Fleming and Fleming

[2012] FamCA 814

FAMILY COURT OF AUSTRALIA

FLEMING & FLEMING [2012] FamCA 814

FAMILY LAW – SECURITY FOR COSTS – Where the matter has a long history – Where Husband’s Application in a Case has limited chance of success – Where Wife submits it is not a genuine dispute – Where costs have previously been awarded in the Wife’s favour – Husband to pay security for costs – Proceedings stayed if Husband fails to pay

APPLICANT: Ms Fleming

RESPONDENT: Mr Fleming

FILE NUMBER: BRF 83 of 2005

DATE DELIVERED: 21 September 2012

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Bell J

HEARING DATE: 14 September 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Noble appearing for the Applicant Wife (direct brief)

COUNSEL FOR THE RESPONDENT: The Respondent Husband appearing in person

Orders

IT IS ORDERED THAT

1. Within seven (7) days of the date of these Orders, the Husband pay to the Collector of Public Monies in the Registry of the Family Court of Australia at Brisbane, the sum of $8,000, being security for costs in the matter of the Husband’s Application in a Case filed on 27 January 2012.

2. In the event the Husband is unable or unwilling to comply with the payment of security for costs as provided for in Order (1) herein, the Husband’s Application in a Case filed on 27 January 2012 be stayed.

3. The costs of and incidental to this application for security for costs be reserved.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Fleming and Fleming has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRF 83 of 2005

Ms Fleming

Applicant

And

Mr Fleming

Respondent

REASONS FOR JUDGMENT

Introduction

1. Mr Fleming, hereinafter referred to as the Husband, filed an Application in a Case on 27 January 2012 seeking:

   (1)      That the wife refund to the husband, within fourteen (14) days of
             the Order, the sum of Dollars Four Hundred ($400.00) plus the
             sum of Dollars One Thousand One Hundred and Six ($1.106.00).

   (2)      That the husband be granted leave to seek a further Review of the
             decisions made by the Registrar at the Costs Assessment Hearing
             on 29 October and 12 November 2008. Costs Assessment Order
             dated 17 November 2008 of Registrar P. Stevens.

   (3)      That the wife refund to the husband, within fourteen (14) days of
             the Order, the sum of Dollars Thirty Five Thousand ($35,000.00)
             or such other amount as the Court deems appropriate. (Rule
   11.02(2)(b)&(g) and Rule 1.04 of the Family Law Rules 2004 are
             relevant).

2. Ms Fleming, hereinafter referred to as the Wife, filed a Response on 20 February 2012 seeking that the Wife pay to the Husband the sum of $753, that the Orders sought by the Husband be dismissed and that the Husband pay the Wife’s costs of and incidental to the application.

3. The Wife filed an Amended Application in a Case on 27 April 2012 seeking:

   (1)      That within seven (7) days of the date of these Orders the
             Respondent Husband pay into the trust account of the Collector
             of Public Moneys, or such other trust account as ordered by the
             Court, the sum of fifteen thousand dollars ($15,000) as security
             for costs in the matter of his Application filed 27 January 2012,
             being (P)BRF 83/2005.

   (2)That the costs of and incidental to this application for Security
   for Costs be reserved.

   (3)       Such other Order as this Honourable Court deems meet.

4. The Husband filed a Response on 16 July 2012 seeking that such Orders sought by the Wife be dismissed.

Background

1. The Wife commenced property proceedings in August 2004.  Final Orders were made by O’Reilly J on 8 February 2007. On 12 June 2007, O’Reilly J ordered at Order (1), the following:

   1. The husband pay to the wife her costs of and incidental to the s 79 property proceedings between the parties on the standard basis to be assessed if not agreed.

2. The Husband appealed the Costs Order.  This appeal was dismissed by the Full Court on 5 November 2007.  Costs in relation to the appeal were also awarded in favour of the Wife.

3. In relation to the costs of the appeal, the Wife submitted her costs were approximately $11,000.  This figure was disputed by the Husband and the Wife agreed to accept $5,000.

4. In relation to the original proceedings, a costs consultant prepared an itemised costs account on behalf of the Wife.  Subsequently, an amended itemised costs account was prepared by the same consultant.  Such account sought by way of party and party costs was in the sum of $72,463.94.

5. O’Reilly J further ordered at Order (2), the following:

   2. The wife’s costs as so assessed or agreed be paid from the husband’s portion of the net proceeds of sale of the parties’ properties…as calculated pursuant to paragraph 7(d) of the s 79 property order before any payment to the husband pursuant to paragraph 7(e) of that order.

   The Wife’s solicitors therefore retained $72,463.94 in their trust account.

6. The Husband sought to have the itemised costs account assessed. Registrar Stevens made a preliminary assessment on 25 August 2008.  The Husband did not accept the preliminary assessment and sought a full assessment of the itemised bill.  A preliminary hearing was held before Registrar Stevens who issued a Costs Assessment Order on 17 November 2008 ordering the following:

   1.        That the amount payable by the Applicant to the Respondent is
              $55,499.88.

   2.        That the parties bear their own costs of the assessment hearing
              which took place on 29 October and 12 November 2008.

   Notation:  

   A.        That the Respondent’s costs claim of $72,463.94 was satisfied
             from funds held in the trust account by the respondent’s lawyers
             on 29 September 2000, so that the effect of this order is that a
             refund of $16,964.06 to the husband is required.

7. The Husband sought a review of the Registrar’s decision which came before Murphy J on 29 May 2009. Murphy J accepted that the Registrar had made an error in calculations and found that the amount payable by the Husband to the Wife should be reduced by the amount of $13,358.04.  Murphy J noted that an additional mistake was alleged in respect of Item 476 of the Amended Itemised Bill of Costs.  He therefore ordered that, in addition to the $13,358.04 payable, a further amount was payable upon the parties ascertaining the amount used by the Registrar as the figure to be taxed off in respect of Item 476.

8. Murphy J ordered at Order (1), the following:

   (1) The parties shall do all such things, sign all such documents and engage in all such correspondence as is necessary to perform the calculation/s required to ascertain the amount used by the Registrar as the taxed-off amount in respect of Item 476 of the Amended Itemised Bill of Costs in arriving at her assessment dated 17 November, 2008.

9. The parties were unable to reach an agreement on the amount Registrar Stevens had used.  The Husband asserts that the Wife failed to respond to attempts to comply with Murphy J’s Order.  The Wife submits in her Outline of Argument at [14]:

   There are reasonable explanations for the alleged failure (which is not admitted) of the Wife to comply with Order 1 of His Honour Justice Murphy’s orders…

10. The Husband filed the current Application in a Case seeking inter alia that the Wife pay him $1,505.25 arising from the original Orders.

11. A case assessment conference was held on 21 February 2012 before Registrar Brooks.  The parties reached agreement in principle with respect to Order 1, namely that the Wife will pay the Husband $1,505.25.

12. The Wife informed the Husband that if he proceeded with Orders 2 and 3, she would seek security for costs.  The Husband requested time to consider his position.  The Husband advised the Registrar on 8 March 2012 that he would proceed with the application.

Order 1

1. The Wife has agreed to pay the Husband $1506 subject to the Wife being paid the costs of this application.

Order 2

1. The Husband seeks a further review of the original costs assessment Order of Registrar Stevens made on 17 November 2008.  The basis for this is that the Husband has discovered ‘mistakes’ whereby the Registrar has made notations that she intended to tax off certain additional amounts but that such amounts had not been included.  The Husband states he was not aware of these until 28 October 2010 as these Items had not been included in the Registrar’s ‘Summary’ document.

2. The Registrar’s costs assessment has already been reviewed in this Court by Murphy J.  This issue is a question for appeal to the Full Court.

Order 3

1. The Husband seeks in Order 3, $35,000 on the basis of ‘compensation’ in relation to the Wife’s solicitors releasing the funds held in the parties’ joint names in their trust account to the Wife in payment of her original claim for costs.

2. The Husband states that he wrote to the solicitors stating that he did not consent to the releasing of such funds until the matter was resolved by the Family Court.

3. The Husband submits the Wife had use of the funds of $72,463.94 for a substantial period of time, as they were released in November 2007, and she had no legal entitlement to the same.

4. There is no remedy available in this Court for this Order sought by the Husband.

Security for Costs

1. The arguments put forward for Orders 2 and 3 are weak. Order 1 may have some merit and therefore, it is a question of costs.  If the Husband is insisting on continuing in his action, I order that he pay security for costs.

2. The Full Court (May, Strickland & Stevenson JJ) in Lawrence & Tan [2012] FamCAFC 62 considered an application for security for costs recently and addressed the relevant law as follows:

   41.      A decision to order security for costs and the quantum ordered to be paid is an entirely discretionary matter, guided by the legislation.

   42.The provisions of s 117(1) of the Act must be considered in determining an application for security for costs. Namely, subject to s 117(2) and the considerations prescribed in s 117(2A), each party should bear their own costs.

   43.It is also necessary to have regard to the Rules insofar as they address an application for security for costs. In that regard Rule 19.05(2) provides:

   Application for security for costs

   …

   (2)In deciding whether to make an order, the court
              may consider any of the following matters:

   (a)the applicant’s financial means;

   (b) the prospects of success or merits of the
     application;

   (c) the genuiness 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 of Australia;

   (i) the likely costs of the case;

   (j)whether the applicant is a corporation;

   (k)whether a party is receiving legal aid.

3. The Wife stated in her affidavit filed 10 April 2012 at [5]:

   I am seeking an order for Security for Costs because the history of this matter is one characterised by the Husband drawing out litigation by adjournments and late applications, and disputing costs orders and costs assessment orders necessitating the outlaying of further legal costs by me…

4. The Wife stated further at [7]:

   …I believe the latest application is the beginning of a repeat process of the Husband using the judicial system to ‘not rest until he gets his money back’...

   The Wife submits that the Husband is using the court system to harass rather than genuinely seek justice and that this is not a genuine dispute.

5. The Husband submits in his affidavit filed on 16 July 2012 that the Husband is not the one who has drawn out the litigations but the Wife.  The Husband submits that he had to incur additional legal costs as a result of the Wife’s failure to accept her offers and states at [28] that he has:

   …been prejudiced, both, financially and mentally since 28 July 2007 whilst the Wife, by contravening a Court Order, has benefitted greatly by having the use of my funds that she had no legal entitlement to...

6. The prospects of success of the Husband’s application are minimal.  

7. The Wife’s claim for security of costs is considered to be made bona fide where there is a high probability of success in the matter and she has historically had costs awarded in her favour.  

8. In addition to section 117 of the Family Law Act 1975 (Cth), I have also considered rule 19.05(2) of the Family Law Rules 2004 (Cth).

9. I note there are many matters that the Court may consider in exercising the discretion to order security for costs. I have taken such factors into account where relevant.

10. I was concerned about the amount sought in relation to security for costs and put to Counsel for the Wife to provide evidence as to the amount which would be required to be secured.  The Wife’s Counsel put before me evidence of costs which appear to be the costs relating to other proceedings, namely those before Registrar Stevens and Murphy J.  Little has been put before me in relation to the costs for this application.

11. The Wife has submitted that she is seeking the sum of $15,000 for security for costs in the application; an amount which I assume Counsel suggests is fair and reasonable in all the circumstances.  I consider that such a generalised figure is of little assistance and consequently, in doing the best I can, I order that the Husband give security for costs in the sum of $8,000.

I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Bell delivered on 21 September 2012.

Associate: 

Date:  21 September 2012