Fennessy & Gregorian (Security for Costs)
[2008] FamCAFC 89
•2 July 2008
FAMILY COURT OF AUSTRALIA
| FENNESSY & GREGORIAN (SECURITY FOR COSTS) | [2008] FamCAFC 89 |
| FAMILY LAW - APPLICATION – SECURITY FOR COSTS IN RELATION TO APPEAL – Where three parties sought security for costs from husband in differing amounts – Discussion of Luadaka & Luadaka (1998) FLC 92-830 and Part 19.2 of the Family Law Rules 1994 – Where husband failed to provide accurate financial information – Where husband asserted that he had sufficient unspecified funds to conduct his appeal, but asserted he could not pay security – Whether husband’s appeal is bona fide – Whether grounds of appeal have merit – Where costs of appeal will be substantial – Where recovery of costs likely to be difficult – Security for costs ordered in the sum of $50,000 question of apportionment of quantum for some or all of the parties’ costs to be determined by the Full Court at the hearing of the appeal if appeal unsuccessful. | |
| Family Law Act 1975 (Cth) - s 117(2), s 117(2A) – (5), 121, Family Law Rules 2004 (Cth) – r 19.05(2), Pt 19.2 | |
| Jones & Jones (2001) FLC 93-080 | |
| APPELLANT: | Mr Fennessy |
| RESPONDENT: | Ms Gregorian |
| INDEPENDENT CHILDREN’S LAWYER: | Mr Williams |
| INTERVENOR: | Department of Child Safety |
| FILE NUMBER: | BRF | 5353 | of | 2003 |
| APPEAL NUMBER: | NA | 6 | of | 2008 |
| DATE DELIVERED: | 2 July 2008 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Coleman, Boland & Thackray JJ |
| HEARING DATE: | 15 May 2008 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 19 December 2007 |
| LOWER COURT MNC: | [2007] FamCAFC 1574 |
REPRESENTATION
| ADVOCATE FOR THE APPELLANT: | Mr Fennessy |
| COUNSEL FOR THE RESPONDENT: | Ms Brasch |
| SOLICITOR FOR THE RESPONDENT: | Andersons Solicitors |
| COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER: | Mr Linklater-Steele |
| SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: | Mr Williams Williams Lawyers |
| SOLICITOR FOR THE DEPARTMENT OF CHILD SAFETY: | Mr Parrott, Crown Law |
Orders
That the husband’s Application in a Case filed 14 January 2008 is dismissed.
That by consent of all parties, the hearing of the husband’s appeal proceed in reliance upon an electronic copy of the transcript of the evidence at trial.
That, subject to Order 4 hereof, the hearing of the husband’s appeal be specially fixed for the week commencing 17 November 2008 in Brisbane.
That on or before 4 August 2008 the husband lodge with the Appeals Registrar, Brisbane the sum of $50 000 by way of security for costs of the appeal, such sum to be invested by the Registrar in an interest-bearing account pending further order of the Full Court.
That, not less than one month prior to the commencement of the hearing of the husband’s appeal, the husband file and serve any amended grounds of appeal upon which he wishes to rely together with an outline of all submissions which he intends to make on the hearing of his appeal together with references to the transcript of the trial upon which he relies.
That the costs of this application be reserved.
IT IS NOTED that publication of this judgment under the pseudonym Fennessy & Gregorian (Security for costs) is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE |
Appeal Number: NA 6 of 2008
File Number: BRF 5353 of 2003
| Mr Fennessy |
Appellant
And
| Ms Gregorian |
Respondent
And
| Independent Children’s Lawyer |
And
| Department of Child Safety |
Intervenor
REASONS FOR JUDGMENT
By Application in a Case filed 14 January 2008 Mr Fennessy (“the husband”) sought orders that the transcript of the trial of parenting proceedings between himself and Ms Gregorian (“the wife”) in which an Independent Children’s Lawyer (“ICL”) had been appointed, and the Director General, Department of Child Safety (“DoCS”) had participated, be provided to him by the ICL or the Court. The husband’s application confirmed his willingness to pay the “commercial rate” of photocopying such transcript. (Appeal Book, Vol 2, page 274). A second Application in a Case filed by the husband on 27 February 2008 limited the portions of the transcript which he sought to have provided to him. The application further sought that such portions of transcript be produced by the Court and photocopying be paid for by him. (Appeal Book, Vol 3, page 291).
An Application in a Case filed by the DoCS on 27 March 2008 sought, inter alia, an order that the husband provide security for costs. Applications, inter alia, for security for costs were also filed by the wife on 21 April 2008, and by the ICL on 23 April 2008.
The applications arise from the husband’s appeal against substantive orders made by Collier J on 19 December 2007, reasons for which were published on that date. The effect of such orders was to preclude the husband spending time with or communicating with the only child of the husband and the wife, L (“the child”), the only child of the husband and the wife.
Background
The trial Judge’s reasons for judgment provide a helpful, and relatively uncontroversial background to the applications to be determined by this Court.
The husband was born in April 1940 and is accordingly 68 years old. The wife was born in October 1969 and is thus aged 38 years.
The parties commenced their relationship in January 1995. For approximately five months of that year the husband was abroad. In December 1995 the child of the parties was born.
In 1996 the husband was imprisoned. He was granted home detention in November 1998 at which time the parties resumed cohabitation.
The parties finally separated on 13 January 2003. The wife then left the former matrimonial home. The child remained there with the husband. Thereafter the child was unilaterally removed by the wife from the former matrimonial home, and later by the husband from the wife’s residence. Orders were made in the Family Court of Australia on 15 July 2004 that the child reside with the wife. Since August 2003 both the wife and the husband have made allegations that the other parent has abused the child.
The proceedings occupied some 52 hearing days before Collier J, the trial commencing on 18 July 2005 and concluding on 12 September 2006. The husband did not participate in the final two days of the trial.
At trial, the ICL’s contention was that the husband had not demonstrated that it was in the child’s best interests to reside with him. The ICL did not submit that the child spend time with the husband, whether or not such time be supervised. The wife submitted that the child should spend no time with the husband. The trial Judge’s decision was substantially in accordance with the outcomes sought by the wife and the ICL.
Provision of the Transcript
The husband’s application that the transcript of the trial be provided to him by the ICL or the Court upon his paying a fee for photocopying such transcript at the commercial rate (Appeal Book Vol 2, page 274, par 3) requires little discussion. Having regard to the length of the total transcript (some 7000 pages), the Court and each of the parties agreed that the appeal should be conducted by reference to the transcript of the trial in electronic form. No question of producing hard copies of the transcript, or the cost of so doing, thus arises. To the extent that any party to the appeal, or the Court for its own use, wishes to have a hard copy of any portion of the transcript, subject to s 121 of the Family Law Act 1975 (Cth) (“the Act”), we see no reason why that party or the Court, having obtained the disc, could not produce such hard copy.
Although it is not strictly necessary for us to consider the husband’s request that the ICL provide photocopies of transcript obtained by him, we note that copyright is maintained in the transcript. In view of the agreement to dispense with hard copy of the transcript, and the issue of copyright referred to by us, we propose to dismiss the husband’s application filed 14 January 2008. The husband may if he wishes to do so make application to the Court for a copy of the disc.
Security for Costs
Relevant Law
The law governing security for costs is not in doubt. The power for the Court to make such an order is found in s 117(2) of the Act which provides:-
If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
Sub-sections 117(2A) – (5) of the Act are relevant to the exercise of the power conferred by s 117(2). Those sub-sections provide:-
(2A) In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(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.
(3) To avoid doubt, in proceedings in which an independent children's lawyer for a child has been appointed, the court may make an order under subsection (2) as to costs or security for costs, whether by way of interlocutory order or otherwise, to the effect that each party to the proceedings bears, in such proportion as the court considers just, the costs of the independent children's lawyer in respect of the proceedings.
(4) However, in proceedings in which an independent children's lawyer for a child has been appointed, if:
(a) a party to the proceedings has received legal aid in respect of the proceedings; or
(b) the court considers that a party to the proceedings would suffer financial hardship if the party had to bear a proportion of the costs of the independent children's lawyer;
the court must not make an order under subsection (2) against that party in relation to the costs of the independent children's lawyer.
(5) In considering what order (if any) should be made under subsection (2) in proceedings in which an independent children's lawyer has been appointed, the court must disregard the fact that the independent children's lawyer is funded under a legal aid scheme or service established under a Commonwealth, State or Territory law or approved by the Attorney‑General.
The relevant rules of the Court are found in Pt 19.2 Family Law Rules 2004 (Cth) (“the Rules”). Rule 19.05(2) provides:-
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 case;
(f) whether the case involves a matter of public importance;
(g) whether a party has an order, in the same or another case (including a case in another court), against the other party for costs that remains unpaid;
(h) whether the applicant ordinarily resides outside Australia;
(i) the likely costs of the case;
(j) whether the applicant is a corporation;
(k) whether a party is receiving legal aid.
The principles governing applications for security for costs were extensively considered by the Full Court in Luadaka & Luadaka (1998) FLC 92‑830. The Full Court (Ellis, Finn and O’Ryan JJ) stated (at 85,507) that the underlying purpose of ordering security for costs was “… to secure justice between the parties by ensuring that an unsuccessful party does not occasion injustice to the other.” Their Honours said (at 85,507 – 85,508):-
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) [(1977) FLC 90‑257] and Gee J in B and B (supra) [(1986) FLC 91‑749] 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) [[1973] 1 QB 609]. 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.
In Jones & Jones (2001) FLC 93‑080 the Court made clear that the principles emerging from Luadaka (supra) apply to applications for security for the costs of an appeal. The majority of the Full Court (Ellis & Mullane JJ, with whom Kay J largely agreed) said (at 88,376 – 88,377):-
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.
The written submissions of counsel for the ICL concisely and accurately summarised the principles enunciated in Luadaka (supra) and the terms of the Rules to which we have referred. The husband was referred to that summary (see paragraph 26 of the ICL’s Outline of Submissions) to assist him to focus his submissions on matters relevant to the applications for security for costs which he sought to resist.
Against the background of the relevant legal principles, we turn to consider the merits of the applications for security for costs of the appeal.
The Financial Circumstances of the Parties
By virtue of s 117(2A) of the Act and r 19.05(2) of the Rules, two of the matters to be considered in the context of security for costs are the financial circumstances of the parties and the receipt of legal aid.
The husband has been vague in relation to his financial resources and employment. The husband’s reference to the “elasticity of my resources” did nothing to alleviate the absence of reliable disclosure of details of his property and income. (Affidavit of the husband, Appeal Book Vol 3, page 401, par 75). The husband deposed to “no longer” receiving “any pension or any other government payments whatsoever.” (Affidavit of the husband, Appeal Book Vol 3, page 400, par 68). What he does receive, for what, and from what source was not revealed however.
The husband further deposed to having “funded the entire cost of these and other proceedings … from my own resources apart from two redeemed cost certificates” and asserted that funding the appeal was something “which [he] will do”. (Affidavit of the husband, Appeal Book Vol 3, page 400, par 71). He further deposed to having finances to fund the appeal, despite acknowledging that the costs of the appeal were currently unknown, as well as the finances to “fund a trip or 2 trips to the High Court.” (Affidavit of the husband, Appeal Book Vol 3, page 401, pars 72 – 74). However, the husband said that “while I have funds enough to see this through I am not in a position to provide security for costs to anyone much less $60,000.00 to indulge [the wife’s solicitor’s] feeding frenzy.” (Affidavit of the husband, Appeal Book Vol 3, page 401, par 74).
The written submissions on behalf of the ICL asserted that “on the evidence available and certainly given the failure of the [husband] to provide any evidence to the contrary … the [husband’s] financial resources are limited.” (Outline of Submissions – Security for Costs Application – ICL, page 5, par 28). The written submissions of counsel for the wife asserted that the husband is impecunious. (Wife’s Submissions, page 5, pars 10 – 12).
It is difficult for the Court to reach a conclusion with respect to the husband’s financial position, given the lack of detail which he has provided in relation to the issue. However statements made by the husband during the hearing of the applications on 15 May 2008 disincline the Court to conclude that the husband lacks the means to provide security for costs. Support for such disinclination is provided by a number of admittedly ambiguous statements made by the husband during his submissions on 15 May 2008.
The husband said during such submissions on 15 May 2008:-
What I do have - and I’ve said this in my material, and it’s been pointed out in response of, I think, the [wife] or one of the others there - that I have enough. I have a certain elasticity, and I have enough to see these proceedings through - this appeal, and a trip or two, as they’ve paraphrased, to the High Court, if necessary. So I have that. I won’t run out of money.
…if the Court says to me today, “No, we’re not going to help you with any transcript”, I’ll still have enough money to go - and I’ll buy a couple more days of transcript in relation to the cross-examination of [Professor N], and I might even buy a couple of days of transcript of something else. So I have, you know, 10, $15,000, maybe even $20,000 to throw at this if necessary. But I don’t - but I need to preserve those resources to be able to buy transcript, and conduct these - this appeal, and of course take time off work, just the same as last year - well probably two years ago now it is - when this trial went on. This trial spread of 50 days - of 50 days over 18 months, and so forth. I wasn’t able to do much work, obviously.
…
My wife’s - just in case you’re wondering about her - her evidence was uncontested at the hearing that she’s wealthy. She owns many properties in the metro Manila region. And nobody questioned that. But I don’t live off her, even though she said in her application and in her affidavit - and this is evidence, I'm not adding to the evidence - she said, “I could keep him if I wanted to”. So - but I don’t allow that sort of thing to happen.
I do work. And I do earn income… and I have people to support, as you’re well aware, other children, and an ex-wife to assist. And that’s not fresh evidence either, because this came up - that wasn’t in my outline of argument. This came up in response to the questions posed by this application.
Now - so I have enough to see me through. I have enough to survive. I’ll see this appeal through. Whatever you deny me, one way or another I’ll scrap [sic] around and get. So I won't be bailing out. ... (Transcript of 15 May 2008, page 28, line 10 – page 29, line 6).
Later in the course of his submissions, the husband said that “one must assume … that I’m under oath”. (Transcript of 15 May 2008, page 31, lines 5 – 6). He then proceeded to say that:-
Up until the end of November last year I was employed as a project manager, or manager of a company, and I earned well over $100,000 for that - yes, over $100,000 for a year, okay? Since that time I haven't worked. But also as the evidence is and was explained to - and as given to Collier J, my wife and I also have a business. We import a lot of things from overseas: high fashion things; and jewellery; and a lot of stuff like that, and we buy and sell. So that's about what I’m doing. So I haven’t had a regular income in the sense of having a job where somebody pays me anything, since about November last year.
…
So there’s been no income this year, apart from trading activities. And you’ll be looking for a figure there, let me guess at something. So far this year, almost half way through the year, I might've earned 30 or $40,000. That’d be wrong - I'd say about 30 - about 30. My wife has probably earned about the same thing, probably a bit more. But last year, of course, was a totally different thing, and the year before that as well.
…
(Transcript of 15 May 2008, page 31, lines 6 – 15, lines 30 – 35).
No documentation supporting any of his assertions was provided by the husband. With respect to him, the husband’s case is ultimately that his position is as he says it is. Those opposing the husband have no ability to investigate his asserted financial position or, equally important, ability to attempt to recover any costs awarded against him in reliance upon any of his disclosures.
As is apparent from the portions of the transcript of the hearing of the security applications which are reproduced above, almost in the same breath as the husband denied having means, he alluded to their existence. Having regard to the husband’s elusiveness regarding his financial position, and the implications of his representations in that respect, we are not satisfied that he lacks the means to provide substantial cash security for the costs of those opposing his appeal. Objectively, if the appeal is unsuccessful and costs are awarded against the husband, such orders would only be likely to be met to the extent that this Court imposes security for costs.
The wife is in receipt of legal aid. (Wife’s Submissions, page 7, par 25; Affidavit of RB, Appeal Book Vol 3, page 325, par 8). The other parties are also funded by the government and significant monies have been contributed by the public purse in respect of the proceedings involving the husband and the wife. Legal Aid has contributed $196 463 in relation to costs of the wife between December 2003 and April 2008 (Affidavit of RB, Appeal Book Vol 3, page 325, par 9) and $378 683 in relation to the ICL’s costs between the date of his appointment and April 2008. (Affidavit of PW, Appeal Book Vol 3, page 377, par 2). DoCS has paid $136 200 in relation to the costs of the involvement of the Director in the proceedings between July 2004 and June 2007. (Affidavit of TB, Appeal Book Vol 3, page 309, par 7). These sums total $711 346.
Whilst the husband may believe “that the [wife] and the other parties” have “seemingly limitless resources of Legal Aid and the state” (Affidavit of the husband, Appeal Book Vol 3, page 402, par 80) that contention is misconceived. In determining the applications for security for costs, the Court may have regard to the grants of legal aid and their terms. We see no reason why parties to the appeal who are funded by the public purse should be disadvantaged in ways that parties who are privately funded are not.
It has been suggested by the parties resisting the husband’s appeal that historically the husband has not been forthcoming with the provision of money, including having provided “no financial assistance” to the wife in relation to the child. (Affidavit of RB, Appeal Book Vol 3, page 328, par 40). We consider these matters of minor significance in this case.
It was submitted that costs previously ordered against the husband remain unpaid. The solicitor for the wife deposed to a costs order of 12 November 2004 remaining unpaid by the husband in April 2008. (Affidavit of RB, Appeal Book Vol 3, page 325, pars 5 – 6). Similarly in an affidavit filed on behalf of DoCS, it was alleged that there have been two previous costs orders against the husband which remain unpaid as of March 2008. (Affidavit of TB, Appeal Book Vol 3, page 309, pars 11 – 14). However at the hearing of the security application, the husband did offer “if it’s going to be a huge stumbling block” to “write out a cheque today” for $2500 to satisfy a previous costs order, describing that as “the least of our worries”. (Transcript of 15 May 2008, page 33, lines 20 – 23). As the other orders for costs against him have not been pursued, for what appear to be good reasons, it would not be appropriate to use those orders against the husband in these applications. In context, past costs orders against the husband do not materially advance the applications for security for costs.
The Bona Fides of the Appellant
The history of Family Court proceedings between July 2004 and February 2008 have been detailed in an annexure to an affidavit filed on behalf of DoCS and reveal ten occasions upon which the husband has commenced litigation in this or other relevant courts, some of which involved multiple days. (Affidavit of TB, Appeal Book Vol 3, pages 312 – 314). A similar, detailed account of the wife’s solicitor reveals that the husband has not only instigated such proceedings but has also filed numerous applications, reviews and appeals of them. (Affidavit of RB, Appeal Book Vol 3, pages 331 – 336, annexure RAB1). The husband has also instigated various proceedings against the wife in local courts. (Wife’s Submissions, page 3, par 8(a); Affidavit of RB, Appeal Book Vol 3, pages 324 – 325, par 4).
Other matters upon which counsel for the wife relied do raise questions as to the bona fides of the husband’s appeal to this Court. These include his having:-
…
k. Walked out of an earlier trial involving his older children …
l.Declined or otherwise failed to attend and participate in this trial prior to its conclusion and took no further part therein …
m.Declined or otherwise failed to attend and participate in his Appeal NA 62/06 …
n.… been declared a vexatious litigant …
o.… caused delays and significantly lengthened the hearing time [at trial] ... (Wife’s Submissions, page 4, par 8).
It was submitted by counsel for the wife, the ICL and DoCS that the husband lacks genuineness in bringing his appeal. On behalf of the wife, and also on behalf of the ICL, it was submitted that the husband did not challenge the findings of fact relating to sexual abuse of the child where it would be expected that the husband would have done so. (Wife’s Submissions, page 6, par 15; Outline of Submissions – Security for Costs – ICL, page 6, par 44).
Counsel for the wife submitted that the husband’s “attacks upon the [wife’s] solicitors, DOCS, QPS, and members of this Honourable Court” lead “irreducibly to the conclusion that the [husband] is inexorably drawn to castigating those who do not find as he demands.” (Wife’s Submissions, page 6, par 16). Similarly on behalf of the ICL it was submitted that “[t]he Court would have a concern that this appeal is yet another vehicle for [the husband] to lambaste the Family Court, members of the police service and the Department of Child Safety.” (Outline of Submissions – Security for Costs – ICL, page 6, par 47). Further, counsel for the ICL submitted that the husband “craves … victory; the welfare of his child is sadly subordinate to this.” (Outline of Submissions – Security for Costs – ICL, page 6, par 49).
Also going to the issue of the bona fides of the husband is that he chose not to participate in the final two days of the hearing of the trial. (Reasons for Judgment, Appeal Book Vol 1, page 17, par 1 and 7). On behalf of DoCS it was submitted that the husband “did not participate in the conclusion of the proceedings nor make submissions notwithstanding that he was given the opportunity to do so. Accordingly it is submitted that this appeal is not a genuine appeal, but rather an attempt to pass commentary on the decision.” (DoCS – Summary of Argument in Support of Application in a Case, Appeal Book Vol 3, page 479, par 21).
Additionally, counsel for the wife submitted that the husband “now wishes to Appeal from a proceeding he started but declined to conclude” which “speaks little of the bona fides of the Appeal.” (Wife’s Submissions, page 6, par 17).
Although we have some misgivings as to the genuineness of the husband in appealing against the trial Judge’s orders, and his motives for doing so, we are not persuaded that the husband is not bona fide in pursuing his appeal against the trial Judge’s orders. The material which the husband has to date produced in support of his appeal is influential in that respect. The actions of the husband relied upon by counsel for those resisting his appeal do however provide rather more support for the exercise of discretion to require the husband to provide security for costs than for refusing to do so.
The Merits of the Appeal
It was submitted by counsel for the wife, the ICL and DoCS that the grounds of appeal agitated by the husband are issues that have been raised and decided in earlier proceedings. On behalf of the wife, counsel submitted that “[t]he current Amended Grounds of Appeal evince little difference to that which the [husband] has already agitated and appealed” and that “[h]e made out not one of his Grounds”. Counsel proceeded to submit that “Thus, with the [husband] failing to participate after the 2007 Appeal was determined (ie, the Appeal raising almost identical grounds to the present) it would be hard to say that there is a high probability of success for him.” (Wife’s Submissions, page 5, par 13).
Counsel for the ICL submitted that the husband “continues to press forward with arguments which have been demonstrated and found in the past to be irrelevant for the purposes of any appeal and the determination of the best interests of the child.” (Outline of Submissions – Security for Costs Application – ICL, pages 5 – 6, par 33).
Similarly, the submissions of the Crown Solicitor on behalf of DoCS suggest that “the Grounds of Appeal are almost identical to those previously agitated. Accordingly it is submitted that the [husband’s] prospects of success are very poor at best.” (Summary of Argument in Support of Application in a Case, Appeal Book Vol 3, page 478, par 17). Giving reasons for so concluding, the Crown Solicitor further submitted that “the Appeal is vexatious.” (Summary of Argument in Response to Application in a Case, Appeal Book Vol 3, page 490, par 25).
In response to those submissions, it was asserted by the husband that:-
I say the application of the [wife] and the affidavit of [the wife’s solicitor] should be dismissed with costs on the grounds it is frivolous, vexations [sic] contrary to the evidence as set out in my outline of argument fails to weigh the prospects of success of the [husband’s] appeal, and seeks to delay and prolong this appeal as they have done with great success to date. (Affidavit of the husband, Appeal Book Vol 3, page 401 – 402, par 78).
…
I fear that the [wife] and the other parties with seemingly limitless resources of Legal Aid and the state will continue to prolong and frustrate this matter until their nefarious ends are achieved. (Affidavit of the husband, Appeal Book Vol 3, page 402, par 80).
With respect to those opposing the husband in the appeal, as was submitted by the husband, and at least one of the previous judgments of the Full Court to which counsel for the other parties referred confirms, the fact that the husband failed in earlier appeals, particularly appeals seeking the disqualification of the trial Judge, in reliance upon matters which are now sought to be raised does not in our view render those grounds unarguable or doomed to fail.
The husband raised the complaint of denial of natural justice in his affidavit material. He said in that regard:-
This is an appeal of right, my case is very strong and I say unassailable but anything can happen in a court case and often does for various reasons, or no reason at all. We are all in the hands of the Full Court and until that body decides my case or finds it to have no merit whatsoever then the elasticity of my resources is unknown. (Affidavit of the husband, Appeal Book Vol 3, page 401, par 75).
This assertion was effectively addressed by counsel for the wife who submitted that:-
Equally, it is difficult to see how the [husband] could have been denied natural and procedure [sic] justice when it was the [husband] who abandoned the trial on 5.9.07 and thereafter, neither appeared nor participated in the continuation of the hearing, nor provided any written submissions thereafter. (Wife’s Submissions, pages 5 – 6, par 14).
One issue addressed by the husband in his grounds of appeal relates to the evidence of Professor N, an expert in psychiatry who gave evidence at trial. (Grounds 7, 10 and 11 of Amended Notice of Appeal, Appeal Book Vol 1, pages 5 – 6). Professor N provided reports detailing psychological evaluations of the parties for the purposes of determining contact with and residence of the child. (Reasons for Judgment, Appeal Book Vol 1, page 73, par 389; page 74, par 394). The evidence given by Professor N rejected allegations of sexual abuse of the child by the husband and did not suggest that the husband should be denied contact with the child. (Reasons for Judgment, Appeal Book Vol 1, page 81, pars 432 & 436). The husband asserts that the evidence given by Professor N was unnecessarily shortened, and was also not taken into account by the trial Judge.
Notwithstanding the absence of an obvious foundation for success in the husband’s grounds of appeal, or his written argument and oral submissions, we are not persuaded that the appeal is entirely devoid of merit. The matters which the husband wishes to agitate with respect to Professor N’s evidence cannot in our view be regarded as necessarily hopeless. In fairness, the husband acknowledged during the hearing of the applications before this Court for security for costs that “this appeal will rise or fall – well it’ll prosper or it’ll fail, I should say, on the evidence of [Professor N]”. (Transcript of 15 May 2008, page 29, lines 14 – 15). On the material which the husband has presented to this Court, that concession was appropriate. No other basis for appellate challenge emerges from the husband’s material.
Notwithstanding our conclusion with respect to this topic, the apparent merits of the husband’s appeal provide greater support for exercising the Court’s discretion to impose security for costs than for declining to do so.
The Costs of the Appeal
The costs of the appeal will be substantial, particularly having regard to the length of the transcript and the conduct of the proceedings to date. Although during the hearing of the applications, the parties agreed that the appeal would be heard in four days, rather than the initial estimate of seven, the estimate of the costs to be incurred remains significant.
It was submitted on behalf of the ICL that “[t]he Appeal material is immense and preparation for the appeal will take hundreds of hours.” (Outline of Submissions – Security for Costs Application – ICL, page 7, par 55). Counsel for the ICL proceeded to identify the appeal materials to date as:-
· 7000 pages of Transcript
· 950 pages of trial submissions
· 109 exhibits (occupying 2 cartons)
· 20 hours of video and tape evidence
· 128 pages of Reasons
· 134 pages of Appeal Submissions (Husband only)” (Outline of Submissions – Security for Costs Application – ICL, page 7, par 56).
Similar assertions were made on behalf of the wife (see Wife’s Submissions, pages 8 – 9, pars 28 – 31; Affidavit of RB, Appeal Book Vol 3, pages 327 – 328, pars 27 – 38) and on behalf of DoCS (see Affidavit of TB, Appeal Book Vol 3, page 309, pars 7 – 10).
Whilst only estimates, the figures suggested as the costs of the appeal for each of the parties are substantial and do not appear to be beyond the range of reasonable solicitor and client costs. Counsel for the wife approximated that the wife’s costs of the appeal would total $66 000 on the basis of a seven day hearing of the appeal. (Appeal Book Vol 3, page 320, par 1; Wife’s Submissions, page 9, par 31). DoCS suggested the figure $22 400 for a four day hearing of the appeal (Appeal Book Vol 3, page 304, par 2) and the ICL provided an estimate for preparing and participating in a four day hearing ranging from $55 065 to $72 392.
In an attempt to reduce the costs of the appeal, it was submitted on behalf of DoCS that the husband ought to “identify those occasions [on which the husband alleged that the trial Judge erred] and make the relevant submissions, with each of the parties entitled to reply.” (DoCS – Summary of Argument in Support of Application in a Case, Appeal Book Vol 3, page 480, par 26). Counsel for the wife and the ICL also, and understandably, complained that the husband had not particularised the portions of the transcript upon which he intends to rely in the conduct of his appeal. The husband agreed to do so.
The husband’s acceptance of having no more than two days during which to present his submissions on appeal coupled with his concession that he would particularise his argument by reference to the transcript, reduce the estimated quantum of costs of the appeal, albeit those costs remain significant. The agreement of all parties to include an electronic copy of the transcript in lieu of hardcopy transcript in the appeal book will also reduce costs, albeit probably to only a minor extent for parties other than the husband.
It is relevant in the context of the costs of the appeal to remember, as we have earlier noted, that if the appeal is unsuccessful and the husband ordered to pay the costs of any other parties to the appeal, on the material the husband has presented to this Court, whatever the resources of the husband might actually be, the recovery of any costs awarded against him would appear highly problematic. Objectively, despite the husband’s assertions with respect to his assets and income, by design or accident, the husband has not revealed the identity or location of any financial resource, or the identity of any source of income which he may have. The combination of other parties to the appeal being put to very substantial costs, and the improbability of such costs ever being able to be recovered from the husband provides considerable support for the applications for security for costs.
Conclusion
As the authorities make clear, in an application for security for costs, the Court must balance a number of competing considerations. A litigant whose appeal is not demonstrably without merit ought not lightly be denied access to justice. Conversely, the parties resisting such appeal ought not be put in a position where they are left financially disadvantaged by reason of an inability to recover their costs from the unsuccessful appellant if the appeal fails.
In this case, albeit only a modest portion of the costs which the other parties to the husband’s appeal will incur in resisting that appeal, we conclude, on balance, that to require the husband to lodge security for costs in the sum of $50 000 would be appropriate. The husband’s own disclosures in relation to his own finances deny him the ability to complain that the obligation to lodge $50 000 would bar his access to justice. It was always open to the husband, a man not unfamiliar with the litigious process, to make a full and frank disclosure of his finances. Having chosen not to do so, and having made the statements to which we have referred during the hearing of the applications to this Court, the husband cannot in our view complain that requiring him to lodge $50 000 is beyond his capacity or otherwise unfair to him.
The three applicants for security each sought differing sums by way of security for their individual costs in the event the husband’s appeal was dismissed and a costs order made in their favour. It appears to us somewhat artificial to make separate security orders in respect of each applicant in the circumstances of this appeal, although we accept if the husband’s appeal is ultimately unsuccessful it does not necessarily follow that each respondent would receive an order for costs, or that if costs are ordered, that the quantum for each respondent would be identical. Accordingly we propose to allow each application, but require only one payment by the husband, and the manner of how that sum will be apportioned in the event the appeal is unsuccessful and costs orders are made be determined at the conclusion of the appeal.
Whilst the other parties to the appeal could argue with justification that the sum of $50 000, particularly if it has to be shared between three parties would cover no more than a fraction of the costs legitimately incurred by those parties in resisting the husband’s appeal, we are satisfied that, on balance, such sum would nevertheless represent a tangible contribution to the costs of each of those parties if they were ultimately successful in the appeal and awarded their costs of the appeal. We are not unmindful of the impact on the duration and ambit of the appeal, and their consequences for the costs of those resisting the appeal, of the concessions of the husband with respect to procedural matters which emerged during the course of the hearing on 15 May 2008.
On balance, to impose security for costs in the sum of $50 000 would, in our view, properly balance the competing considerations to which we have referred.
I certify that the preceding sixty-one (61) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court.
Associate:
Date: 2 July 2008
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