Matthews and Norris
[2020] FamCAFC 198
•12 August 2020
FAMILY COURT OF AUSTRALIA
| MATTHEWS & NORRIS | [2020] FamCAFC 198 |
| FAMILY LAW – APPEAL – APPLICATION IN AN APPEAL – SECURITY FOR COSTS – Where the application has been brought promptly – Where there is no suggestion that the application was other than bona fide – Where the appeal is not strongly arguable – Where an order for security for costs would unlikely stifle the appeal – Where enforcing an order for costs would be difficult – Where it is appropriate to make an order for security for costs – Order made for the respondent to pay security for the applicant’s costs of the appeal in a fixed sum – Appeal stayed pending the respondent’s compliance with the payment of security for costs. |
| Evidence Act 1995 (Cth) s 140 Trans-Tasman Proceedings Act 2010 (NZ) ss 54(2), 60 Family Law Rules 2004 (Cth) Sch 3 |
| Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337; [2000] HCA 63 Jackamarra v Krakouer (1998) 195 CLR 516; [1998] HCA 27 Johnson v Johnson (2000) 201 CLR 488; [2000] HCA 48 Malcher & Malcher (Security For Costs) (2017) FLC 93-803; [2017] FamCAFC 202 Rice and Asplund (1979) FLC 90-725; [1978] FamCA 84 SPL and PLS (2008) FLC 93-363; (2008) FamCAFC 16 |
| APPLICANT: | Mr Matthews |
| RESPONDENT: | Ms Norris |
| FILE NUMBER: | NCC | 2226 | of | 2015 |
| APPEAL NUMBER: | EAA | 98 | of | 2020 |
| DATE DELIVERED: | 12 August 2020 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney (via videolink) |
| JUDGMENT OF: | Aldridge J |
| HEARING DATE: | 6 August 2020 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 9 July 2020 |
| LOWER COURT MNC: | [2020] FamCA 547 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms Carty |
| SOLICITOR FOR THE APPLICANT: | Oliver Campbell Heslop Lawyers |
| THE RESPONDENT: | Self-represented |
Orders
The respondent pay, by way of security for costs, the sum of $20,000 to the applicant’s solicitors Oliver Campbell Heslop Lawyers to be held by them pending further order of the Court.
The appeal is stayed until the respondent complies with Order 1.
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 Matthews & Norris 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 APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EAA 98 of 2020
File Number: NCC 2226 of 2015
| Mr Matthews |
Applicant
And
| Ms Norris |
Respondent
REASONS FOR JUDGMENT
Introduction
By an Application in an Appeal filed on 31 July 2020, Mr Matthews (“the applicant”) seeks an order for security for the costs of an appeal brought by Ms Norris (“the respondent”).
The parties were engaged in parenting and property proceedings in the Family Court of Australia, which were heard by the primary judge over six days between August and November 2019, noting that the respondent’s submissions were not concluded on the sixth day of the hearing and she was given leave to forward the balance of her submissions to the primary judge. The respondent participated remotely as she has been living in New Zealand since early 2017.
On 9 July 2020, the primary judge made orders for the division of the parties’ property and the parenting proceedings, which had been brought by the respondent, were dismissed. The respondent filed a Notice of Appeal on 17 July 2020, which appeals against the substantive orders made by the primary judge.
As to the property aspect of the proceedings, the primary judge found that the parties had assets in the sum of $1,404,665 which consisted of the proceeds of sale of two properties in Australia, the respondent’s shareholding in two New Zealand corporations, one corporation in the United States of America, some bank accounts, shares, the proceeds of sale of a business asset and motor vehicles. Liabilities were found to exist in the sum of $224,000. Between them, the parties’ had some $552,774 in superannuation. The orders made by the primary judge required the respondent to pay to the applicant the sum of $589,178 within 28 days and declared the applicant to be the owner of the balance of the net proceeds from the sale of the two properties in Australia. The respondent retained the proceeds of sale of a business asset, three overseas corporations, her Australian superannuation and some chattels of lesser value. There was a superannuation splitting order, which in effect gave the applicant the whole of the parties’ self-managed superannuation fund.
The primary judge understood that the above orders effected an approximately equal division of the parties’ net property (at [356]).
As to the parenting aspect of the proceedings, the primary judge was not satisfied that it was in the best interests of the child for there to be a reconsideration of the parenting arrangements (at [381]).
Final parenting orders in relation to the parties’ child who was born in November 2010 were made on 30 June 2017. The applicant was given sole parental responsibility for the child who was to live with him. No orders were made for the child to spend time with the respondent. The respondent filed a Notice of Appeal against those orders on 27 July 2017. On 13 November 2017, the respondent was ordered to pay the sum of $20,000 as security for the applicant’s costs of the appeal. That amount was not paid by the respondent. Further, the respondent did not file and serve the appeal books within the time required and the appeal was deemed to be abandoned.
On 8 March 2018, the respondent filed an application for contempt, which was dismissed on 9 May 2018 with no order as to costs. On 14 May 2018, the respondent filed a Notice of Appeal in relation to the dismissal of that application. On 26 July 2018, the Court ordered that the respondent pay the sum of $15,000 by way of security for the applicant’s costs of the appeal. That amount was not paid by the respondent and ultimately a Notice of Discontinuance was filed in relation to the appeal.
The application
In Malcher & Malcher (Security For Costs) (2017) FLC 93-803, the Full Court described the principles applicable to the present application in the following terms:
14.It is well established that the Court has the power to make an order for security for costs. That power is found in s 117 of the Family Law Act 1975 (Cth) (“the Act”). The Full Court in Atkins & Hunt (Security for Costs) (2015) FLC 93-646 (“Atkins”) at [12] regarded it as well settled that in addition to the matters referred to in s 117(2A) the following matters should also be considered under s 117(2A)(g):
· The prospects of the success of the appeal;
· Whether the claim for security for costs was made bona fide;
· Whether or not an order for security for costs would stifle the litigation;
· Whether or not the litigation may involve a matter of public importance;
· Whether or not there had been a delay in bringing the application for security; and
· Whether or not there would be difficulty in enforcing an order for costs.
See also Palma & Caleffi and Anor (Security for Costs) [2011] FamCAFC 174; Luadaka v Luadaka (1998) FLC 92-830.
15.As the Court in Atkins pointed out at [22], these factors largely mirror the considerations referred to in r 19.05(2) of the Family Law Rules 2004 (Cth) (“the Rules”). We would add to that, in these circumstances, that it is also a relevant consideration whether or not the husband ordinarily resides outside Australia (r 19.05(2)(h)) and whether or not there are unpaid costs orders (r 19.05(2)(g)).
This application has been brought by the applicant promptly after the Notice of Appeal was filed by the respondent. There was no suggestion made that the application was other than bona fide.
Prospects of success of the appeal
The Notice of Appeal filed on 17 July 2020 contains 18 grounds of appeal, which are in very general terms. For example, there are assertions that the primary judge “considered irrelevant matters” (Ground 4) and “erred on the facts” (Ground 5) but the grounds of appeal do not identify what they might be.
Ground 1 asserts that the primary judge’s decision miscarried because of a failure to comply with the Trans-Tasman Proceedings Act 2010 (NZ). In oral submissions at the hearing of this application, the respondent identified s 54(2)(i) and s 60 as the relevant provisions of that Act. Both provisions relate to the recognition and enforcement of Australian judgments in New Zealand. The first section provides that “an order relating to the care, control or welfare of a child” is not registerable in New Zealand (s 54(2)(i)). The second section provides that if a judgment is in respect of different matters, the judgment may be registered in New Zealand in respect of the registerable provisions but not the others (s 60). Without the benefit of any detailed argument on these provisions, the effect of them is that the primary judge’s property settlement orders may be registerable in New Zealand but not the parenting orders. However, the fact that all or part of her Honours orders might not be registerable in New Zealand does not identify any error in the making of them pursuant to relevant provisions of the Family Law Act 1975 (Cth) (“the Act”).
Ground 3 asserts that the primary judge erred by failing to take into account Goods and Services Tax (GST). It is difficult to see the relevance of this submission because the primary judge did not make any orders for the sale of any assets, which might trigger GST obligations. The parties prepared a joint balance sheet for the benefit of the primary judge, which identified the parties’ assets. The parties each contended which assets should or should not be the subject of division by the Court and ascribed their own value to each asset. No mention of GST was made on that joint balance sheet, however in the notes to the balance sheet prepared by the respondent, she did refer to GST in relation to Item 6. The relevant item was a New Zealand corporation in which the shareholding was held entirely by the respondent. The parties’ ascribed different values to that shareholding. The respondent’s note provided:
245.… The valuation was inclusive of GST and the respondent is concerned how the applicant would have gained the knowledge of this valuation. As the company is GST registered as a development company, it would have to pay back the GST component, which is 15% of the sale value.
However, as neither the sale of the shares nor the undertaking of the company was in contemplation, it is difficult to see how there was a relevant GST obligation to be taken into account. It is therefore difficult to see any merit in this ground of appeal.
The respondent also asserts that the primary judge failed to take into account the GST on the sale of a business asset but as her notes to the joint balance sheet indicate, that was not a claim raised before her Honour.
The respondent submits that the primary judge ignored significant parts of her evidence, such as having travelled twice to Australia to see the child but was prevented from doing so by the applicant. However, it was not accepted by the primary judge that that evidence had in fact been given. In the absence of the transcript of the proceedings before the primary judge and the appeal books, I will assume that this ground of appeal is arguable (Ground 8).
The respondent also asserts that the primary judge made a number of findings that were contrary to the evidence called by the respondent. She further submits that in doing so, the primary judge was obliged to be satisfied beyond any reasonable doubt and that had this standard of proof been applied, the primary judge’s findings would not have been made. This was said to be the case because the failure to accept the evidence of the respondent was tantamount to calling her a liar, which should be proven beyond reasonable doubt.
There is a significant difference between a finding that particular evidence should not be accepted and a finding that a person’s evidence was a lie, that is to say, deliberately and falsely given. No doubt extra care and a greater degree of satisfaction should attend findings of the latter kind. However, it remains the case that in civil proceedings, the onus of proof remains on the balance of probabilities with the degree of satisfaction required depending on the nature of the allegations (s 140 of the Evidence Act 1995 (Cth)).
The primary judge did not find the respondent to have given deliberately false evidence. Rather, her Honour simply chose between the competing versions of evidence on particular issues. There is no reason to think that her Honour did not have regard to the provisions and failed to take the nature of the allegations into account in determining the degree of satisfaction required.
Ground 10 asserts that the primary judge was biased. This ground of appeal was explained on the basis that the primary judge criticised the respondent for failing to give complete disclosure but did not make the same criticism about the applicant and that the respondent was not permitted to tender some evidence. I apprehend that there may be some difficulty in establishing that these matters would give rise to an apprehension on the part of a reasonable bystander that the primary judge would not decide the case impartially (Johnson v Johnson (2000) 201 CLR 488 at [11] and Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at [8]).
Ground 13 asserts that the primary judge erred in confining the parenting inquiry to the question of “whether there had been ‘a significant change in circumstances’ rather than considering whether the [respondent] had established a prima facie case of changed circumstances”. Her Honour in fact said:
381.I am satisfied that there is no new evidence, no fresh event or matter left out of the trial which would justify any further exploration of parenting arrangements for the child. Further that it would not be in the best interests of the child for there to be any further litigation unless there was in future a real and relevant change of circumstances.
There is no obvious erroneous identification of the relevant principle in that paragraph. See Rice and Asplund (1979) FLC 90-725 and SPL and PLS (2008) FLC 93-363.
Finally, a number of the grounds of appeal assert unidentified errors or challenges to weight.
Taking these matters into account, overall, I do not accept the respondent’s assertions that the appeal is certain to succeed and that any order for security for costs is otiose.
Whilst I have identified some difficulties that stand in the way of the success of the appeal, I am not prepared to find that it is so devoid of merit as to be futile (Jackamarra v Krakouer (1998) 195 CLR 516 at 520–521). I shall proceed on the basis that the appeal is arguable but not strongly so.
Would an order for security for costs stifle the litigation?
On the findings of the primary judge, the respondent has significant businesses and assets to which she can have access, in order to provide the necessary security. In response, the respondent accepted that she presently lives in a unit in a block of nine units which are owned by one of her New Zealand corporations. However, she says that she does not receive any income from the corporation and that, as she asserted to the primary judge, that corporation has no value. She says that she supports herself through the receipt of government benefits.
No evidence was proffered by the respondent of these assertions. The primary judge said that the respondent conducted the proceedings before her Honour “with cavalier disregard for financial disclosure and candour” (at [8]).
The evidence before me does not indicate that an order for security for costs of the amount claimed would be likely to stifle the appeal.
Would there be any difficulty in enforcing an order for costs?
The respondent presently lives in New Zealand with no apparent intention to return to Australia. The effect of the primary judge’s orders is that she has no assets in Australia which could be made available to meet any adverse costs order. The respondent’s business interests are in New Zealand and the United States of America and her other assets are in New Zealand. Whilst the Trans-Tasman Proceedings Act 2010 (NZ) facilitates the recognition and enforcement of Australian judgments in New Zealand, the applicant will face a difficult and uncertain path in recovering any order for costs in New Zealand. The evidence easily satisfies me that the respondent will not voluntarily pay any order for costs.
Any other matters
On 5 October 2018, the respondent was ordered to pay the applicant’s costs in the sum of $1,980. The applicant’s evidence is that the sum has not been paid. In her oral submissions at the hearing of this application, the respondent variously said that she had paid it, someone had paid it on her behalf, she was confident that it was paid and she was fairly confident that she had paid it but was not in a position to provide any evidence to that effect because of the short time between having been served with this application and the hearing. The respondent said that she had paid it because in one of the earlier judgments where she was ordered to pay security for costs, she was criticised for not making the payment.
Each version of this event confirms that the respondent will not voluntarily comply with a costs order.
Both parties sought to make much of the issue of a truck, which featured prominently in the proceedings before the primary judge. In short, the respondent had said that she had sold it for $10,000. The applicant’s contention was that any sale was a sham and that the truck, valued at approximately $130,000 or $150,000, was now outside of the respondent’s premises in New Zealand. The applicant adduced photos which he said established that. In response, the respondent asserts that it was not the same truck referred to in the proceedings before the primary judge but is another one that has subsequently been bought by her father.
The Court is not in a position to resolve these competing allegations in such an application as this. It is a fair reading of the primary judge’s reasons for judgment that her Honour considered that the truck photographed in New Zealand was the same truck that had been previously owned by the respondent in Australia. However, that is one of the findings of fact challenged by the respondent and, for present purposes, no weight is placed upon it.
Conclusion
The important considerations to my mind are that the respondent lives in New Zealand; has no assets in Australia; will not voluntarily pay any order for costs; and enforcement of any costs order in New Zealand is likely to be difficult. Additionally, the making of an order for security for costs is unlikely to stifle the appeal. Taking these matters into account, it is appropriate and in the interests of justice to make an order for security.
Most unhelpfully, the applicant’s evidence did not include his likely costs of an appeal. The ordinary and expected course is that there be evidence, preferably from the applicant’s lawyer, as to the likely work to be done and its cost. The Court ought not be left without such evidence and, in appropriate cases, the lack of it may be a basis for the dismissal of the application, even if the Court is otherwise satisfied that an order for security should be made.
This Court has been fixing costs in appeals for some years and accordingly is familiar with the costs claimed and allowed in appeals. The current scale rate pursuant to Sch 3 to the Family Law Rules 2004 (Cth) for junior counsel for “other hearings or trials” is presently approximately $3,000 per day. Given the likelihood that counsel would be involved in lengthy preparation of a Summary of Argument in a factually dense case, it would not be unreasonable to expect counsel’s fees to be in the order of $12,000 to $15,000. An allowance should also be made for solicitors’ costs and disbursements. In the absence of appropriate evidence as to what these might be, I am not prepared to make an order for security beyond $20,000. That, however, is unremarkable and I propose to make an order for security for the applicant’s costs of the appeal in that amount. The appeal will be stayed until the security is provided.
I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Aldridge delivered on 12 August 2020.
Associate:
Date: 12 August 2020
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