MIL & EL

[2005] FamCA 1257

FAMILY LAW ACT 1975

IN THE FULL COURT
OF THE FAMILY COURT OF AUSTRALIA
AT MELBOURNE

Appeal No. SA36 of 2004
File No. ML10522 of 1996

IN THE MATTER OF:

MIL

Applicant

- and -

Respondent

REASONS FOR JUDGMENT

BEFORE:                 Rowlands, Holden and May JJ
HEARD:                   21st day of October 2004
JUDGMENT:           30^th day of December 2005

COSTS - SECURITY FOR COSTS APPLICATION - Factors to be taken into account when determining whether to make an order for security for costs

For determination is the applicant husband's application filed on 2 September 2004 seeking the following:
1.That the respondent wife do pay to the applicant husband's solicitors within 14 days as and by way of security for costs of her appeal the sum of $82,500.
2.That in the event that the respondent wife fails to make payment in accord with paragraph 1, her appeal be stayed.
3.That those aspects of the respondent wife's appeal pertaining to the refusal of the trial judge to disqualify himself on the basis of his association with [Senior Counsel for the applicant husband] be heard first in time.
Background
On 20 February 1998, the respondent wife filed an application seeking orders for property settlement and lump sum or spousal maintenance as the Court deemed appropriate. On 16 July 2003, she filed an application seeking that Guest J be disqualified from further hearing the contested property and spousal maintenance applications between the parties. Guest J delivered judgment on that application on 24 July 2003 and dismissed it.
On 25 May 2004, Guest J published his reasons for judgment in respect to the financial matters and ordered inter alia:
1. That the respondent wife's application for property settlement be dismissed.
2.That the applicant husband be at liberty to enter into a composition with his creditors pursuant to Part X of the Bankruptcy Act 1966 (Cth) ("the Bankruptcy Act").
3.The applicant husband pay spousal maintenance to the respondent wife in the sum of $1,907 per month (for a period of 2 years or until the wife obtains full-time employment).
On 22 June 2004, the respondent wife filed a Notice of Appeal against the orders of Guest J made on 25 May 2004. On 16 July 2004, the applicant husband filed a Notice of Cross-Appeal against those aspects of the orders made on 25 May 2004 that relate to spousal maintenance.
The matter came on before Kay J at a procedural hearing on 1 September 2004. His Honour made inter alia the following orders:
"1. That the issues of:
(a)whether the trial Judge erred in rejecting the wife's applications made during the trial that he disqualify himself from hearing the matter; and,
(b)the husband's application that the wife provide security for costs of the balance of the appeal
be heard as preliminary issues by the next sittings of the Full Court in the week commencing 18 October 2004.
…
8.The further hearing of the directions necessary for the balance of the appeal and cross-appeal be adjourned to a date to be fixed after the outcome of the matters referred to the Full Court by these orders is known."

On 18 October 2004, the respondent wife filed a Notice of Discontinuance with respect to the bias aspect of her appeal. The only matter remaining for determination by us is, therefore, the applicant husband's application for security for costs. Upon the hearing of the application, the amount sought as and by way of security was amended to $40,000.

The trial before Guest J

At the trial before Guest J, it was the applicant husband's case that his liabilities vastly exceeded his assets and that he had received professional advice that his interests were best served by entering into an arrangement pursuant to Part X of the Bankruptcy Act. The respondent wife's position, on the other hand, was that the applicant husband had ownership or control of a number of interlocking companies with a value well in excess of $2,000,000. It is asserted by the applicant husband that the credibility of each of the parties and of the witnesses called on their behalf was fundamental to the determination of the case. The respondent wife's case was based upon the evidence of valuation of her witness, [JEM], an accountant.
The applicant husband relied upon the evidence of a chartered accountant, [PAR]. His evidence appears to be to the effect that the methodology adopted by [JEM] was fundamentally flawed and not an accepted method of valuation. He ascribed no value to the entities that [JEM] valued at well in excess of $2,000,000.
His Honour, in referring to the evidence of the respondent wife, said as follows:
"34.In coming to my determination I have regard to the contents of the wife's Order 30 Affidavits filed on 28 February 2003, 18 March 2003 and her oral evidence before me. The cross examination by [Senior Counsel], who appeared on behalf of the husband was revealing. In the result, I was left with an unfavourable impression of the wife as a witness."

In contrast, when referring to the applicant husband's evidence his Honour said as follows:

"238.The husband was cross-examined over some four days, at times in most challenging circumstances whereby he was expected to remember and explain many entries in the financial statements of different commercial entities. He responded earnestly to the wide ranging issues put to him. In my view, he was an impressive witness and one upon whom I can rely. I have listened carefully to all he had to say and observed him in the witness box. He was able to respond to complex issues of an accounting nature and had a ready understanding of relevant matters. He retained his composure and equanimity despite what appeared at times to be nit-picking questions with borderline relevance. In assessing him as a witness together with his credibility, I look also to the overall impact of his evidence and I have also taken into account the evidence of other witnesses who corroborated much of what he had to say."

Insofar as [JEM’s] evidence was concerned, his Honour said that he had "no hesitation in rejecting outright the valuation advanced by [JEM]". He set out the reasons for arriving at that conclusion in para 362 of his judgment. His Honour found [JEM] to have demonstrated gross partiality and lack of independence and he regarded his valuation as incompetent and utterly unsustainable.
The trial Judge concluded:
"369.There is, in my view, force in the submissions of [Senior Counsel for the applicant husband] that [JEM’s] approach contradicted “… virtually every fundamental of professionalism, objectivity and independence”. The evidence to support that criticism is abundant, particulars of which I have discussed earlier in this judgment. Having heard all that I have over the totality of the trial, it appears to me that [JEM] endeavoured, and in a most unsatisfactory way, to create an asset in circumstances where it did not, having regard to proper valuation techniques, exist. The challenge to his evidence and methodology submitted by [Senior Counsel for the applicant husband] has, in my view, merit."
In stark contrast, when referring to the evidence of [PAR], his Honour said:
"… In coming to my determination, I was greatly assisted by the detailed affidavit of [PAR], and his helpful oral evidence in court. Overall, I found him to be an impressive witness who was able to offer an objective and professional analysis of those issues to which he turned his attention."
His Honour also referred to the evidence of [MV] who had recommended that the applicant husband's proposal for a Deed of Arrangement was in the best interests of the applicant husband's creditors. In referring to his evidence his Honour said:
"328. As I said, I was impressed with the evidence of [MV] and the cross examination, (save for those matters concerning the husband’s guarantee of certain debts) in my view failed to make any inroads of substance to that deposed to by [MV]. He is, as [Senior Counsel for the applicant husband] submitted, a vastly experienced insolvency expert. He was independent, and in my view, he undertook an appropriate and detailed enquiry into the husband’s financial situation. I reject the submission of [counsel for the respondent wife (during the trial)] that the debts alleged by the husband were a “mirage”."
He thus accepted that [MV] had made extensive investigations and searches and found that the applicant husband had no significant assets.
Ultimately, his Honour concluded:
"298. In my view, [PAR], was a very impressive witness indeed, and one upon whom I can safely rely. I have no hesitation in accepting his criticism of the methodology adopted by [JEM] in his valuation of the four entities, and about which I have more to say later in this judgment. He was faced with financial documents and summaries being produced and shown to him without notice in the witness box. In that situation he demonstrated most adequately indeed his expertise. I accept his evidence overall, and in particular where he is in conflict with [JEM]."
His Honour made a number of serious findings about the relationship between [JEM] and [MB] respondent wife's solicitor, how the valuation of [JEM] came to be prepared and concerning a conversation of [JEM] wherein he had revealed that the case was being proceeded with as a means of placing pressure on the applicant husband's father to offer a settlement to the respondent wife. He found:
"… I do not accept that evidence for I am satisfied, on all that I have heard that there exists between them an association, or relationship that dispossesses [JEM] of his “independence” in the professional expert witness sense."
Insofar as the bona fides of the respondent wife's claim for property settlement was concerned, his Honour said:
"320.[MV] made it clear when examined by [Senior Counsel for the applicant husband] that when [JEM] visited his office (in September 2002) their’s was a cordial meeting and that he provided for [JEM’s] inspection all files in his possession. He said that [JEM] asked a number of specific questions in relation to the detailed information provided and that towards the end of the meeting there was a discussion of the overall position, as he understood it to be. In relation to that, the following evidence took place:
“What was that discussion? … Generally there was a discussion as to what it was all about and how long it was going to take, that sort of thing, and I actually said to [JEM], ‘well, what do you hope to get out of this?’ you know, ‘How are you going to get paid out of it?’
What was his response to that inquiry? … His response was that he and Issac dealt with these things all the time and that they just pushed on and on and eventually the family generally settled.
When he made reference to Issac, first of all, did he say the surname of that person? … No, he did not.
Who did you understand Issac to be? …[MB].
When this comment was passed as to pressing on the family and the like, what was your response to [JEM]? … I made no real response to that particular comment.” (my emphasis) [T 204]
I accept that evidence."

Applicable law

The law relating to security for costs was conveniently summarised by the Full Court in Luadaka v Luadaka (1998) FLC 92-830. The Court said, at 85,507:
"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:
62.1 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) [(1997) FLC 90-257] and Gee J in B and B (supra) [(1986) FLC 91-749] 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.
62.2 The prospects of success is a relevant matter to take into consideration: Parkinson & Co Ltd v Triplan Pty Ltd (supra) [(1973) 1 QB609]. 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.
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.
62.7 Other relevant matters may include any difficulties of enforcing an order for costs and the amount of costs to be incurred.
63. We do not suggest that the above matters are exhaustive of what may be taken into account. However, such matters may be relevant to the exercise of discretion."

Discussion

Before summarising the case for each of the parties, it is appropriate that we set out the respondent wife's grounds of appeal that do not relate to bias.
"1.His Honour erred in failing to give any or any proper weight to the evidence.
2.The findings of His Honour were against the evidence and the weight of the evidence.
…
4.His Honour erred in finding that;
a.the companies referred to in Annexure JEM-10 and exhibit 12;
b.the [S] group of companies and [G];
c.the New South Wales litigation;
had no value.
5.His Honour erred in failing to accept the evidence of the Wife.
6.his Honour erred in accepting the evidence of the Husband the witnesses called on behalf of the Husband
7.His Honour erred in failing to accept the evidence of [JEM], Forensic Accountant, called on behalf of the Wife.
8.His Honour erred in failing to find that the Husband had not made full and frank disclosure of all financial matters.
9.His Honour erred in failing to adjourn the further hearing of the case to enable the appellant to have full discovery and inspection of the Husband's financial affairs.
10.His Honour erred in failing to allow the Wife to re-open her case to file a Form 17 - Financial Statement and admit evidence concerning the Husband's entitlement under the Will of the Husband's father.
11.His Honour erred in discharging all arrears of spousal maintenance and failing to award arrears of spousal maintenance.
12.His Honour erred in awarding ongoing spousal maintenance limited only to two years.
13.His Honour erred in failing to make a Departure Order under s 117(2) of the Child Support Assessment Act.
14.His Honour failed to accord the appellant natural justice."
The applicant husband's case may be summarised as follows:
(a)the respondent wife is impecunious and in the event that the Full Court dismissed her appeal, he would not be able to enforce any order for costs against her;
(b)there is much doubt about the bona fides of her appeal; and
(c)there is very little prospect of the appeal succeeding.
It appears to be common ground that the respondent wife has no assets or income from which she could satisfy any order for costs. It is apparent, therefore, that to make an order for security for costs has the potential to be oppressive or to stifle the litigation.
In Jones and Jones (2001) FLC 93-080, the Full Court said at 88,377:
"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 Enterpreises Pty Ltd v The 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 Limited (unreported, Federal Court of Australia, 1 July 1993).
22. The fact that the respondent 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."
The Court went on to say:
"23. If an appeal appears to have little merit, a court may be more disposed to make an order for security for costs."
The grounds of appeal as set out earlier do not appear to raise matters of principle or public importance. The question remains, however, whether or not the appeal has merit. In assessing the merits of the appeal we intend to divide the grounds of appeal into two categories. The first category relates to those which relate to weight that his Honour gave to certain of the evidence and those which assert his Honour erred in making various findings of fact and attach his orders with respect to financial matters, those being grounds 1, 2, 4, 5, 6, 7, 8, 10, 11, 12 and 13. The second category relates to the procedural fairness grounds (grounds 9 and 14).

Guest J's judgment, following a 17-day trial, covered 196 pages. It is a most detailed and comprehensive judgment. His Honour made strong, positive findings as to the strength and credibility of the evidence of the applicant husband and his witnesses. In stark contrast, he made equally strong findings with respect to the respondent wife's lack of credit and damning findings with respect to the evidence of her main witness [JEM]. It is notoriously difficult to succeed on an appeal where the grounds involve arguments over weight given by a trial Judge to certain aspects of the evidence. It is equally difficult to attack findings of fact where the evidence is such that it was open to his Honour to reach those findings. No ground of appeal asserts that his Honour's findings were not open to him.
Whilst we cannot conclusively say that the appeal, insofar as it relates to the grounds in the first category, is entirely devoid of merit, we are of the opinion that the prospects of success are not great for reasons that will become apparent.
Senior Counsel for the applicant husband argues that the respondent wife's appeal is not brought bona fide. We feel that there is considerable force in that argument given the passage from his Honour's judgment set out in para 16 of these reasons, against which there is no appeal.
Counsel for the respondent wife advances the following argument:
"BONA FIDES
6. 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. A bona fide claim with prospects of success should not be subject to a security for costs order. It is not clear whether the husband goes so far as to suggest that the respondent wife's appeal is not made in good faith. The husband is certainly critical of the procedure adopted by the respondent wife's advisers in prosecuting her case at trial. The husband relies on the admission supposed to have been made by one of the respondent wife's advisers that "they just pushed on and on and eventually the family generally settled". The husband argues that this amounts to an admission that "the Wife's claim for settlement of property was being persisted with as a pressure tactic designed to cause the Husband's father to advance settlement funds in favour of the wife." It is curious that the husband would suggest that it was reasonable for the wife's advisers to expect that his father would advance settlement funds on his behalf. The husband's father died during the course of the proceedings. His will appears to provide for most members of two generations of the family but appears to avoid making the husband a direct beneficiary. As admitted by the husband's solicitor, by (sic) "by strange coincidence" the husband was the only person of two generations that was "skipped". " (footnotes omitted)
This brings us to the argument advanced by counsel for the respondent wife, which is as follows:
"5. It was part of the wife's case at trial that the husband had manipulated the assets of the marriage. The wife's contention for appeal is that the husband's manipulation of the assets, and his subsequent failure to make disclosure sufficient to trace those assets, has adversely impacted on the wife's current financial circumstance. The wife alleges a nexus between her impecuniousity (sic) and the husband's conduct. But for the conduct of the respondent, the litigant would have been financially secure. The wife was not impecunious before the husband undertook extensive restructuring of his financial affairs post-separation. Great caution must be taken where the impecuniosity of one party may be attributable to the conduct of another party for in such cases an order for security might result in a denial of justice. Where a bona fide claim appears to be made which is not manifestly lacking in substance as to the connection between the plaintiff's impecuniosity and the defendant, security for costs should not be ordered. (footnotes omitted)
The difficulty with this argument, in our view, is that it is unsupported by any of his Honour's findings.
Insofar as the second category of the grounds of appeal is concerned, we are unable to determine the relative strength or weakness of those grounds.
As we understand the respondent wife's case, it is that the applicant husband had manipulated his assets and that it became apparent during the course of the trial that the applicant husband had failed to disclose his true financial circumstances during the course of the trial. The result was that contrary to the findings of the trial Judge, none of the valuers, including [PAR], could put a value on the assets.
In support of that proposition, the following exchanges during the cross-examination of [PAR] are relied upon.
"[COUNSEL FOR THE RESPONDENT WIFE (during the trial):] It would.
It was in fact your position at the time you saw [JEM] that to property (sic) undertake the valuation exercise that more recent documents, that is, more recent income figures were required?---That's correct.
Was any explanation provided to you why what are described as more recent documents were not provided to you?---To me or [JEM]?
To either of you?---That they just weren't available.
That's what you were told?---That's what I was told. There weren't any documents.
…
[COUNSEL FOR THE RESPONDENT WIFE (during the trial):] To the extent that your affidavit deals with the value at any point in time of the S Group it is your position that more recent figures are required.
…
[COUNSEL FOR THE RESPONDENT WIFE (during the trial):] The issue of the value of the M Group which you dealt with, you say that has no value to an external purchaser?---I said I couldn't, yes, reasonably conclude a value.
Sorry, I apologise. In fact you said you couldn't value it. You don't say it has no value?---No, and as I discussed with [JEM], that if there was a book of loans or a book of trail commissions, you know, we could value that, I could value that and there is industry guidelines, but without any other figures or current figures or income projections or earnings in that group, I can't put a value on it and I would say - - -
Without the documents that show what trailing commissions are being received, for example?---Correct.
So your position is not that a zero valuation should be put at the M Group, if I can use that phrase, but rather that on the information available to you, you were unable to put any valuation on it?---That's correct, without knowing what other activities it's undertaken since that day. I mean, it could be zero but it could be something.
…
[COUNSEL FOR THE RESPONDENT WIFE (during the trial):] Another reason is the paucity of financial documents that you received from him?---Well, I think it's best practice that accountants are sort of - if you're doing one part, you should do all parts of documents otherwise you're going to miss bits. You're not going to be able to tie up loan accounts. You're not going to be able to do that. But I mean, it has been an absolute financial disaster.
But it's not your position, is it, that you had access to all of the necessary information?---Well, I was given what I was asked to look at. I mean, to move forward - and I do agree with your comment that you need, you know, more current information to forma value."
It is the respondent wife's case that she was denied procedural fairness at various points during the trial. Firstly, she asserts that she was not afforded procedural fairness when she was denied the opportunity of a contested hearing on the preliminary issue of the adequacy of the applicant husband's financial disclosure and the readiness of the case for trial.
That application was made by counsel for the respondent wife at the commencement of the trial. He made the following submission:
"[QUEEN’S COUNSEL FOR THE RESPONDENT WIFE]: My client understands that and, your Honour, my instructions are clear. For the fair trial of this matter it is respectfully submitted the two orders in the form are necessary; that is to say, an adjournment of the trial because it cannot on any conceivable view be prepared for Monday given that senior counsel dropped out yesterday, and that there is a proper basis for investigation of noncompliance with discovery orders. That has been asserted before but never investigated by the court and it is, in our respectful submission, necessary that it be investigated, not only because it's a serious issue, noncompliance with the rules; secondly, because failure to give discovery prevents a fair trial occurring; and, thirdly because we're not in a position to present a proper analysis of the financial position without those documents. I was about to refer to what the Court of Appeal said in the McCabe case which, as your Honour knows, is about wilful destruction of documents. That's not what we're saying here but there is discussion by the Court of Appeal of the concept of fair trial."
His Honour refused the application and insisted that the trial proceed.
In arriving at that decision, his Honour said, however:
"I am conscious as any judge of this court and the Commonwealth of Australia on the need for procedural fairness and a fair hearing, but there comes a time when the hearing has got to be heard and determined. If it transpired in the course of the hearing that there had been fraud, there had been nondisclosure and that it was utterly prejudicial to the wife, that the position was made perfectly clear, I rather suspect that it would not be inappropriate then if an application was made to stand the matter down."
During the course of the trial, such applications were indeed made by counsel for the respondent wife, but in turn were dismissed by the trial Judge. We were not specifically directed to those parts of the transcript where such applications were made. However, during the course of argument, Senior Counsel for the applicant husband made the following concession:
"HOLDEN J: I don't want to deflect you from responding to these submissions, but can I just ask you this: one of the grounds of appeal is that his Honour erred in failing to adjourn the further hearing of the case to enable the appellant to have full discovery and inspection of the husband's financial affairs.
MR [SENIOR COUNSEL FOR THE APPLICANT HUSBAND]: Yes.
HOLDEN J: Was a request for an adjournment ever made?
MR [SENIOR COUNSEL FOR THE APPLICANT HUSBAND]: Yes, your Honour, there was certainly two applications and indeed there may have been three applications including applications made following final submissions."
The refusals to grant the adjournment are asserted by the counsel for the respondent wife to be a further denial of procedural fairness.
In our view, even assuming that [JEM] was totally destroyed as a credible accounting expert, the problem remains that if the applicant husband had not fully disclosed his financial position, the trial may have miscarried. We are of the opinion that we cannot say that grounds 9 and 14 of the Notice of Appeal are, on the face of it, so devoid of merit as to justify the making of an order for security for costs. Having regard to the principles relating to such applications as outlined earlier in these reasons for judgment, we are of the view that with respect to this aspect of the appeal, the respondent wife ought not be denied the right to prosecute it because of her impecuniosity. If the respondent wife is ultimately successful in establishing a lack of procedural fairness, then the inevitable result would be that the appeal would be allowed and the matter remitted for a rehearing. This would make the remaining grounds of appeal redundant. If she failed, however, we are of the view that given the strength and comprehensiveness of his Honour's findings, her prospects of succeeding on the remaining grounds would be remote.

Conclusion

We are of the view for the reasons given, that the respondent wife ought to be able to argue grounds 9 and 14 as a preliminary issue on the appeal, without having to make provision for security for costs. We would otherwise adjourn the application for security for costs, with liberty to the applicant husband to re-list the application in the event that the respondent wife elected to proceed with the balance of her appeal if she lost on the issue of procedural fairness.

Orders

The orders of the Court will be:
1.That the respondent wife be permitted to argue grounds 9 and 14 of her Notice of Appeal as a preliminary issue to the appeal.
2.That the applicant husband's application, filed 2 September 2004, otherwise stand adjourned with liberty to re-list.

I certify that the preceding 42 paragraphs are a true copy of the reasons for judgment delivered by this Honourable Court

Associate

[2005] FamCA 1257

30 December 2005

Key Legal Topics

Areas of Law

Civil Procedure

Family Law

Legal Concepts

Appeal

Costs

Jurisdiction

Procedural Fairness

Standing