Manotis and Manotis and Ors (Security for Costs)
[2017] FamCAFC 191
•15 September 2017
FAMILY COURT OF AUSTRALIA
| MANOTIS & MANOTIS AND ORS (SECURITY FOR COSTS) | [2017] FamCAFC 191 |
| FAMILY LAW – APPEAL – SECURITY FOR COSTS – A respondent in an appeal seeks security for costs against the appellant – Delay in making the application – Appeal is bona fide and cannot be said to be without possible merit – Court not satisfied the appellant has the means to meet payment for costs as sought – An order for security would therefore likely stifle the appeal and be oppressive – Application dismissed. |
| Family Law Act 1975 (Cth) s 117(2) Halsbury & Halsbury [2008] FamCAFC 170 |
| APPELLANT: | Mr Manotis |
| 1ST RESPONDENT: | Ms Manotis (Deceased) |
| 2ND RESPONDENT: | Mr Matthews |
| 3RD RESPONDENT: | Mr Blanco |
| 4TH RESPONDENT: | X Lawyers |
| FILE NUMBER: | PTW | 2347 | of | 2004 |
| APPEAL NUMBER: | WA | 13 | of | 2016 |
| DATE DELIVERED: | 15 September 2017 |
| PLACE DELIVERED: | Perth |
| PLACE HEARD: | Perth |
| JUDGMENT OF: | Thackray J |
| HEARING DATE: | 12 July 2017 |
| LOWER COURT JURISDICTION: | Family Court of Western Australia |
| LOWER COURT JUDGMENT DATE: | 26 February 2016 |
| LOWER COURT MNC: | [2016] FCWA 10 |
REPRESENTATION
| THE APPELLANT: | In person |
| THE 1ST RESPONDENT: | No appearance |
| THE 2ND RESPONDENT: | No appearance |
| COUNSEL FOR THE 3RD RESPONDENT: | Mr Guerrini * |
| SOLICITOR FOR THE 3RD RESPONDENT: | Lawley Legal * |
| COUNSEL FOR THE 4TH RESPONDENT: | Dr Dickey QC |
| SOLICITOR FOR THE 4TH RESPONDENT: | X Lawyers |
* Did not participate in the part of the hearing concerning security for costs
Orders
(1)The Application in an Appeal filed by the 4th respondent on 19 May 2017 be dismissed.
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 Manotis & Manotis and Ors (Security for Costs) 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).
| IN THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT PERTH |
Appeal Number: WA 13 of 2016
File Number: PTW 2347 of 2004
| Mr Manotis |
Appellant
And
| Ms Manotis (Deceased) |
1st Respondent
And
| Mr Matthews |
2nd Respondent
And
| Mr Blanco |
3rd Respondent
And
| X Lawyers |
4th Respondent
REASONS FOR JUDGMENT
X Lawyers (“the lawyers”) seek that Mr Manotis (“the appellant”) pay $32,000 security for their costs in relation to Appeal WA 13/2016 (“the Appeal”). They also seek an order that in the event the security is not provided within 14 days the Appeal shall stand dismissed.
Background
The background to the substantive litigation can be found in the judgment of the Full Court delivered on 17 June 2014 ([2014] FamCAFC 103), by which an earlier appeal by the appellant was allowed, and the proceedings remitted for rehearing. The lawyers had represented the appellant’s wife in the proceedings and were the third respondent in the appeal. The lawyers were unsuccessful in opposing the appeal and were ordered to pay the appellant’s costs.
The very lengthy rehearing was conducted by Crisford J. Her Honour’s judgment ([2016] FCWA 10) provides further background, but, for present purposes, it is sufficient to record that one of the issues she was required to determine was an application under s 106B of the Family Law Act 1975 (Cth) to set aside the sale of the appellant’s home (“the property”).
The lawyers had been appointed as trustees for sale of the property. The appellant contended at the rehearing that they had colluded with various parties, including the purchaser of the property, to bring about a sale that had the effect of defeating an anticipated order of the Court.
Crisford J agreed that the sale had the effect contended for by the appellant, but found that the purchaser was a “bona fide purchaser” for value. Such a finding had been foreshadowed by the Full Court when it said at [103], “… as we explained to the [appellant], the property having seemingly been acquired by a bona fide purchaser, the transaction could not be undone” (emphasis added).
As Crisford J explained, the lawyers had an interest in maintaining the sale as they would then recoup the costs incurred in representing the appellant’s wife. Although her Honour was very troubled by some aspects of the conduct of the lawyers (or at least one of their principals), her finding that the purchaser was a bona fide purchaser for value was fatal to the s 106B application.
The appellant’s Notice of Appeal against Crisford J’s decision was rejected by the Appeal Registrar, but on review of his decision, I directed on 9 August 2016 that the Notice should be received for filing.
In my ex tempore reasons for decision ([2016] FamCAFC 200), I said:
17.In arriving at my decision, I note that [the appellant] has indicated that he accepts that the [proposed Notice of Appeal] is not in a suitable form for presentation to a Full Court. He tells me that he is seeking legal advice … in relation to the way his Notice of Appeal can be recast. Speaking for myself, it would be most helpful if the recast Notice is not prepared by [the appellant] after having a chat with a lawyer, but rather is a Notice on which a lawyer is prepared to sign his or her name as representing proper grounds of appeal and appropriate relief.
18.… I have also drawn to [the appellant’s] attention the likelihood that unless he ‘gets his act together’, there will be further applications to have the Notice of Appeal struck out and/or an application for security for costs if the recast Notice does not contain any indication that there is any merit in this appeal.
19.I also proceed on the basis that my preliminary perusal of this Notice of Appeal would indicate that it is largely constructed on an entirely false premise about the options that were available to Crisford J and an entirely false premise that her Honour somehow sought to overturn the decision of the Full Court, because manifestly she did not. However, I cannot exclude the possibility that there might be some merit hidden away in the rambling grounds, even in relation to one of the more peripheral matters about which [the appellant] complains.
I went on to order the appellant to “file and serve an amended Notice of Appeal setting out concise and comprehensible grounds of appeal and orders sought”.
On 13 September 2016, the appellant filed an Amended Notice of Appeal. This document contained 12 Grounds of Appeal, which occupied just over two pages, unlike the original “rambling” grounds which occupied about 15 pages. The appellant had clearly endeavoured to comply with my order.
On 16 November 2016, the appellant provided a Draft Appeal Book Index.
On 3 February 2017, the appellant filed an Application in an Appeal seeking that the appeal not to be heard in the April 2017 sittings in which the matter had been provisionally included. On 24 February 2017, the Appeal Registrar directed that the matter be included for hearing during the sittings in November 2017 with an estimated hearing time of one to two days.
It was not until 19 May 2017 that the lawyers filed their application seeking security for costs. This was, of course, some eight months after the Amended Notice of Appeal was filed, and after the appellant had gone to the bother of providing his Appeal Book Index and making his Application in an Appeal.
In support of the application for security for costs, senior counsel for the lawyers argued that the amended grounds are not concise, and “certainly not by themselves comprehensible and in any event are sometimes not even appropriate as grounds of appeal” (emphasis added).
In his succinct oral submissions, senior counsel otherwise:
a.accepted that the appeal was bona fide;
b.acknowledged that the lawyers are a “thriving firm”, and submitted that their financial circumstances are not relevant to the application;
c.drew attention to the affidavit filed on behalf of the lawyers in which evidence was given of sums of money that the appellant had received amounting to “well over $100,000”;
d.argued that an order for security would not stifle the appeal “in light of what is known of [the appellant’s] financial position”;
e.drew attention to the appellant’s failure to meet a costs orders of $750 made in the lawyers’ favour in November 2016 and the failure of the appellant to pay a costs order of $3,000 in favour of the purchaser; and
f.estimated that the appeal hearing was likely to take at least one and a half days or longer and would therefore be expensive.
When I put to senior counsel that his submissions would suggest that the appellant’s financial position was such that he would be able to afford a costs order if one was made against him at the conclusion of the appeal, he responded by saying he was unaware whether the money the appellant had previously received still exists in his hands.
The appellant failed to file an affidavit in response to the application, offering a number of explanations, including that he was not aware he should do so. The appellant holds a strong sense of grievance about the sale of his home and the conduct of the lawyers, which impedes his ability to articulate his case. He resorts instead to scandalous remarks about the lawyers and their senior counsel. Hidden within these I was able to discern the following propositions:
a.He has no means of meeting an order for costs (if he had such means, he would not be representing himself);
b.If he was required to give security, he could not prosecute his appeal;
c.The application was “an indirect attack on the forthcoming appeal from the firm that does not have a track record of … honesty and decency…”;
d.He had recently sought to have his costs of the earlier appeal assessed, and he was awaiting a date for the assessment. He was claiming $559,000, of which $24,500 were fees paid to his solicitor and counsel;
e.The application for security had not been filed in a “timely manner”; and
f.His legal advice gave him confidence that his appeal had merit.
Relevant principles
The principles governing applications for security for costs of an appeal were summarised in Sawer & Sawer [2007] FamCA 140 (“Sawer & Sawer”) where the Full Court said:
19. The power in this Court to make an order for security for costs is to be found in s 117(2) of the [Family Law Act 1975 (Cth) (“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.)
The Full Court has repeatedly cited these observations of the Full Court in Halsbury & Halsbury [2008] FamCAFC 170:
34. Before concluding we take the opportunity to make the following observations regarding applications for security in relation to the costs of an appeal. Such applications appear increasingly to be taking up the time and resources of the litigants and of the Court. The proper place of such applications and the competing rights that lie at the heart of such applications need to be borne in mind by those seeking them.
35. Appeals are a part of our system of law. They operate as part of the proper checks and balances on the actions and decisions of trial judges. Litigants have a right to appeal in circumstances where they, properly and bona fide, allege error on the part of the trial judge (subject of course to the requirements in certain circumstances of leave to appeal being granted). That right to appeal is an important part of our system of law. It should not be fettered except for good reason.
36. The remedy for those who have a basic right to enjoy the fruits of their judgment and who have that right disturbed by an appeal which is ultimately held to be unmeritorious, is to receive confirmation of the right by the dismissal of the appeal, and, frequently, to have their costs met by the unsuccessful appellant. Although it needs to be recognised in this jurisdiction that s 117 of the Act has the potential to impact on the latter part of that remedy.
37. As we earlier indicated, in the present case both parties put before us relatively detailed arguments in support of, and in opposition to, each ground of appeal. Furthermore, in the present case the wife had already demonstrated her bona fides, by having prepared and filed the appeal books on 7 November 2007. Thus the appeal could well have been heard in the Full Court sittings in which the application for security was heard.
38. Indeed, in our view, and with great respect to the husband and those advising him, the hearing before us of the security application at which it should be noted the husband was able to be legally represented, would have been better devoted to the hearing of the appeal itself.
39. It is also important to stress (but without in any way reflecting on the conduct or intentions of those involved in the present case) that applications for security for costs should not be regarded as a method of funding a respondent’s costs of legal representation in an appeal. This consideration should particularly be borne in mind in this jurisdiction where the fundamental rule regarding costs is that contained in s 117(1) of the Act, being that each party pays his or her own costs.
The Court’s decision
I am not prepared to make an order for security for costs in any sum for the following reasons:
·The appeal is bona fide, and the appellant has previously successfully prosecuted an appeal in the same litigation which led to an order for the lawyers to pay his costs;
·The appellant has made a significant effort, as a self-represented litigant, to articulate appropriate grounds of appeal;
·Before making their application for security for costs, the lawyers waited for eight months after the appellant provided his Amended Grounds of Appeal while in the meantime the appellant prosecuted his appeal;
·The lawyers have failed to satisfy me that the appellant has the means of meeting any payment for costs, let alone an amount as large as $32,000;
·The requirement to make such a payment would in all probability therefore stifle the appeal, and would thus be oppressive;
·The lawyers are a “thriving firm”, whose conduct in the litigation has been the subject of strong adverse findings by the primary judge;
·Although the appellant has failed to meet a modest recent costs order, all earlier costs orders have been met from monies to which the appellant was entitled;
·The appellant is seeking (albeit most belatedly) to have his own order for costs against the lawyers assessed; and while it is not possible to determine how much he might recover, nothing was put to suggest that it would not be significantly more than the $750 the lawyers are owed;
·The appellant was therefore right to say to the lawyers in his (otherwise outrageously offensive) letter of 19 December 2016 that the lawyers should wait for payment until the quantum of his costs against them has been assessed;
·The lawyers sought in their affidavit to show the lack of merit in the appeal by reciting the findings made by the primary judge. However, the appellant seeks to challenge those findings and it is not possible for me, at this point in the process, to say that the appeal lacks merit, especially as the first ground of appeal alleges bias on the part of the primary judge. The merit or otherwise in the grounds will only properly emerge when the submissions are filed.
For these reasons, the application will be dismissed.
I certify that the preceding twenty-one (21) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Thackray delivered on 15 September 2017.
Associate:
Date: 15/9/17
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