Frazier & Valdez
[2016] FamCAFC 163
•16 August 2016
FAMILY COURT OF AUSTRALIA
| FRAZIER & VALDEZ | [2016] FamCAFC 163 |
| FAMILY LAW – APPLICATION IN AN APPEAL – SECURITY FOR COSTS OF APPEALS – Discretionary factors – Rule 19.05(2) of the Family Law Rules 2004 (Cth) – determined that in the circumstances of this case there are justifying circumstances within the meaning of s 117(2) of the Family Law Act 1975 (Cth) for an order for security for costs – quantum of amount ordered. FAMILY LAW – RESPONSE TO APPLICATION IN AN APPEAL – SECURITY FOR COSTS – Application for security for costs by respondent in two appeals – Appellant (respondent to this application) files response seeking orders beyond the scope of the application and which are misconceived – whether appellant ought be permitted to pursue those orders on this application – whether appellant permitted to rely upon in excess of 100 pages of documents attached to his affidavit and a further 1300 pages of documents contained in seven bound volumes – whether that material confined to facts about the issues in dispute on this application and confined to admissible evidence within the meaning of r 15.09(1) of the Family Law Rules 2004 (Cth) – determined that orders sought by the appellant in his response are vexatious and an abuse of process – determined that appellant ought not be permitted to rely upon subject material on the application for security for costs. FAMILY LAW – COSTS – Costs of application on party/party basis. |
Family Law Act 1975 (Cth)
Federal Proceedings (Costs) Act 1981 (Cth)
Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth)
Family Law Rules 2004 (Cth)
| Luadaka & Luadaka (1998) FLC 92-830 Penfold v Penfold (1980) 144 CLR 311 |
Valdez & Frazier [2016] FamCAFC 54
| APPLICANT: | Ms Frazier |
| RESPONDENT: | Mr Valdez |
| FILE NUMBER: | SYC | 2226 | of | 2013 |
| APPEAL NUMBERS: | EA | 30 | of | 2016 |
| EA | 38 | of | 2016 |
| DATE DELIVERED: | 16 August 2016 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Strickland, Aldridge & Kent JJ |
| HEARING DATE: | 16 August 2016 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 15 February 2016 |
| 1 March 2016 |
| LOWER COURT MNC: | [2016] FamCA 68 |
| [2016] FamCA 153 |
REPRESENTATION
| SOLICITOR FOR THE APPLICANT: | Ms Hauptmann (solicitor advocate) |
| FOR THE RESPONDENT: | In person |
Orders
Within twenty-eight (28) days of the date of this order the respondent to this application shall pay to the applicant’s solicitors the sum of $15,000 to be held as security for any costs awarded to the applicant in relation to appeals EA 30 of 2016 and EA 38 of 2016.
In the event that the respondent fails to comply with order (1) hereof then the said appeals be stayed pending payment by the respondent of the said amount.
The respondent pay the applicant’s costs of and incidental to this application as assessed on a party/party basis in default of agreement.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Frazier & Valdez has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Numbers: EA 30 of 2016; EA 38 of 2016
File Number: SYC 2226 of 2013
Ms Frazier
Applicant
And
| Mr Valdez |
Respondent
EX TEMPORE REASONS FOR JUDGMENT
Kent j
On 15 February 2016 Le Poer Trench J made an order dismissing the application of Mr Valdez (“the father”) that his Honour disqualify himself from hearing any proceedings between the father and Ms Frazier (“the mother”) relative to parenting matters. The appeal in EA 30 of 2016 is the father’s appeal from that order.
On 1 March 2016 Le Poer Trench J made orders dismissing the amended contravention application filed by the father on 24 February 2016 and the application of the father for variation of parenting orders. The appeal in EA 38 of 2016 is the father’s appeal from those orders.
Both of the father’s appeals are opposed by the mother.
On 25 May 2016 an Appeals Registrar ordered, inter alia, that these appeals be consolidated and heard together. The appeals have not yet been listed for hearing by the Full Court pending the compliance by both parties with the further directions made by the Appeals Registrar that day.
Before the Court is the mother’s amended application in an appeal filed on 15 August 2016 (amending the application initially filed on 16 June 2016) seeking an order that the father pay to her solicitors by way of security for her costs in these appeals the amount of $20,000. The mother also seeks an order that the father’s appeals be stayed pending his payment of the security for costs ordered, and a further order that the father pay her costs of and incidental to this application on an indemnity basis, or in the alternative, on a party/party basis.
Relevant to the father’s response to the application in an appeal filed on 9 August 2016, and more particularly some of the orders the father seeks; and relevant to the affidavit and exhibits the father seeks to rely upon in opposition to the mother’s application for security for costs, is that on 12 May 2016 the father consented to an order in the following terms:
1 That by way of vexatious proceedings order pursuant to Section 102QB of the Family Law Act:
(a)the father is prohibited from instituting proceedings under the Family Law Act against or in relation to the mother or the child, [child’s name and date of birth], without first having been granted leave by the Court to commence those proceedings pursuant to Section 102QD of the Family Law Act;
(b)that the vexatious proceedings order apply to and include any application made by or on behalf of the father to file any proceedings seeking parenting orders, orders for contravention and/or procedural orders to the Family Court or any court exercising jurisdiction under the Family Law Act, without first having been granted leave to commence those proceedings pursuant to Section 102QD of the Family Law Act.
(emphasis as in original)
Importantly, the father also consented to an order that he pay the mother $16,000 for her costs for various applications and proceedings (as identified in the orders of 12 May 2016) no later than 3:00 pm on 31 May 2016. It does not appear to be in issue that despite demand, other than in respect of a nominal amount, the father has failed to pay these costs as ordered.
Whilst the father was permitted to rely upon his affidavit filed on 9 August 2016 with respect to his oral application made at the outset of this hearing that Strickland J disqualify himself from hearing this application, the preliminary issues arising on the hearing of the mother’s application for security for her costs in these appeals are:
(a) Whether the father is to be permitted, by the orders sought in his response filed on 9 August 2016, to significantly broaden the issues to be considered on this application; and
(b) Whether the father is to be permitted to read and rely upon the vast array of material he seeks to rely upon on the hearing of this application. Attached to the father’s affidavit filed on 9 August 2016 are a number of documents. Whilst the pages of these documents are not consecutively numbered (as required by r 15.12(1)(b) of the Family Law Rules 2004 (Cth)) (the “Family Law Rules”) taken from the respective annexure markings a total of about 171 pages is annexed to the affidavit itself. However, in addition to that material, the father seeks to rely upon, as exhibits to his affidavit, numerous documents comprising in excess of 1,300 pages contained in seven separate bound volumes.
Rule 15.09(1) of the Family Law Rules provides the mandatory requirements for an affidavit. Relevantly, these include that an affidavit must be:
(a) Confined to facts about the issues in dispute; and
(b) Confined to admissible evidence.
It is necessary then to consider what are, legitimately, the issues in dispute on this application.
The issue raised by the mother’s application is in relatively narrow compass. The purpose of an order for security for costs is to secure justice between the parties by ensuring that an unsuccessful party does not occasion injustice to the other. The mother has the onus of establishing circumstances that justify an order as to costs pursuant to s 117(2) of the Family Law Act 1975 (Cth) (“the Act”). The Court has a wide discretion to make an order as to costs (see Penfold v Penfold (1980) 144 CLR 311) but the feature that the ambit of the discretion is wide does not mean that the facts upon which the discretion falls to be exercised are necessarily of wide compass.
Whilst the exercise of the discretion depends upon the relevant circumstances of each case, in Luadaka & Luadaka (1998) FLC 92-830 the Full Court of this Court, after extensive review and reference to authority (and a leading text on costs), identified (at [62]) a (non-exhaustive) list of factors, additional to or in the context of those identified in s 117(2A) of the Act, which may be relevant to an application for security for costs. In summary, transposing that list to the context of an appeal, those factors are:
(a)The means of an appellant to satisfy an order for costs if he or she is unsuccessful;
(b)The financial circumstances of both parties: impecuniosity of the appellant is not alone sufficient to justify an order for costs but nor does it prevent an order being made if there are other grounds which justify an order. As regards the respondent, an order is not confined to cases where the respondent (the applicant for security) does not have the means to meet his or her costs – in appropriate circumstances an order may be made even if the applicant for security has the means to meet his or her costs;
(c)The prospects of success in the proceedings – ordinarily the Court will not undertake a detailed assessment of the likelihood of the appellant’s success unless it can be demonstrated that there is a high probability of success or failure;
(d)Whether the appeal is bona fide, whether it is genuine and not trivial, vexatious or a sham;
(e)Whether an order for costs would be oppressive or stifle the litigation: that prospect does not require a refusal of the application but is often a significant matter;
(f)Whether or not the litigation involves a matter of public importance (if so, this will militate against the making of an order);
(g)Whether or not there has been delay in bringing the application for security and consequent prejudice to the respondent (appellant);
(h)Other relevant matters may include any difficulties of enforcing an order for costs and the amount of costs to be incurred.
Many of the above factors find reflection in r 19.05(2) setting out the matters the Court may consider in deciding whether to make an order for security for costs.
Notably, subparagraph (g) of r 19.05(2) identifies as a potentially relevant factor:
(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;
By reference to the index appearing at the front of volume one of the seven volumes of exhibits the father seeks to rely upon, disclosing what these volumes contain, it is not apparent how any of these documents attest to, or are relevant to, any fact concerning the issues in the mother’s application for security for costs.
It will be readily apparent that it is unnecessary to the exercise of the discretion involved on this application to retrace in fine detail the historical aspects of the parenting proceedings between these parties which culminated in the parenting orders made by Judge Walker, after the trial of those proceedings, on 24 July 2014, nor in relation to the father’s appeals from those parenting orders made.
Turning to the father’s response, save for paragraph 4 (which seeks an order dismissing the mother’s application for security for costs) the orders the father seeks on this application are readily characterised as vexatious and an abuse of process. Without indulging the father by providing a detailed discussion of each of these orders, which he must know reflect a lack of bona fides on his part, the following summary suffices:
(a)Paragraphs 5 to 18 (inclusive) of the orders as sought are essentially a regurgitation of the same or similar orders the father sought in paragraphs 9 to 20 (inclusive) of his application in an appeal filed on 19 December 2014 in appeals EA 111 of 2014 and EA 114 of 2014. At [38] to [41] of the reasons for judgment of the Full Court dismissing those appeals (see Valdez & Frazier [2016] FamCAFC 54) those orders were characterised as showing a lack of bona fides and/or containing presumptive assumptions which were inaccurate and/or constituting an affront to judicial integrity. Nothing has changed save that these same observations apply with greater force to the father repeating his efforts in again seeking the same or similar orders on this interlocutory application;
(b)Paragraph 1 as sought suffers from a number of substantial defects including the following:
(i)It relies upon the presumptive assumption that each of the father’s appeals against the orders of 15 February 2016 and 1 March 2016 respectively will be allowed and that there will in fact be a remitter for rehearing of his contravention application and his application for variation of the parenting orders. That is not an assumption that can be made at this stage pending the hearing and determination of those appeals. Indeed, the correctness of the subject orders is to be presumed unless and until appellable error is demonstrated upon the hearing and determination of those appeals;
(ii)It is assumed (wrongly) that this Court, on this application, would entertain applications for injunctive relief in relation to financial/property proceedings and applications for disclosure in property proceedings when these form no part whatsoever of the subject appeals or of the costs which are the subject of this application for security for costs;
(iii)It purports to contain applications, including applications on behalf of the mother, for costs certificates pursuant to the Federal Proceedings (Costs) Act 1981 (Cth), absent any applications by the mother herself and/or absent any errors of law being established in the proceedings referred to and/or in respect of proceedings where costs orders have already been made or the issue of costs has already been determined and/or in respect of these appeals, the outcome of which is yet to be determined;
(iv)It includes an order seeking that the orders made by consent on 12 May 2016 be set aside notwithstanding the fact that there is no appeal from those orders;
(v)It assumes that this Court would or could legitimately transfer the contravention proceedings and application for variation of parenting orders to the Supreme Court of New South Wales when the father’s appeals from those orders dismissing them are yet to be heard; and none of the criteria for transfer of proceedings from this Court to the Supreme Court of New South Wales pursuant to s 5 of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) are met;
Paragraph 1 of the response as to those orders as sought is thus entirely misconceived and does not legitimately raise any issue for consideration by this Full Court on this application;
(c)Paragraphs 2 and 3 of the father’s response as to the orders there sought suffer from the same or similar problems. Applications for property injunctions or other orders with respect to property proceedings which are not the subject of these appeals do not arise for consideration by this Court on these appeals or on this application;
(d)This leaves only paragraph 4 of the father’s response, seeking an order that the mother’s application for security for costs be dismissed, as the remaining issue. It thus does not add to the issues raised by the mother’s application for security for costs.
It is thus unnecessary and irrelevant to resolution of that sole issue, or to the exercise of the discretion involved, that this Court concern itself with the more than 1,300 pages of documents contained in the seven volumes of material the father seeks to rely upon on this application, nor his affidavit which simply annexes further material not relevant to this application.
Section 97(3) of the Act requires that in proceedings under the Act the Court shall endeavour to ensure that the proceedings are not protracted. That requirement finds reflection in a number of the Family Law Rules including the main purpose of the rules expressed in r 1.04; the means expressed in each of r 1.06 and r 1.07 for promoting and achieving that purpose; and r 1.08 which imposes specified obligations on parties and their lawyers to achieve that main purpose including, for example, the responsibility in subparagraph (1)(j):
(j) To limit evidence to that which is relevant and necessary.
The father does not demonstrate how any of this material meets the requirement of being confined to facts about the issues in dispute, and is confined to admissible evidence, within the meaning of r 15.09(1) earlier referred to.
Pursuant to r 15.13(1) the Court may order material to be struck out of an affidavit if the material is inadmissible, unnecessary, irrelevant, unreasonably long, scandalous or argumentative.
The father ought not be permitted to rely upon that material on this application, nor upon any material annexed to his affidavit.
Resolution of Application
The order of 12 May 2016 lists the eight separate proceedings or Court events in respect of which the father consented to an order that he pay $16,000 in costs to the mother no later than 3:00 pm on 31 May 2016. As already noted the father, in breach of that order, has failed to pay those costs.
In both her case summary document filed on this application and in her affidavit filed 16 June 2016, the mother details the extraordinary number of applications the father has filed since proceedings between the parties first commenced in 2013; as well as his numerous applications filed in appeal proceedings. As the mother deposes, most of the father’s applications have been unsuccessful and as earlier referred to with respect to his application in an appeal filed on 19 December 2014, for example, the father has a history of mounting applications which are untenable. As already noted, on 12 May 2016 the father consented to a vexatious proceedings order pursuant to s 102QB of the Act.
The consequence for the mother, in terms of costs she has had to expend, is obvious. The mother deposes, and it can be accepted, that as at the date of her June affidavit she has been forced to spend approximately $400,000 in legal costs in meeting the father’s multiple applications and faces the likely expenditure of $20,000 in respect of these appeals. There exists justifying circumstances for an order as to costs within the meaning of s 117(2) not least because the father has failed to pay costs as ordered in respect of multiple applications as already referred to.
As the mother deposes, by reference to the father’s financial statement dated 21 March 2016, doubt necessarily attends the father’s capacity to meet the mother’s further costs of these appeals in the event they are unsuccessful and costs are ordered in the mother’s favour. As the mother correctly points out, the majority of the father’s relatively modest property interests overall are held in superannuation.
In terms of the mother’s financial position her financial statement discloses exceedingly modest property interests and that her weekly expenditure exceeds her weekly income from all sources. Whilst it probably cannot be concluded that the mother does not have any capacity to meet her estimated $20,000 in costs of these appeals, her financial position appears precarious. As earlier noted, it is not necessary for the mother to demonstrate actual impecuniosity or a complete inability to meet these costs if there are otherwise circumstances favouring the making of an order.
As regards the prospects of success of the father’s appeals, obviously the appeals are yet to be heard and preliminary views at this stage may ultimately be seen to be inaccurate. However, all that can be observed at this stage is that a high probability of success is not demonstrated by reference to the respective grounds of appeal and summaries of argument supporting those grounds in respect of both appeals. Whilst the father may ultimately, on the hearing of the appeals, demonstrate appellable error, it cannot be concluded at this stage that there exists a high probability of success, nor with respect to the appeal against the dismissal of the contravention application/variation of parenting orders can it necessarily be concluded at this stage that there is a high probability of failure. The appeal against the trial judge’s refusal to disqualify himself is in a different category. Having regard to the bases upon which the application to disqualify was mounted, the nature of that application and the detailed reasons given by the trial judge for rejecting that application, it can reasonably be concluded at this stage that there exists a high probability of failure of that appeal.
The appeal against the dismissal of the father’s contravention application and variation of parenting orders can be taken to be bona fide and genuine. The other appeal against the trial judge’s refusal to disqualify himself, given the grounds upon which that application was originally argued, can be characterised as vexatious.
The father offers no admissible evidence to the effect that an order for security for costs as sought would stifle the litigation. As important as the litigation no doubt is to these parties, it cannot be said that the litigation involves a matter of public importance.
There has been no relevant delay by the mother in bringing the application, nor is there any prejudice to the father, referable to delay, identified by him or is otherwise identifiable.
Potential difficulties of enforcement of orders for costs has already been demonstrated by reference to the unpaid costs the father was ordered to pay by the order of 12 May 2016.
Overall the balance of relevant discretionary considerations in this case weighs in favour of the making of an order for security for costs.
The mother deposes to her likely costs incurred in respect of these appeals to be $20,000. It cannot be assumed at this stage that even if the father’s appeals are dismissed that orders for indemnity costs of each appeal in favour of the mother would necessarily follow. In the course of argument of the application the solicitor for the mother accepted that $15,000 would be a reliable estimate of the mother’s party/party costs of both appeals.
It is reasonable then to allow for the amount of $15,000 as and by way of security for the mother’s costs of both appeals.
As the mother’s application has been successful and by reference to the factors already considered the mother ought have her costs of this application. Those costs ought be ordered on a party/party basis as it is not demonstrated that exceptional circumstances necessary for an order on an indemnity basis exists here.
It ought be ordered that as and by way of security for costs of these appeals the father pay to the mother’s solicitors the amount of $15,000 within 28 days of the date of these orders.
It ought be further ordered that pending the father’s payment of the total security amount ordered of $15,000, these appeals be stayed.
It ought be further ordered that the father pay the mother’s costs of and incidental to this application on a party/party basis.
Strickland J
I agree with the proposed orders of Kent J and with his reasons for those orders.
Aldridge J
I also agree.
Strickland J
The orders of the Court will be:
(1)Within twenty-eight (28) days of the date of this order the respondent to this application shall pay to the applicant’s solicitors the sum of $15,000 to be held as security for any costs awarded to the applicant in relation to appeals EA 30 of 2016 and EA 38 of 2016.
(2)In the event that the respondent fails to comply with order (1) hereof then the said appeals be stayed pending payment by the respondent of the said amount.
(3) The respondent pay the applicant’s costs of and incidental to this application as assessed on a party/party basis in default of agreement.
I certify that the preceding forty-two (42) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Strickland, Aldridge & Kent JJ) delivered on 16 August 2016.
Associate:
Date: 22 August 2016
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