GREENHILL & CARTER
[2018] FamCAFC 108
•24 April 2018
FAMILY COURT OF AUSTRALIA
| GREENHILL & CARTER | [2018] FamCAFC 108 |
| FAMILY LAW – APPEAL – APPLICATIONS IN AN APPEAL – Security for costs – To adduce further evidence – Where application dismissed. |
| Family Law Act 1975 (Cth) Family Law Rules 2004 (Cth) |
| CDJ v VAJ (1998) 197 CLR 172; [1998] HCA 67 JRS & KM (2005) FLC 93-223; [2005] FamCA 338 Sawer & Sawer [2007] FamCA 140 |
| APPLICANT: | Ms Greenhill |
| RESPONDENT: | Mr Carter |
| FILE NUMBER: | SYC | 8235 | of | 2015 |
| APPEAL NUMBER: | EA | 10 | of | 2018 |
| DATE DELIVERED: | 24 April 2018 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Ainslie-Wallace J |
| HEARING DATE: | 24 April 2018 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 14 December 2017 |
| LOWER COURT MNC: | [2017] FamCA 1047 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms Gillies (SC) |
| SOLICITOR FOR THE APPLICANT: | Blackwell Short Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Hodgson |
| SOLICITOR FOR THE RESPONDENT: | Brendon Dunstan Solicitor |
Orders
The Application in an Appeal filed on 1 March 2018 for security for costs is dismissed.
The Applicant wife is to pay the Respondent husband costs fixed in the sum of $5000 and payment of those fees is to be deferred until the conclusion of the property settlement.
The time in which the Respondent husband is to serve his Appeal Books and to file the balance of the transcripts is extended up to 4pm 26 April 2018.
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 Greenhill & Carter 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 Number: EA 10 of 2018
File Number: SYC 8235 of 2015
| Ms Greenhill |
Applicant
and
| Mr Carter |
Respondent
EX TEMPORE REASONS FOR JUDGMENT
On 14 December 2017 Tree J made parenting orders as between Ms Greenhill (“the mother”) and Mr Carter (“the father”) who, by notice of appeal filed on 11 January 2018 appeals against those orders. The father opposes the order and filed an affidavit supporting that position.
While the parenting matter between the parties has been heard and determined, it seems that the property settlement aspect of their dispute remains to be heard and, it appears it is presently being made ready for trial. There are other applications as yet unheard including the mother’s application for costs of the parenting proceedings and the father has sought a stay of Tree J’s parenting orders.
By an Application in an Appeal filed on 1 March 2018 the mother sought a number of orders, but only one, an application that the father be ordered to pay security for costs in the sum of $43,000 was pressed. Although the order was framed in such a way that if the ordered security was not met, the father’s appeal be dismissed, Senior Counsel for the mother contended that the order should properly be that, in the event that the ordered security is not paid, then the appeal be stayed.
Security for Costs
It is important to bear in mind in considering the issue of security of costs that the father brings his appeal as of right and any attempt to restrict that right requires careful scrutiny (JRS & KM (2005) FLC 93-223 at [22]).
The principles governing an application for security for costs were set out by the Full Court in Sawer & Sawer [2007] FamCA 140 as follows:
19. The power in this Court to make an order for security for costs is to be found in s 117(2) of the Act, which is in the following terms:
If, in proceedings under this Act, the court is of [the] 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.
…
21. The authorities establish that in exercising the discretion to order security for costs, it may also be relevant for the Court to consider in addition to the financial circumstances of the parties and the other five specific matters mentioned in s 117(2A), the following matters:
a) the prospect of success of the litigation;
b) whether the claim for security is made bona fide;
c) whether or not an order for security would stifle the litigation;
d) whether or not the litigation may involve a matter of public importance;
e) whether or not there has been a delay in bringing the application for security;
f) whether there would be difficulty in enforcing an order for costs
(Luadaka v Luadaka (1998) FLC 92-830; Jones and Jones (2001) FLC 93-080; Adult Guardian and Mother's Parents and B and Child's Representative (2002) FLC 93-116.)
These factors are largely reflected in r 19.05(2) of the Family Law Rules 2004 (Cth) (“the Rules”) and relevant to this matter, r 19.05(2)(g) provides that the Court may have regard to any unpaid costs orders when determining the security for costs application.
Prospects of success
Turning then to the prospects of success.
The mother contends, correctly, that all of the grounds of appeal challenge the primary judge’s exercise of discretion and contends that the prospects of the appeal being successful are doubtful. If by that assertion it is suggested that appeals in which the principal or indeed only challenge to the orders is based on asserted errors of discretion are somehow of their nature are doubtful, then I disagree. Although the bar to appellate intervention on a challenge to the exercise of discretion is set high, it is not impossible.
The father notes in his affidavit that in the course of his reasons, the primary judge observed that the decision was “finely balanced” [1].
Senior Counsel for the mother properly conceded that the appeal was not wholly without merit. She did however, submit that in relation to some of grounds, while the primary judge’s finding is the subject of challenge, the underlying facts on which it is based are unchallenged. She argued, and I agree that this makes success more difficult.
However, having considered the primary judge’s reasons, the contended grounds and Senior Counsel’s careful analysis of them, for the purposes of this determination, I am not persuaded that the appeal has no merit. It has some merit.
Financial circumstances of the parties
Dealing now with the financial circumstances of the parties.
The father trades in livestock. He runs his cattle on his father’s farming property where his father also runs stock for sale. The father conducts a trucking business as well. He did not say that he was impecunious nor did he say that if the order for security was made, he could not pay it. He has, in the past paid his legal fees associated with this litigation from his savings and through loans from his parents. He has plant and equipment although it seems that at least so far as the truck and other plant is concerned, they are encumbered.
Nor was it suggested that the mother is impecunious and not able to meet the costs of defending the appeal. She has in fact deposited in her solicitor’s account the funds requested of her to meet the costs of the appeal and she has up until this point met her legal expenses from her own resources.
In her affidavit, the mother adverts to the ongoing proceedings in relation to the property settlement and, to that end, sets out a schedule of the assets and liabilities of the parties and each of them at paragraph 18 which indicated that there are net assets of the parties and each of them of more than $1 million. However, during the course of the argument, it was contended by Senior Counsel for the mother that all was not necessarily as it appeared, and it was contended that the father had failed to accurately disclose his livestock holdings and further that the mother’s schedule of debt did not account for what the father said was further indebtedness in relation to a truck.
It was further argued that the father has been ordered to provide the mother with details of stock bought and sold, had not complied with that order, and some 12 months later a further order was made requiring that information to be given to the mother and it has not been done. The mother said that in that event she issued a subpoena which it was said demonstrated that the father had more livestock than he had previously deposed and that this together with his failure to comply with the orders, raised significant concern and suspicion in her that his true financial position was unclear.
It was further argued that while it may seem beneficial to the father’s financial circumstances to have more livestock than he claimed, it was further said if the mother tried to sell some or all of those cattle to recoup a costs order, because the father runs the cattle on his father’s land, it would be a simple matter for him to disown the cattle or to sell them under his father’s name.
These concerns are no doubt sincerely held and the mother’s suspicions fuelled probably by the father’s failure to comply with orders requiring him to disclose details of his stock trading.
However Senior Counsel conceded that the documents are as yet untested, the father’s evidence has not been given nor challenged and the mother’s concerns rest on what appears from the documents subpoenaed.
The father argued that given the property settlement proceedings between him and the mother are as yet undetermined, if a costs order was made in relation to the appeal proceedings the mother’s order could be satisfied from any order in relation to property.
Of course the force of this submission rests on there being net property for division.
However, the evidence on which the mother expressed concerns and suspicions is, in my view insufficient to persuade me that there is a risk that the father is impecunious, that he does not have funds from which a costs order could be recovered or that the assets, other than livestock have so little equity that the, relatively modest sum sought, could not otherwise be met.
The mother further said in her affidavit that:
·The father was unlikely “…to promptly pay any costs order made against him.”
No costs order has been made against the father in the past which has not been paid, or, even, not paid “promptly”. The basis for this assertion seems to be the mother’s assessment of the poor relationship between her and the father and also her assessment that the father is “not conducting his case responsibly”.
She then concludes that:
54. [the father’s] assets and financial resources are superior to [hers] and exceed the costs of litigation...
Thus, taking her evidence at its highest, the father has the means to meet any costs order against him in the event that the appeal is unsuccessful. Although I take into account the very persuasive arguments made by senior counsel today that there may well be evidence recently come to light which casts doubt on that assertion.
She argues that the father may dispose of assets to defeat any attempt she might make to recover her costs.
That assertion while as I say may well be based on her assessment of her relationship with the father there is no substance to it other than speculation.
It is also to be born in mind that an order for security for costs is not to provide a fund from which the applicant can fund the litigation, it is a provision against injustice that might occur when a successful litigant is deprived of the benefit of a costs order and in my view the evidence has been insufficient to satisfy me that it is necessary to order the father to give security for costs and the application will be dismissed.
I certify that the preceding twenty-nine (29) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Ainslie-Wallace delivered on
24 April 2018.
Associate:
Date: 24 April 2018
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