Lane & Holmes
[2008] FamCAFC 75
•4 June 2008
FAMILY COURT OF AUSTRALIA
| LANE & HOLMES | [2008] FamCAFC 75 |
| FAMILY LAW - SECURITY FOR COSTS – Wife seeks security in relation to Husband’s appeal from a costs order made against him following property proceedings – Appellant has some means to pay security – Amount of $20,152 claimed is excessive – Application allowed - $3,000 to be provided by way of security FAMILY LAW - COSTS – reserved to the appeal |
| Family Law Act 1975 (Cth) |
| Adult Guardian and Mother’s parents and B and Child’s Representative (2002) FLC 93-116 |
| APPELLANT: | MR LANE |
| RESPONDENT: | MS HOLMES |
| FILE NUMBER: | SYF | 403 | of | 2004 |
| APPEAL NUMBER: | EA | 119 | of | 2006 |
| DATE DELIVERED: | 4 June 2008 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | May, Boland & Cronin JJ |
| HEARING DATE: | 3 June 2008 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 11 October 2006 |
| LOWER COURT MNC: | [2006] FAmCA 1036 |
REPRESENTATION
| APPELLANT: | IN PERSON |
| RESPONDENT: | IN PERSON |
Orders
That the appeal EA119 of 2006 be dismissed unless on or before 4 August, 2008 the appellant husband pays the sum of $3,000.00 by cash or bank cheque by way of security for costs of the appeal to the Family Court of Australia.
That the costs of the application for security for costs be reserved as costs in the appeal.
IT IS NOTED that publication of this judgment under the pseudonym Lane & Holmes 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 SYDNEY |
Appeal Number: EA 119 of 2006
File Number: SYF 403 of 2004
| MR LANE |
Appellant
And
| MS HOLMES |
Respondent
REASONS FOR JUDGMENT
This is the wife’s application for security for costs of an appeal. It is asked that the appellant husband pay the sum of $20,152.00 by way of security and failing such payment that the appeal be dismissed.
The security application is in relation to an appeal filed by the husband from orders made by Le Poer Trench J on 11 October 2006. Those orders were:
1.The husband pay the wife's costs as determined by me in the sum of $15,500.
2.The wife's solicitors be at liberty to account to her forthwith for the sum of $15,500 retained by them in their trust account pursuant to orders made by the court on 6 July 2006.
A costs application was made by the wife relating to a property settlement trial between the husband and the wife heard by the trial judge, Le Poer Trench J.
The background to the costs order being made is explained in his Honour’s reasons as follows:
27.The history of the hearing of the wife's property application emerges from the court record and shows that on 15 December 2004 orders were made ex parte as there was no attendance at court by the husband. In January 2005 the husband filed an application for a stay of the orders of 15 December 2004 and those orders were stayed on 16 February 2005.
28.The orders of 15 December 2004 provided for the sale of the former matrimonial home and after payment of all expenses the sale proceeds would be divided equally between the husband and the wife. The orders made by me at the conclusion of the defended hearing on 12 August 2005 provided for the wife to receive 53.3% of the net sale proceeds. The consequence is that the husband in fact faired better from the orders made undefended than he did following a defended hearing before me.
29.The parties’ financial positions are very similar. At the conclusion of the hearing I found that it was not probable the husband would work in the future other than in some minor part‑time capacity if at all. In relation to the wife I took the view it would be quite some time before the wife would be able to have sufficient strength to deal with full‑time employment. And even then I had reservations about her ability to obtain and keep employment.
30.The husband was in receipt of a disability allowance and the wife was receiving a New Start allowance. The wife was paying rent of $145 per week and given that the property which was occupied by the husband has now been sold I anticipate he is paying rent as well. The wife had a small superannuation fund.
31.The property was sold for $274,500. The wife was to receive slightly more than the husband of the net sale proceeds. This in the scheme of things for each party was a relatively small amount of money. The wife has paid legal costs for her representation and her demeanour was such during the course of the trial that I formed the view that she could not have participated in the proceedings without the assistance of a legal representative. The husband has represented himself throughout the hearing.
32.In the circumstances I am of the view that the husband should contribute significantly to the wife's costs of the hearing concluded by me which gave rise to the orders of 12 August 2005. The costs claimed by the wife's lawyer are $18,401.
The judgment also makes reference to occasions when the husband did not appear in various applications made by the wife when she sought machinery orders to effect the final property orders made in December 2004. His Honour decided that on some of those occasions the husband should pay the wife’s costs:
35.The wife attended at court on 7 June 2006 to apply for a variation of the court orders so that the contract for the sale of the property at $274,500 could be proceeded with. The husband did not appear on that day and in my view the wife, being successful in that application, should be entitled to costs. The costs claimed by the wife for that occasion are $4,000.
36.The wife was represented in the hearing before me on 28 September and in respect of that attendance she sought orders for costs in her favour in the sum of $4,000. In my view the wife is entitled to some of her costs of 28 September 2006 given that she has been successful in a number of her costs applications.
Ultimately his Honour determined:
37.Rather than have the parties attend before the court for further appearances and more delay I propose to make an assessment of the costs which the husband should pay. It seems to me that the claim for costs as articulated by the wife on each occasion are very reasonable and well within the parameter of a costs assessment which might be made by an assessor. I propose to make an order which is in fact less than the amount claimed by the wife and substantially less thereby giving the husband a significant discount on my estimate of the amount which an assessor would award in the case. Of those claims for costs which I have determined the wife should succeed on she claims a total of $28,401. I propose to order that the husband pay the wife the sum of $15,500 which is the amount ordered on 6 July 2006 to be deducted from the husband's share of proceeds of sale of the former matrimonial home prior to distribution to him.
Application
In paragraph 2 of her affidavit the wife explains that the quantum asked is on the basis of $340.00 per hour for court appearances and three days preparation for the appeal. For reasons which will become apparent later it is not necessary for us to say more about this other than to observe that the amount claimed seems excessive to respond to an appeal against an order for costs. As is explained in the affidavit the wife has prepared the document herself.
The wife explains that she is unable to retain lawyers unless security is paid. The moneys that she received from the property settlement have been entirely expended purchasing a house and she otherwise has no savings and no other means.
In addition, the wife says that she is incapable of representing herself in court by reason of her state of health caused, she says “…by many years of physical and mental abuse inflicted on me by Mr. [Lane].”. We understand that she says that her poor health has been exacerbated by the numerous court appearances since 2004, the need to obtain AVO’s and various other actions of Mr Lane which have caused disruption.
It is of some note that in paragraph 31 of the judgment to which we have referred the trial judge was of the view that “The wife has paid legal costs for her representation and her demeanour was such during the course of the trial that I formed the view that she could not have participated in the proceedings without the assistance of a legal representative.”
In essence the wife submits that in view of the following matters an order for security should be made:
a) The husband has no prospects of success and the order of the trial judge was correct and in particular.
·The wife first sent an offer of settlement to the husband on 17 May 2004. The husband failed to appear at various court appointments and hearings following such offer and orders were ultimately made in his absence.
·The property orders were stayed however the husband received less by way of property settlement than he would have received as a result of the orders made in his absence.
·The costs incurred in the trial were in part due to the lack of cooperation by the wife.
b) The wife refers to another appeal commenced by the husband, after the granting of an extension of time to appeal, which he withdrew, an appeal against Apprehended Violence order, and civil proceedings in the Wollongong Local Court. The wife asserts the latter proceedings were heard on 28 and 29 February 2008 respectively and the husband failed to appear.
c) The husband has instituted this appeal for improper reasons including to cause the wife harm.
The Respondent’s position
The appellant’s financial position, as he told us is that he is dependent on a disability pension. Of the approximately $105,000 received by way of property settlement he has less than $200 in the bank and shares he values at approximately $18,500. Although he is not impecunious, his financial circumstances are poor. However, the real question is whether he would pay costs, if ordered without further application by the wife and costly proceedings.
The appellant filed an affidavit by leave. It raised a number of controversial matters connected with the long history of property proceedings but has little, if any, relevance to this application.
The appeal
It is necessary for us to consider the grounds of appeal to determine whether the appeal has some prospects of success.
The grounds as amended by the appellant are difficult to understand but seem to suggest that his Honour should not have made the costs orders because they were in contradiction to earlier orders made by him on 28 September 2006. Without involving ourselves in the necessary arguments related to the appeal it seems from the transcript that at no time did the appellant complain of this to the trial judge during the hearing in relation to costs when it was apparent that he was given an opportunity to speak at some length.
The appellant otherwise takes issue with a number of the findings made by the trial judge in concluding that the appellant should pay the costs and asserts that errors have been made by him. Although it could not be said, especially without hearing the argument that there is no merit in the appeal, it must be observed by us on this application for security that the grounds of appeal at the least are difficult to understand and do not immediately reveal matters which usually would lead to the Court reversing a decision of a trial judge in relation to orders for costs. To succeed in an appeal in relation to costs is notoriously difficult. (See Browne & Green (2002) FLC 93-115 at p.89,162)
Principles
The principles relating to security for costs are well established (See Luadaka (1998) FLC 92-830, Jones & Jones (2001) FLC 93-080 & Adult Guardian and Mother’s parents and B and Child’s Representative (2002) FLC 93-116). The power in this court to make an order for security for costs is found in s 117(2) of the Family Law Act (1975) (Cth). The provisions of s 117(2A) must also be considered.
In Luadaka (supra) which was concerned with the making of an order for security in relation to the costs of proceedings at first instance, the Full Court made the following observations:
39. An order that an applicant provide security for costs may be made in appropriate circumstances. However, it must be established that there are circumstances justifying the making of such an order. In considering whether to make such an order regard must be had to the provisions of s 117(2A). The Family Law Act does not separately list factors which should be taken into account when dealing with an application for security for costs of a pending application for relief pursuant to provisions of the Act.
…
61. In our opinion, when dealing with an application for security for costs the general rule provided for in s 117(1) applies, namely that subject to s 117(2) each party to proceedings shall bear his or her own costs. However, if the court is satisfied that there are circumstances that would justify an order then the court may, subject to s 117(2A), make such order for security for costs as the court considers just. It is not necessary to establish that there are special circumstances. However, it is necessary to establish that there are justifying circumstances. The decision to order security for costs is discretionary, both as to whether to order security, and as to the amount to be secured.
62. The purpose of an order for security is to secure justice between the parties by ensuring that an unsuccessful party does not occasion injustice to the other. In considering whether or not to make an order, apart from those referred to in s.117(2A), matters which may be relevant include the following:
62.1It 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.
62.2The prospects of success is a relevant matter to take into consideration: Parkinson & Co Ltd v Triplan Pty Ltd (supra). 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. [85508]
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.
62.7Other relevant matters may include any difficulties of enforcing an order for costs and the amount of costs to be incurred.
The Full Court said in Jones (supra):
23.If an appeal appears to have little merit, a court may be more disposed to make an order for security for costs. Whilst we have not had the benefit of submissions on behalf of the wife, the appeal does not appear to raise matters of principle.
In Beaumont & Cross [2007] FamCA 1129 where the appeal was also in relation to a costs order the judgment of Kay J referred to these authorities and concluded:
8.In this case, the issues that weigh upon my mind in relation to security are:
·the somewhat modest amount in dispute in the proceedings;
·the difficulties that the wife has faced in previous aspects of the proceedings in an endeavour to enforce judgment which ultimately have been met but only after either time delays or enforcement proceedings; and perhaps more particularly
·the limited prospects of an appeal against a costs order.
9.The order the subject of the appeal is a very discretionary order and the authorities would indicate that it is only in unusual circumstances, to say the least, that the court is likely to interfere with a costs order.
10.Given that background to the matters and the matters that I think ultimately are relevant, it is my view that some security should be provided to assist in the event that an order for costs, in the event the appeal is unsuccessful, follows the appeal. There is a high probability with a discretionary appeal that if it is unsuccessful some costs order will be made.
Conclusions
In our view, it would be unjust to require the wife to defend this appeal without some security for costs. We accept that it may be difficult for her to retain lawyers without such security in place.
The appellant has some means to pay security, which will be held on his behalf pending the outcome of the appeal. We see that this case has similar features to those described by Kay J in Beaumont & Cross.
The quantum claimed is excessive in the circumstances. The amount to be ordered for security for costs is intended to relate to the sum likely to be ordered should the appeal fail and a costs order made. It is apparent from the appeal books, which have been filed by the husband, that the appeal being an appeal against costs orders, is limited in scope. In these circumstances we consider the sum of $3,000 should provide adequate security for the wife’s costs.
We would make the order that unless the appellant husband, within two months of this order provides security for the wife costs of the appeal in the sum of $3,000.00 the appeal be dismissed.
Costs of the application for security
The costs of the application should be reserved as costs in the appeal. We will order accordingly but add that should the appellant fail to lodge security then the wife would be entitled to make an application asking for the costs of and incidental to the application for security.
I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court
Associate:
Date: 4 June 2008
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