this stage.
4.The case is an application by the wife for leave to bring maintenance proceedings against her first husband notwithstanding that it is some 36 years since they were last married to each other. She subsequently remarried and there is a live action pending against her second husband but it has been in hibernation for some time and reading the wife’s affidavit she has not pursued those proceedings with any great degree of vigour. The judicial registrar in a careful and reasoned decision found that the fact that the wife had a live application for spousal maintenance on foot against her second husband meant that it could not be hardship in the usual sense (in which the authorities have found inability to proceed with litigation must be a hardship) and he was therefore not satisfied that he should exercise the discretion in favour of the wife, bearing in mind that the husband had already suffered the prejudice of having to defend the application and would suffer certain prejudice in the event that he was again successful because of the agreed inability of the wife to pay any costs that might be awarded.
5.It is put by the husband’s counsel that the review is likely to endorse the reasoning of the learned judicial registrar. It’s also put by him that this being an appeal the court should be readier to make an order for security for costs. Strictly speaking that’s not really so because this is a review of an exercise of judicial power by someone who is not a holder of the judicial power of the Commonwealth, and the High Court made it clear when endorsing the structuring of the work flow in the way that it has been structured that the crux of such a system was that a party have a right to have it reviewed so I don’t see it as being directly analogous to a matter where a party has had the matter dealt with judicially and then seeks to have it dealt with on appeal.
6.The recent case of Jones v Jones which is reported at FLC (2001) 93080 deals with a case where there was an impecunious litigant. It appears from that authority that that alone is not the critical factor although it is a significant one. Other factors to be considered are whether or not an order for costs would be oppressive or stifle the litigation and also the prospect of the other party being left without a remedy in respect of a costs order if they were successful is also significant.
7.The wife is in straightened (sic) financial circumstances. She is in receipt of the pension. She has the benefit of Housing Commission accommodation. She has a car. She has debts of $20,000. She has some belongings worth no more than $6,000 on her estimate and she’s dependent on the pension. The husband is significantly better off and would be able to pay his costs even if he were to succeed.
8.The critical question then is how likely is it that this appeal or review is going to benefit the wife.
9.I incline to the view of counsel for the husband that the judicial registrar performed a correct analysis of the situation in finding that a person cannot suffer hardship in relation to having a spousal maintenance claim against an alternative candidate rejected when they have not yet brought to fruition their existing claim against another spouse. I think that the prospects in this matter are not very strong and that inclines me to the husband’s view of the matter that it would be unjust for him to be put in the position of having the action proceed against him when it is likely to fail and when he cannot be compensated for the costs which he is likely to expend to defend it.
Issues raised by the application for leave to appeal and the appeal
At the commencement of his oral submissions to us, the solicitor for the wife, Mr Hume, informed us that he abandoned a number of his proposed grounds of appeal (being Grounds 1(b) and (c), 2, 3, 4 and 5 (c)-(f)), and that only the following grounds would be relied on if leave to appeal was to be granted:
1.That her Honour erred in law in finding to the extent that such findings were in fact made by her in the process of reaching her decision – that
a.The existence of the pending proceedings and the failure to restore or prosecute them was a bar to a finding of hardship if the leave sought in her application filed 12 January 2001 was refused.
…
5.That her Honour should have made some or all of the following findings – to the extent that the same were not made by her in the process of reaching her decision
a.That the Review is not a proceeding which possesses no merit;
b.That the Review is not a proceedings which appears to have little merit;
…
g.That the exercise of discretion to make an order for security for costs having the likely effect of permanently staying proceedings should be exercised more liberally in the case of proceedings which are a Review of a decision by a Judicial Registrar that in the case of an appeal from a decision of a Judge.
h.That the exercise of discretion to make an order for security for costs having the likely effect of permanently staying proceedings would deprive the Wife of the opportunity to adduce additional evidence on the hearing of the Review.
i.That the opportunity for the Wife to present further evidence at the hearing of the Review is a necessary prerequisite to the determination of the Review.
j.That the effect of making the orders sought by the Husband would be to deprive the Wife of the opportunity to prosecute an arguable Review which on the face of it has merit.
6.That her Honour erred in law in granting the Husband’s application for the orders for security for costs and stay sought by him.
7.… that her Honour erred in the exercise of her discretion in determining to make the orders for security for costs and stay sought by the husband.
In our view the proposed Grounds 6 and 7 do not advance our understanding of the wife’s case other than to make clear that her Honour is alleged to have erred both in law and in the exercise of her discretion in making the orders which she did.
It will be seen that the remaining proposed grounds of appeal raise the following four matters:
1. whether her Honour was in error in finding (or more correctly, accepting the conclusion of the Judicial Registrar) that the failure by the wife to prosecute her application against her second husband was a bar to finding that the wife would suffer hardship if leave to proceed against her first husband was refused;
2. the nature of the test for the prospects of the proceedings in relation to which an application for security is brought;
3. whether the exercise of discretion to make an order for security for costs, which has the likely effect of permanently staying proceedings, should be exercised more liberally in the case of proceedings which are a review of a decision by a Judicial Registrar than in the case of an appeal from a decision of a Judge; and
4. the significance, in the proceedings for security, of the wife’s proposal to present further evidence at the hearing of the review.
As we understood the affidavit of the wife’s solicitor in support of the wife’s application for leave to appeal, and also his written and oral submissions, these four matters also constituted the basis of his argument that this was a case in which leave to appeal should be granted. We will now consider each of these matters.
Security for costs in proceedings to review a decision of a Judicial Registrar
We will consider first the third of the abovementioned issues, being whether the exercise of discretion to make an order for security for costs, which has the likely effect of permanently staying proceedings, should be exercised more liberally in the case of proceedings which are a review of a decision by a Judicial Registrar than in the case of an appeal from a decision of a Judge.
Although in some of the submissions put to us (particularly those which relied on the Full Court decision in Jones and Jones (2001) FLC ¶93-080), and also in the submissions apparently put to Lawrie J (see paragraph 5 of her judgment), a review of a decision of a Judicial Registrar seemed to be being equated with an appeal from a Judge, we are satisfied that it was ultimately accepted by both sides before us that such a review is not an appeal. Thus the principles which govern an application for security for the costs of an appeal (which, according to the decision of the Full Court in Jones, are different from the principles which govern an application for security for first instance proceedings) do not apply to an application for security for the costs of a review. This would seem to be the conclusion also reached by Lawrie J.
It is convenient at this point to set out the relevant passage from the judgment of Ellis and Mullane JJ (with which Kay J agreed) in Jones which makes it clear that there is some difference between the principles to be applied in determining an application for security for an appeal and those to be applied in determining an application for security at first instance, and also that the principles to be applied in a first instance matter are those set out by the Full Court (Ellis, Finn and O’Ryan JJ) in Luadaka v Luadaka (1998) FLC ¶92-830.
The relevant passage from the decision in Jones, which incorporates the principles set out in Luadaka, is as follows (at 88,375-88,377):
18. In Luadaka v Luadaka (1998) FLC ¶ 92-830, the Court, whilst noting the unfettered nature of the discretion to order security for costs, considered matters which may be relevant in such an application by a respondent to an application at first instance.
19. At 85,507-85,508 the Court said:-
“61. In our opinion, when dealing with an application for security for costs the general rule provided for in s 117(1) applies, namely that subject to s 117(2) each party to proceedings shall bear his or her own costs. However, if the court is satisfied that there are circumstances that would justify an order then the court may, subject to s 117(2A), make such order for security for costs as the court considers just. It is not necessary to establish that there are special circumstances. However, it is necessary to establish that there are justifying circumstances. The decision to order security for costs is discretionary, both as to whether to order security, and as to the amount to be secured.
62. The purpose of an order for security is to secure justice between the parties by ensuring that an unsuccessful party does not occasion injustice to the other. In considering whether or not to make an order, apart from those referred to in s.117(2A), matters which may be relevant include the following:
62.1 It may be relevant to take into account the means of an applicant to satisfy an order for costs if he or she is unsuccessful. Ordinarily the means of the applicant is not alone sufficient to justify an order for costs because of the rule that poverty should be no bar to justice. This is reinforced by s.117 (1). However, the financial circumstances of the applicant do not prevent an order being made if there are other grounds which justify an order. Financial weakness may be relevant, for example, if the applicant is a company. In relation to the means of the respondent, who is the applicant for security, it was held by Goldstein J in Alexander and Alexander (supra) and Gee J in B and B (supra) that the question is whether or not the respondent is able to pay his or her costs. Section 117(2A)(a) requires consideration of the financial circumstances of both parties. However, we do not accept that it will only be in cases where the applicant for security does not have the means to meet his or her costs that an order would be made. In appropriate circumstances an order may be made even if the applicant for security has the means to pay his or her costs.
62.2 The prospects of success is a relevant matter to take into consideration: Parkinson & Co Ltd v Triplan Pty Ltd (supra). However, ordinarily the court will not undertake a detailed assessment of the likelihood of the applicant's success unless it can be demonstrated that there is a high probability of success or failure: Porzelack KG v Porzelack (UK) Ltd [1987] 1 WLR 420 ; Appleglen Pty Ltd v Mainzeal Corporation Pty Ltd (1988) 79 ALR 634 ; Equity Access Ltd v Westpac Banking Corporation (1989) ATPR ¶40-972 . This is because of the lack of material at the time the application is dealt with. However, such an assessment may be possible in circumstances where, as in this case, affidavits have been filed in which the case sought to be made out is set out.
62.3 It is a relevant consideration whether the applicant's claim is made bona fide, whether it is genuine and not trivial, vexatious or a sham: Parkinson & Co Ltd v Triplan Pty Ltd (supra); Lynnebry Pty Ltd v Farquhar Enterprises Pty Ltd (1977) 3 ACLR 133 ; J & M O'Brien Enterprises Pty Ltd v Shell Company of Australia Ltd (1983) 7 ACLR 790 .
62.4 It may be relevant to consider whether or not an order for costs would be oppressive or stifle the litigation. In Mantaray Pty Ltd v Brookfield Breeding Co Pty Ltd (1990) 8 ACLC 304 Byrne J said at 306:
''A factor in deciding whether security should be required is that the order may well mean that the action cannot proceed. That prospect does not require refusal of the application but it is often a significant matter.''
See also Rosenfield Nominees Pty Ltd v Bain & Co (1988) 14 ACLR 467 and Sydmar Pty Ltd v Statewise Developments Pty Ltd (1987) 5 ACLC 480 .
62.5 It may be relevant to consider whether or not the litigation may involve a matter of public importance: Equity Access Ltd v Westpac Banking Corporation (supra); Jodast Pty Ltd v A & J Blattner Pty Ltd (1991) 104 ALR 248 . In Quick on Costs at [ 4.9440] it is said that this will militate against the making of an order.
62.6 It may be relevant to consider whether or not there has been delay in bringing the application. An application may be refused if there is delay in making the application and prejudice is caused to the respondent to the application: Buckley v Bennell Design & Constructions Pty Ltd (1974) 1 ACLR 301 and Loreva Pty Ltd v Cefa Associated Agencies Pty Ltd (1982) 7 ACLR 164 .
62.7 Other relevant matters may include any difficulties of enforcing an order for costs and the amount of costs to be incurred.
63. 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.
20. There is no doubt that the wife is impecunious, that she may well be unable to proceed with the appeal if she is ordered to provide security and will be unable to meet an adverse order for costs in the appeal. The prospect, however, of the husband being left without a remedy in respect of a costs order if the appeal is dismissed is significant.
21. It has long been recognised that, as a general rule and in the exercise of an unfettered discretion, mere impecuniosity of a litigant who is a natural person, will not of itself be a basis for ordering that person to provide security. There is, however, an exception to that general rule, namely in the case of appeals. See Cowell v Taylor (1885) 31 Ch D 34 at 38 , J & M O'Brien Enterprises Pty Ltd v Shell Co of Australia Ltd (No 2) (1983) 70 FLR 261 at 264 , Ciappina v Ciappina (1983) 70 FLR 287 at 290 and Paton v Campbell Capital Ltd (unreported, Federal Court of Australia, 1 July 1993).
22. The fact that the wife would be unable to pay the costs awarded against her, if her appeal was dismissed, is, in our view, a significant factor to take into account in considering whether to exercise the discretion to order security in favour of the husband, but it is not the only or deciding factor.
23. If an appeal appears to have little merit, a court may be more disposed to make an order for security for costs. Whilst we have not had the benefit of submissions on behalf of the wife, the appeal does not appear to raise matters of principle.
The important question which then arises in this case is whether the principles (as stated in Luadaka) governing the grant of an application for security in a first instance matter should also govern an application for security in the case of a review of the decision of a Judicial Registrar.
When on 4 December 2001 the Full Court (Lindenmayer, Holden and Guest JJ) dismissed the husband’s application for security for the costs of the application for leave to appeal now before us (see paragraph 18 above), Lindenmayer J (with whom Holden and Guest JJ agreed) formulated this question which is now before us in the following way:
17. … That question is whether the imposition upon an applicant of an order for security for costs in favour of the respondent, which it is clear he or she cannot meet, in proceedings by that applicant for a review of an exercise of the judicial power of the Court by a Judicial Registrar, constitutes an impermissible fetter to the right of a litigant to obtain a judicial review of such an exercise of power, having regard to the judgments of the High Court in Harris v Caladine (1991) FLC 92-217.
This question as posed by Lindenmayer J is no doubt a valid and important question, and one which we would say, at this point, would certainly cause us to grant the wife leave to appeal in this case.
Having reflected on the matter, we have concluded that given that the law has long recognised that an order for security for costs is available when a matter is at first instance, we do not see why the principles which govern an application for security at first instance should not also govern an application for security when it is made in relation to an application to a Judge to review the decision of a Judicial Registrar. If the review hearing by the Judge, being a de novo hearing, is regarded as the first hearing of the matter, we cannot see any reason why an application for security in respect of that hearing (which, if successful, may result in the permanent staying of the proceedings) should not be governed by the same principles as would govern an application for security (which may also result in the permanent staying of the proceedings) for any other first instance case (which has not been the subject of a hearing by a Judicial Registrar).
We can find nothing in the judgments of the High Court in Harris v Caladine (1991) 172 CLR 84; (1991) FLC ¶92-217 or in Harrington v Lowe (1996) 190 CLR 311; (1996) FLC ¶92-668 which would cause us to take a contrary view.
Accordingly, we conclude that where an application is made for security for costs of an application to review the decision of a Judicial Registrar, such an application should be governed by the same principles which govern any application for security at first instance, being the principles stated by the Full Court in Luadaka.
The test for the prospects of success of the proceedings for which security is sought
It was submitted before us on behalf of the wife that in granting the husband’s application for security, Lawrie J had applied too low a test in relation to the likely outcome of the wife’s application to review the Judicial Registrar’s decision refusing the wife leave to proceed with her maintenance claim out of time.
It was further submitted in this context that her Honour should have applied the same stringent test as is required for the summary dismissal of a matter as is set out in paragraph 46 of the decision of the Full Court in Pelerman v Pelerman (2000) FLC ¶93-037 (footnotes omitted):
46. The gravaman of the Appeal is that the trial Judge erred in the exercise of the discretionary power to summarily dismiss the Application. It is well established that the following principles apply as were recently reviewed and stated in Bigg v Suzi:
(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 as 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 a 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.”
However, it will be seen that in Luadaka, the Full Court did not attempt any precise definition of the test to be applied when considering the likely outcome of the proceedings in respect of which security is sought. In paragraph 62.2, the Full Court simply referred to the “prospects of success” as a relevant matter to take into consideration.
We would also not be minded to attempt to define in precise terms the nature of the test, for the reason that we recognise, as did the Full Court in Luadaka (at paragraph 62.2) that it is often not possible to predict the likely outcome of a matter because of a lack of material. It is sufficient in our view that an appellate court can be satisfied that the primary judge had regard to the “prospects of success” of the proceeding in relation to which security is sought.
In the present case, Lawrie J said (in paragraph 9 of her judgment):
9.…I think that the prospects in this matter are not very strong and that inclines me to the husband’s view of the matter that it would be unjust for him to be put in the position of having the action proceed against him when it is likely to fail and when he cannot be compensated for the costs which he is likely to expend to defend it. (emphasis added)
Thus it will be seen that her Honour did have regard to the prospects of success of the review application. She first expressed the view that the prospects for the wife’s application were “not very strong”, but she then later expressed what can be regarded as a stronger conclusion, being that the wife’s application was “likely to fail”.
We are not persuaded that her Honour erred in the appellate sense in formulating the relevant test in the way in which she did, nor in reaching the conclusion which she did on the basis of the material which was before her.
The wife’s proposal to present further evidence at the hearing of the review
While there is no question that further evidence may be received on the hearing of a review of a decision of a Judicial Registrar, we do not consider that there is any substance in any of the complaints by the wife to the effect that the making of the order for security in favour of the husband, which would be likely to have the effect of staying the wife’s proceedings for leave to proceed with her maintenance claim, would deprive the wife of her right to adduce additional evidence on the hearing of the review.
We consider that this conclusion must follow from the view which we expressed earlier, being that a hearing of an application to review a decision of a Judicial Registrar should be regarded for the purposes of an application for security for costs as being of the same nature as any other hearing at first instance. If in the case of any hearing at first instance, there is a successful application for security in respect of that hearing, the party who has been ordered to pay security may well never have the opportunity to get all the evidence which he or she seeks to adduce in support of the substantive claim before the Court.
To the extent that it might be argued that, had Lawrie J had before her the further evidence which the wife wished to adduce, she may well have taken a different view of the prospects of success of the wife’s application to pursue her maintenance claim out of time, we are not satisfied that this possibility was ever drawn to her Honour’s attention during the course of the hearing before her. Thus it is not open to the wife to pursue such an argument or complaint before us.
The failure by the wife to prosecute her maintenance claim against her second husband
By Ground 1(a) of her grounds of appeal, the wife asserts that her Honour erred in law in finding that “[t]he existence of the pending proceedings and the failure to restore or prosecute them was a bar to a finding of hardship if the leave sought in her application filed 12 January 2001 was refused”.
We consider that Ground 1, as drafted, somewhat overstates the relevant finding or conclusion of both the Judicial Registrar and of Lawrie J.
The Judicial Registrar said at paragraph 73 of his judgment:
73.In the case before me the wife is not able satisfy the court about her claim against her second husband. She has made no effort to restore and prosecute those proceedings. She may be able to secure relief against her second husband. For that reason, in my view, she not able to establish that hardship would be caused to her if leave is refused.
We read the Judicial Registrar as saying no more than that in the circumstances of this case, because the wife had not prosecuted the pending maintenance proceedings against her second husband, she was not able to establish that hardship would be caused to her if leave to prosecute out of time her maintenance claim against her first husband was refused.
In her judgment Lawrie J said:
9.I incline to the view of counsel for the husband that the judicial registrar performed a correct analysis of the situation in finding that a person cannot suffer hardship in relation to having a spousal maintenance claim against an alternative candidate rejected when they have not yet brought to fruition their existing claim against another spouse.
It is true that her Honour here seems to be speaking in general terms and apparently not confining her remarks to the circumstances of this case. But it must be remembered that this was an ex tempore judgment and in any event her Honour is not expressing (and nor did she have to express) a concluded view. In the context of considering the prospects of success of the wife’s application for leave to proceed out of time, her Honour was saying no more than that she inclined to the view that the Judicial Registrar was right in his analysis of the situation in this case in which, although the wife had an outstanding claim for maintenance against her second husband, she was nevertheless endeavouring to establish hardship if she could not prosecute a maintenance claim against her first husband.
Accordingly we are not satisfied that her Honour erred in her approach to this matter of the wife’s claim for maintenance against her second husband on the basis of the material before her. However it is in connection with this matter that we must consider the wife’s applications to adduce further evidence.
The wife’s first application to adduce further evidence
By her first application to adduce further evidence filed on 25 March 2002 which was before us at the hearing of the application for leave to appeal and appeal on 8 April 2002, the wife sought to have us receive an affidavit sworn by her solicitor, Mr Hume, on 25 March 2002. The purpose of the evidence contained in Mr Hume’s affidavit and its annexures was to provide details of the progress of the wife’s proceedings for maintenance against her second husband in the period since the hearing before Judicial Registrar Loughnan. That progress included the transfer of the pending proceedings between the wife and her second husband from the Supreme Court of New South Wales to the Family Court; the location of an address for service for the wife’s second husband; and the making of various procedural directions by the Family Court in relation to the transferred proceedings.
Senior Counsel for the husband opposed the receipt by us of this further evidence. Having heard submissions from the solicitor for the wife in support of her application to adduce further evidence, we refused that application without calling on Senior Counsel for the husband.
Our reason for rejecting the application was that we did not consider that the evidence which indicated that the wife’s claim against her second husband had effectively been re-activated and was now being pursued would assist us, or indeed the wife’s case before us, in any way. We understood her solicitor to appreciate this view, with his ultimate position being, again as we understood it, that he considered that he should bring to our attention the existing situation in relation to the claim against the second husband.
The wife’s second application to adduce further evidence
Following the hearing of the wife’s application for leave to appeal and appeal (at the conclusion of which we had reserved our decision), there was filed on behalf of the wife on 30 April 2002 a further application in which she sought leave to re-open the hearing of the application for leave to appeal and the appeal for the purpose of the Court receiving further evidence which was set out in the affidavit of her solicitor, Mr Hume, sworn on 30 April 2002.
In that affidavit Mr Hume stated that following the hearing before us on 8 April 2002, the wife’s application for maintenance against her second husband had been the subject of a defended hearing on 29 April 2002 before Registrar Henderson who had dismissed the application on the same day.
Because of the practical difficulties of reconvening this Full Court, we gave directions for the wife’s application to re-open to be the subject of written submissions.
In written submissions filed on behalf of the wife on 12 June 2002, to which was attached a copy of Registrar Henderson’s orders and judgment dismissing the wife’s maintenance application against her second husband, it was argued that the evidence of the dismissal of the wife’s application against her second husband, would be evidence which would be before the Court, which would hear any review of Judicial Registrar Loughnan’s decision, and the effect of that evidence would be that the review would have much greater prospects of success. This would be because the Judicial Registrar’s refusal to grant the wife leave to proceed with her claim for maintenance against her first husband had been based on the fact that she had pending proceedings for maintenance against her second husband.
Thus, it was submitted, the Full Court should receive the further evidence for the purpose of establishing that Lawrie J’s order requiring the wife to pay security in relation to the review was erroneous and should be set aside. In this regard reliance was placed on the following passage from the judgment of Finn and Barlow JJ in Genish-Grant v Director-General, Department of Community Services (2002) FLC ¶93-111:
21. Having regard to the decision of the High Court in CDJ v VAJ (1998) FLC ¶92-828; (1998) 197 CLR 172 (and particularly what was said by McHugh, Gummow and Callinan JJ at [109], [111] and [114]), it is clear that further evidence, particularly where the evidence relates to events occurring after the trial, can be admitted by the Full Court in order to demonstrate that the order under appeal (although not necessarily erroneous at the time that it was made) has been rendered erroneous, and where that further evidence is not in dispute, this Full Court is able to evaluate it and to take it into account in determining the appeal without the necessity for a new trial.
In submissions filed on behalf of the husband on 1 July 2002, Senior Counsel for the husband did not challenge the entitlement of the wife to apply to re-open the appeal for the purpose of seeking leave to adduce the further evidence concerning the dismissal of the wife’s claim against her second husband. Nor did Counsel challenge the existence of a discretion in this Court to receive that further evidence. However he did oppose the exercise of that discretion in the wife’s favour.
It was submitted on behalf of the husband that the factors referred to in the passage from Genish-Grant on which reliance was placed on behalf of the wife, did not give rise to an entitlement to adduce the evidence. Rather in a case where such factors might be satisfied, it was submitted, that “they constitute but part of the relevant facts that the court should take into account” in considering whether or not to exercise the discretion to adduce further evidence.
We agree with that submission.
Senior Counsel for the husband then went on to make the following submissions in support of the husband’s contention that the discretion should not be exercised in favour of the admission of the further evidence (footnotes omitted):
5.The present application gives rise to some unique and, it is submitted, important considerations. It is to be remembered that in both the hearing before Judicial Registrar Loughnan (s44(3)) and the hearing before Justice Lawrie (security for costs) the appellant had chosen to conduct her case against the background of the apparently conscious decision that she would not, in the course of proving her case against the present respondent, pursue action against her second husband (Mr. Ellsworth). Having conducted the entirety of the proceedings on that basis is she entitled, for the purpose of now seeking the exercise of a discretion to admit further evidence, to depart entirely from that course? Whilst in one sense the evidence the subject of the present application is fresh and deals with issues arising since the hearing, the evidence only comes into existence at all, as a result of this change in the course of strategy followed by the appellant. It is submitted, for the reasons to be advanced below, that these facts would lead to an exercise of discretion against the admission of the evidence and thus the application ought be refused.
…
7.When the admission of evidence under consideration involves a substantial shift of the manner in which the trial has been conducted, it is submitted, that this constitutes a relevant matter to be taken into account. Subject to some narrow exceptions identified in the authorities, which are not relevant for present purposes, the law has long recognised that in the conduct of an appeal an appellant is bound by the conduct of the proceedings in the court below: Nolan v Ingram (1984) FLC 91-585 at p79,723-4; Ahmad v Ahmad (1995) FLC 92-571 where Nicholson CJ (with whom Fogarty and Jordan JJ agreed) said at p81,662:
“It is clear enough that parties in litigation are bound by the conduct of their counsel and the way in which their counsel choose to present the case.”
See also: Wentworth v Woollahra MC [1985] 59 ALJR 36 at 39
…
10.Furthermore, a long recognised factor to be taken into account on the discretion of admission of further evidence has been the demonstration that reasonable diligence has been exercised to procure the evidence prior to trial. In this case there was no diligence, to the contrary there was a decision not to pursue the course that would lead to the production of this evidence. It is to be remembered that, in part, the appellant’s appeal proceeded on the basis of advancing argument that the primary judge was in error in placing weight upon the appellant’s failure to take the course that she has now undertaken.
11.There is a further (and independent) substantive reason for the rejection of the application. The evidence sought to be adduced is strongly prejudicial to the respondent and should be regarded as unsafe. The weight to be given to these propositions is to be borne out by the extraordinary shift in the applicant’s case before the Registrar (against Mr Ellsworth) from that which is sought to be ventilated against the present respondent. This arises particularly in paragraphs 7 and 8 of the judgement (sic) where the registrar concludes, in relation to the health of the applicant, in the following terms:
“The wife’s health. There is no specific evidence regarding her state of health. The facts are she has not worked and is now of an age where she would have difficulty in gaining employment. Her only employment skills are as a beautician.”
12.When compared with the case that was articulated before judicial Registrar Loughnan (AB39: para 17 and 36) which put a case that had been launched entirely from the applicant’s poor health, there is, regrettably, a compelling interference that in her zealous pursuit of the present proceeding the applicant sought to be unsuccessful before the Registrar. Alternatively, it may have been the case that in haste to dispose of that proceeding (so as to ensure the application to adduce evidence presently made) she proceeded without proper evidence in relation to her health. This fait accompli now delivered by the appellant is something that the respondent husband has no capacity to fairly address.
Having made his submissions in support of the proposition that we should not exercise the discretion to admit further evidence, Senior Counsel for the husband then proceeded to make further submissions to the effect that even if we were to admit the further evidence, we would nevertheless conclude that the decision reached by Lawrie J was correct. In this regard Counsel submitted as follows:
15.… The following aspects of the evidence lead to a compelling conclusion that the appellant’s prospects of success in her substantive application (in which security was ordered) are very poor:
§ The claim is out of time by the extraordinary period of 36 years.
§ In her case against Mr. Ellsworth a Registrar has already found that the appellant, on her own evidence, failed to meet the thresholds imposed by s.72 Family Law Act. If it be assumed that both applications are presented on the same truthful evidence as to her circumstances, there is no reason to infer that a different conclusion would be reached.
§ The respondent has minimal income. He has been unemployed since February 2001 (AB40; para 24) and his wife works as a nurse between three to five nights per week. His Household has an income of approximately $500.00 per week (provided by his wife) and he has expenses of $1,201.00 per week including mortgage payments which are not being met (AB 41; para 29). He has net property of approximately $500,000.00 (AB 42; para 30 and 31) and a resource in the form of superannuation. If he were to access that superannuation it would carry the requirement of his retiring from employment. Whilst he is presently without employment and has an obligation to continue to support his seven year old child (AB 40; para 20) he can hardly afford to retire.
§ The Judicial Registrar recorded some specific submissions as to prejudice to the respondent (AB44; para 44).
Senior Counsel for the husband also relied on certain passages from the judgment of McHugh J in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541, which was a case concerning an application for an extension of time under the Limitation of Actions Act 1974 (Qld), including the following (at p 552):
The effect of delay on the quality of justice is no doubt one of the most important influences motivating a legislature to enact limitation periods for commencing actions. But it is not the only one. Courts and commentators have perceived four broad rationales for the enactment of limitation periods. First, as time goes by, relevant evidence is likely to be lost. Secondly, it is oppressive, even “cruel”, to a defendant to allow an action to be brought long after the circumstances which gave rise to it have passed. Thirdly, people should be able to arrange their affairs and utilise their resources on the basis that claims can no longer be made against them. …
The final rationale for limitation periods is that the public interest requires that disputes be settled as quickly as possible.
It was then Counsel’s further submission that:
20.The policy consideration that apply in litigation generally, as explained by McHugh J, are all the more proscriptive in their application when read in the shadow of the mandate set out in section 81 Family Law Act which applied to the entirety of proceedings under Part VIII.
Section 81 is in the following terms:
In proceedings under this Part, other than proceedings under section 78 or proceedings with respect to maintenance payable during the subsistence of a marriage, the court shall, as far as practicable, make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them.
The solicitor for the wife filed detailed submissions in reply on 8 July 2002 in which it is fair to say he took issue – in many instances at a factual level – with all the submissions for Senior Counsel for the husband. We do not consider it necessary to further detail the submissions in reply.
Conclusion
We consider that we should receive as further evidence in the hearing of the application for leave to appeal and the appeal (and for this limited purpose, the hearing of that application and appeal should be re-opened), the evidence contained in the affidavit of the wife’s solicitor sworn 30 April 2002, together with the orders and reasons for judgment of 29 April 2002 of Registrar Henderson.
We do so because we consider that in the very unusual circumstances of this case the interests of justice require that we be fully appraised of the current situation in relation to the wife’s claim for maintenance against her second husband. Furthermore, the evidence in question cannot be the subject of any dispute, and its likely effect on the conclusions of Lawrie J can be evaluated by us without the need for a new trial. In reaching this decision, we have had particular regard to the following passage from the judgment of the majority in CDJ v VAJ (1998) 197 CLR 172; (1998) FLC ¶92-828:
114. No doubt the Full Court will readily admit further evidence which is not in dispute and which the Court is able to evaluate and take into account in considering the appeal without the necessity to have the proceedings re-heard. Further evidence of this kind is particularly likely to be admitted where the evidence relates to events occurring after trial. In the case of undisputed evidence which the Full Court can evaluate as part of the evidence in the appeal, the discretion to admit the evidence may even be properly exercised without the Full Court considering what effect it would have had on the trial judge's decision. In that context, the likely effect of the further evidence on the Full Court's view of the evidence before the trial judge is the important consideration.
However the admission of this further evidence has not persuaded us that the appeal should be allowed. It will be recalled that we earlier examined the four issues that were the substance of the grounds of appeal pursued on behalf of the wife, and that we found no substance in any of those matters.
Accordingly, the wife can only succeed in her appeal if she can persuade us that had the further evidence concerning the dismissal of her maintenance claim against her second husband, been before Lawrie J, then her Honour would not have made the orders which she did for the payment of security by the wife and a permanent stay in the event that the security was not paid.
It seems clear that of the various matters to which, according to the Full Court in Luadaka, regard must be had when determining an application for security for costs, the most significant matter before Lawrie J was the prospects of success of the review of the decision not to grant the wife leave to pursue out of time her claim for maintenance against the husband, or put more simply, the prospects of success of the wife’s application for leave under s 44(3) to institute proceedings against the husband for maintenance over thirty years out of time.
In our view even if the wife was now able to establish hardship caused by not being able to pursue her claim for maintenance against the husband ( - the claim against her second husband having been disposed of), she would still have to overcome the issue of the prejudice which the husband would suffer if she was permitted to pursue her claim. It should not be forgotten that the Judicial Registrar found that the prejudice to the husband would be “considerable”. Again in our view, when regard is had to that prejudice, we consider that the wife’s prospects of success in her application for leave would have remained slim.
Accordingly, we are not satisfied that had the evidence concerning the dismissal of the wife’s claim against her second husband, been before Lawrie J that her Honour would have made orders different to those which she did make. The appeal must therefore be dismissed.
Costs of the application for leave to appeal and the appeal
At the conclusion of the hearing on 8 April 2002, we received oral submissions in relation to the costs of the application for leave to appeal and the appeal.
In the event that the appeal failed, as it has, Senior Counsel for the husband sought an order for costs. However he made it clear that he did this formally because it was recognised that the wife would not be in a position to meet an order for costs.
We consider that the circumstances would normally warrant the making of an order for costs in favour of the husband. However, we recognise the futility of making such an order given the financial circumstances of the wife, and accordingly there will be no order as to costs.
Orders
That the application filed on behalf of the wife on 30 April 2002 for leave to re-open the hearing of the application for leave to appeal and the appeal and for leave to adduce further evidence be granted.
That the application for leave to appeal be granted.
That the appeal be dismissed.
That there be no order as to costs.
I certify that the preceding 85 paragraphs
are a true copy of the reasons for judgment
of this Honourable Full Court
[M. Donaldson]
Associate
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