JRS & KM

[2005] FamCA 338

[2005] FamCA 338  JFJRSKM

FAMILY LAW ACT 1975

IN THE FULL COURT OF

THE FAMILY COURT OF AUSTRALIA

AT SYDNEY

Appeal No. EA 90 of 2004
File No. SYF 2848 of 2000

IN THE MATTER OF:

JRS

Appellant/Father

- and -

KM

Respondent/Mother

REASONS FOR JUDGMENT

BEFORE:  Bryant CJ, Finn & Coleman JJ
DATEOF HEARING:          11^th day of November 2004
DATE OF JUDGMENT:     28^th day of April 2005

Name of Appeal  JRS & KM

Appeal Number  EA 90 of 2004

Date of Appeal hearing  11^th day of November 2004

Date of Judgment  28^th day of April 2005

Coram  Bryant CJ, Finn & Coleman JJ

Catchwords:              Respondent’s application for security for costs. 

Principles enunciated in Luadaka v Luadaka (1998) FLC 92-830, as confirmed with respect to applications for security for costs in Jones v Jones (2001) FLC 93-080, applied - appeal is bona fide, however, appellant unlikely to be able to satisfy an order for costs if appeal unsuccessful and likely to be considerable difficulty in enforcing such an order.

R v Lord Chancellor, ex parte Witham (1998) QB 575 cited with respect to constitutional right to access to courts.

An order for security of costs pursuant to s 117(2A) of the Family Law Act could preclude the appellant from pursuing his appeal against orders which, inter alia, deprived him of face to face contact with his child, and also restrict his future access to this Court.

Application refused

Costs reserved

1. On 2 August 2004, after a trial which proceeded for some six days, O’Ryan J made orders in proceedings between KM (“the mother”) and JRS (“the father”) providing that their child, born 26 October 1998, reside with the mother who was to have sole responsibility for the day to day and long term care, welfare and development of the child.  His Honour also made orders with respect to the provision of school reports and other information relating to the child to the father who was to have contact with the child:

“By the father posting cards and gifts to the child at the residence of the mother at intervals of not more than once every four months and also for the child’s birthday and Christmas Day” (Order 8.1)

and:

“Two years after the making of these orders the father may write letters to the child at intervals of not more than once every two months” (Order 8.2)

A number of ancillary orders were made by O’Ryan J which do not need to be referred to for present purposes. 

2. An order was made by O’Ryan J pursuant to s 118(1)(c) of the Family Law Act 1975 (Cth) (“the Act”) whereby the father was:

“... restrained by injunction for a period of five years from the date of these orders and unless leave of a judge of this court has been first obtained from instituting any proceedings for parenting orders as defined in the Family Law Act in respect of the child” (Order 11).

3. On 30 August 2004 the father filed a Notice of Appeal which suggests that he is appealing all the orders made on 2 August 2004.  The pre-argument statement filed by the father is directed only to the orders with respect to the child. 
4. On 23 September 2004 the mother made an application to this Court for orders that within 28 days of the Court’s order the father:

“…. provide security for the mother’s costs in the amount of $20,000.00, such sum to be paid to the mother’s solicitors, to be held upon trust pending the determination of the father’s Appeal”

and that the father’s appeal “be stayed pending compliance” with such order.  The mother’s application also sought that the father pay the mother’s cost of and incidental to the application for security for costs. 

5. The mother’s solicitor swore an affidavit on 23 September 2004 in support of the mother’s application.  In such affidavit the mother’s solicitor deposed to estimated total costs of and incidental to resisting the father’s appeal of $15,680.00 exclusive of GST (paragraph 6). 
6. In support of the application, Counsel for the mother furnished the Court with written submissions which were filed on 8 November 2004.  In such submissions the history of the litigation between the parties was referred to and relied upon in support of the mother’s claim for security for costs, Counsel submitting the litigation to have had “an extraordinary history”.  That history appears at paragraph 47 to 167 of the judgment of O’Ryan J of 2 August 2004.  It was further submitted that there was a “very high probability that the appeal will be dismissed” (paragraph 5(b)). 
7. A number of other submissions were made, some of which we need not expressly refer.  Four of such submissions do however warrant particular reference.  It was submitted that the father’s “financial circumstances are unknown save that on 16 August 2004 the Respondent [the mother] paid him the sum of $20,900.00” (Respondent Mother’s Submissions, paragraph 5(c)).  It was further submitted that the father was “likely [sic] cause the cost to be greater than usual because of the way he conducts litigation” (Respondent Mother’s Submissions, paragraph 5(e)).  It was submitted with respect to the question of whether an order for costs would preclude the father from pursuing his appeal that the father “has the capacity to meet the orders sought”.  It was further submitted that it would be “very difficult to enforce any order for costs against the Appellant [father] by virtue of his history of litigation” (Respondent Mother’s Submissions, paragraph 5(g)) (in the event of security for costs being refused and the mother being obliged to subsequently rely upon an order for costs made after the hearing of the appeal).
8. The father filed an affidavit on 4 November 2004.  With respect to him, much of that affidavit is not relevant to the application for security for costs, whether or not the portions of the affidavit purported to refer to that application as some, such as paragraph 9, of the affidavit did or to other matters.  Whilst the father set out in considerable detail the history of litigation in other courts which resulted in his receipt of $20,000.00 from the mother (the sum referred to by the solicitor for the mother in her affidavit), all the father said in his affidavit (paragraph 17) with respect to such sum was “I no longer have the $20,000 dollars [sic] KM is claiming back of [sic] me for security for costs”.  Relevantly, the father disclosed that he was “currently receiving new start allowance from Centre Link in total of $230 pw” (paragraph 18).  He further deposed to having “just started a temp job with a total of 4 weeks employment, which can be ongoing”, but did not give any indication of the remuneration which he was receiving or expecting to receive from such employment or his intentions with respect to the possibility of such employment being “ongoing”. 
9. A number of documents were attached to the father’s affidavit, none of which is material to the present application.  The father had, on 18 October 2004, filed a “Pre-Argument Statement” in which he sought to articulate more fully the complaints contained in the grounds appearing in his Notice of Appeal.  It is apparent from the Pre-Argument Statement of the father that his complaints relate to “denial of natural justice”, particulars of which are then set out; “reasonable apprehension of bias” in respect of the trial judge; the possibility that “private communications may have taken place” “between the judge and either the mother’s legal representatives or the separate representative for the child appointed by the court”; complaints with respect to the weight given by the trial Judge to the oral evidence of the Court appointed expert, Dr Q; as well as a number of errors of fact (paragraph 19) and “weight grounds”.
10. On the hearing of the mother’s application, her Counsel sought to call on a Notice to Produce which had been served upon the father on 4 November 2004.  It is apparent from its terms that documentation relevant to the father’s alleged disbursement of the $20,000.00, paid to him by the mother in August 2004, fell within the ambit of such notice. When asked by the Court whether he had any documents in response to the Notice to Produce, the father suggested that “there’s no order in place for costs so I find it would be unreasonable for them to ask for all that material.  They haven’t subpoenaed it.  They’ve sent me a letter asking.” (Transcript of 11 November 2004, page 11, lines 25-27).  The father was asked by the Court whether he agreed that he had not “produced any of the material ... that might support – or might take the question of your financial circumstances any further than your affidavit does?” to which the husband replied “That’s correct” (Transcript of 11 November 2004, page 11, lines 30-34).

DISCUSSION

11. The law governing this application is not in doubt, and was considered by the Full Court in Luadaka v Luadaka (1998) FLC 92-830.  The Court there suggested the factors relevant to the exercise of discretion on an application for security for costs.  We respectfully approach the matter by reference to such factors.
12. It is relevant to consider the means of the father in this case to satisfy a costs order in the event that he is unsuccessful on appeal.  As the Full Court said in Luadaka and has been widely held in this country, poverty ought not be a bar to justice but where other circumstances exist to justify an order, this factor may be significant.  In Luadaka the Full Court said:

“It may be relevant to take into account the means of an applicant to satisfy an order for costs if he or she is unsuccessful. Ordinarily the means of the applicant is not alone sufficient to justify an order for costs because of the rule that poverty should be no bar to justice. This is reinforced by s.117 (1). However, the financial circumstances of the applicant do not prevent an order being made if there are other grounds which justify an order. Financial weakness may be relevant, for example, if the applicant is a company. In relation to the means of the respondent, who is the applicant for security, it was held by Goldstein J in Alexander and Alexander (supra) and Gee J in B and B (supra) that the question is whether or not the respondent is able to pay his or her costs. Section 117(2A)(a) requires consideration of the financial circumstances of both parties. However, we do not accept that it will only be in cases where the applicant for security does not have the means to meet his or her costs that an order would be made. In appropriate circumstances an order may be made even if the applicant for security has the means to pay his or her costs.” (per Ellis, Finn & O’Ryan JJ at 85,507)

13. In Jones v Jones (2001) FLC 93-080 the majority of the Full Court (Ellis & Mullane JJ, with whom Kay J largely agreed) made clear that the principles referred to in Luadaka apply to an application for security for costs of an appeal.  Their Honours further said:

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.”

14. The father’s case (as it emerged from his affidavit and his oral submissions to us) appears to be that he has no funds from which he could satisfy an order for security for costs.  A possible source of such funds was identified by the wife’s solicitor in her affidavit (paragraph 5(c)), being a fund of $20,900.  The father concedes that he received such sum.  Beyond asserting that he “no longer” has such sum, the father has, as he conceded during the course of the hearing of the application, declined to provide documentation which might reasonably be thought to be capable of casting useful light on that topic. 
15. So far as the prosects of success on appeal are concerned, the material provided by the father himself provides little basis for optimism.  O’Ryan J delivered an extensive and closely reasoned judgment comprising some 222 paragraphs.  Perhaps the most sanguine prognosis which can be suggested for the father’s appeal is that it is not demonstrably hopeless.  Beyond that we would not venture.
16. The question of whether the father’s appeal is bona fide, genuine and not trivial or a sham can be answered in his favour.  There can be no doubt that the father genuinely believes that the best interests of the child were not served by the orders made by O’Ryan J.  Whether his belief is well founded or not does not detract from the genuineness of such belief.  The absence of prior appeals to this Court in respect of orders made by trial Judges militates against accepting that the father’s appeal is other than bona fide.  The mother’s claim for security for costs is thus not advanced by this factor.
17. It was submitted on behalf of the mother that the “extraordinary history” of the proceedings as recorded by O’Ryan J supported the mother’s claim.  As was discussed during the course of the hearing, the history of litigation which is of greatest relevance for present purposes is the history of appeals.  Whilst there has been a very lengthy history of litigation at first instance, we have not been directed to any previous appeal by the father in respect of any judgment delivered in any of those proceedings.  We thus do not consider the history of the litigation between the parties to be a matter which advances the mother’s claim for security.
18. The matter which potentially assumes considerable significance is whether an order for costs would be oppressive or stifle the father’s appeal.  This factor has a nexus with the first matter which we have considered and our observations in that regard are relevant to it.  The father’s refusal to provide the documentation which had been sought on behalf of the mother and which would have had the potential to validate his claim to “no longer” having the $20,000.00 paid to him by the mother only months earlier, is difficult to reconcile with his assertion that the imposition of security for costs would be oppressive or stifle his appeal.  The father has chosen not to elaborate on why he “no longer” has any of the $20,000.00 paid to him by the mother, if that is the fact, or what has become of it.  Apart from that fund, or what may remain of it, there is no suggestion that the father has assets or income from which he could readily provide security for costs. 
19. The other matter referred to in Luadaka which has significance is whether there would be difficulties in enforcing an order if the mother’s application for security for costs is refused.  Also relevant, although from our perspective less so, is the quantum of any such costs.  The evidence before this Court and the father’s response to the Notice to Produce served upon him on 4 November 2004, combined with what he has asserted to be his financial position, supports the submission on behalf of the mother that there would be considerable difficulty in enforcing any costs order made after the hearing of the father’s appeal. 
20. So far as the amount of costs likely to be incurred is concerned, in our view the question of whether or not security for costs should be ordered is a separate question from the quantum of such costs if such an order is considered to be appropriate.  In our view, before proceeding to consider the quantum of any security for costs which the Court orders the Court must first be satisfied that circumstances justify making an order.
21. Our conclusions with respect to the father’s prospects of success on appeal, the probable difficulty of recovering any costs awarded after the hearing of the appeal from him and the father’s failure to avail himself of the opportunity to demonstrate that he in fact “no longer” has any of the $20,000.00 paid to him by the wife less than three months prior to the hearing of the application provide considerable support for the mother’s case for an order for security for costs.

22.The father relied on R v Lord Chancellor, ex parte Witham (1998) QB 575. In that case, it was held that access to the courts is a constitutional right at common law which can only be abrogated by specific statutory provision. However, s 117(2A) of the Family Law Act expressly empowers the Court to make an order for security for costs.  The power to make an order for security for costs must by necessary implication carry with it the power to stay or dismiss the proceeding in question if the security ordered is not paid.  Nevertheless, the right of access to the Court is an important right and any attempt to restrict that right requires careful scrutiny.

23.Notwithstanding the matters which we have identified as supporting making an order for security for costs, we are not persuaded that such outcome would be justified in all the circumstances.  On the evidence before us, we are concerned that the making of such order could preclude the father from pursuing his appeal against orders which, inter alia, deprived him of face to face contact with his child, and also restricts his future access to this Court.  Not without considerable reservations we thus decline to grant the mother’s application. 

ORDERS

1.That the mother’s application for security for costs be refused.    

2.That the costs of this application be reserved. 

3.Reserve liberty to apply on seven days’ notice with respect to Order 2 hereof.

I certify that the preceding
23 paragraphs
are a true copy of the reasons
for judgment delivered by this
Honourable Court.
A. Coleman
Associate
Date: 28/04/05