O and G - [2003] FMCAfam 192

FEDERAL MAGISTRATES COURT OF AUSTRALIA

O & G

[2003] FMCAfam 192

CHILD SUPPORT – Application for security for costs by unrepresented litigant – where security is required for future legal costs – where applicant for a departure order has been in default of previous costs orders – where applicant for departure is in arrears with child support – the matters to be considered in such an application – where protective orders are necessary.

Child Support (Assessment) Act 1989 (Cth)
Family Law Act 1975 (Cth), s.117

Cachia v Hanes (1994) 179 CLR 403
Dobree v Hoffman (1996) 18 WAR 36
Thomas Lee Jackson and Carolyn Patricia Hamer (Unreported, Butler J,
16 March 1993)
Alexander and Alexander (1977) FLC 90-257
Luadaka and Luadaka (1998) FLC 92-830
Jones and Jones (2001) FLC 93-080
Adult Guardian & Mother’s Parents & B & Child’s Representative [2002] FamCA 874
Dillon v Baltic Shipping Co (1991) 102 ALR 482

Applicant:

DMO

Respondent:

KEG

File No:

BRM 4812 of 2002

Delivered on:

11 June 2003

Delivered at:

Parramatta

Hearing date:

30 May 2003

Judgment of:

Raphael FM

REPRESENTATION

Counsel for the Applicant:

Mr D Dura

Solicitors for the Applicant:

Jones Lawyers, Qld

For the Respondent:

Self Represented

ORDERS

Upon the mother providing the father by prepaid ordinary post at his address given in his affidavit with a copy of a letter from a firm of solicitors confirming that they have agreed to act on behalf of the mother in connection with the proceedings for departure order commenced by the father on 22 March 2002 in Brisbane but now transferred to Parramatta, the father shall, within 14 days, pay into the Trust Account of his solicitors Kieran Gerard McCarthy Jones Lawyers of Level 32, 33 Queen Street, Brisbane the sum of $2,000.00 by way of security for the costs of the mother in relation to the said proceedings. The said sum shall be held by the solicitors pending the outcome of the proceedings or further order of this court. In the event that the said solicitors shall cease to act for the father they should be at liberty to apply to the court for orders releasing the said sum from the Trust Account.
The mother has liberty to apply to this court for further orders for security in accordance with the rules.
The in event that the father does not abide by this order the proceedings between the parties under the Child Support Act be stayed.
Liberty to apply.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
PARRAMATTA

BRM 4812 of 2002

DMO

Applicant

And

KEG

Respondent

REASONS FOR JUDGMENT

This application for security of costs made by the respondent mother in the applicant father’s claim for a departure order under the Child Support (Assessment) Act 1989 (Cth) (“the Child Support Act”) raises first the interesting problem of whether a self represented litigant can make such an application so as to provide for security for the costs of legal representation in the forthcoming proceedings which, she claims, she could only take responsibility for if such security was provided.
It is settled law that an unrepresented litigant is not entitled to costs: Cachia v Hanes (1994) 179 CLR 403 This ruling applies even if the self-represented litigant is in fact a legal practitioner: Dobree v Hoffman (1996) 18 WAR 36. But the mother is not applying for costs in relation to this application for security and she argues that it would be open to me to make orders which protect the position of the father so they would only come into effect if and when she obtains legal representation. Security for costs is no more than that. If the party paying the security succeeds in his proceedings then the payee receives nothing. The existence of a fund from which the payment of her costs can be made will give comfort to a firm of lawyers considering taking on the case. Obviously, they will be sensible of the risks involved; these being not only that the applicant father may obtain his order but also that the judicial officer presiding over the proceedings may not make an order as to costs.
I have been provided with no authority on the matter and have found none. But I do note in a lengthy judgment on the question of security generally in the matter of Thomas Lee Jackson and Carolyn Patricia Hamer (Unreported FCA, Butler J, 16 March 1993). His Honour said this:
“[38] Litigants representing themselves have difficulties in conducting their cases adequately by reason of their lack of understanding of legal principles, and of the rules of evidence and procedure. This causes hearings to be extended, and difficulties for the Trial Judge who does not have the benefit of adequate argument on the law, and often on the facts… The strong social concern is for impecunious litigants to have their day in Court without suffering any disadvantage caused by lack of means.”
His Honour went on to order security in a custody case but he admitted that ordinarily costs would not be ordered. He noted:
“[42] …However, if an impecunious litigant, by reason of self representation, significantly extends the hearing, or causes it to be delayed or postponed, an injustice will flow to the other party.”
I see no reason why the mother would be obliged to have a solicitor on the record in order to make this application. There is no doubt that if a solicitor was on the record I could make such order, if it was appropriate. Why I should not be able to make such an order subject to the proper safeguards just because she is not represented today when the order will relate purely to costs incurred whilst she is represented, has not been explained to me and I do not think that there would be any valid reason which would prevent me from doing so. On the other hand, there is every reason that I should do so in order to have the matter litigated in a way which will provide both parties and the court with the maximum assistance.
The mother’s application to this court is in the following terms:
“(1) Pursuant to Part 21, Rule 21.01 of the Federal Magistrates Court Rules DMO within 14 days of the order being made gives security for costs by depositing $6,300 into the Trust Account of Watts McCray of Level 15, 370 Pitt Street Sydney.
(2) That the proceedings be stayed until security is provided.
(3) That within 14 days of this order being made, DMO pay the outstanding costs with interest from 30 November 2001 to the date of payment, at the rate of 14% pa pursuant to section 117B of the Family Law Act, rule 22.01 of the Federal Magistrate Court Rules, Order 38 rule 4 and Order 40, rule 1 of the Family Law Rules.
(4) That the proceedings be stayed until the outstanding costs with interest are paid.”
The father filed an application in the Federal Magistrates Court in Brisbane on 22 March 2002 seeking a departure from the decisions of the Child Support Agency (“CSA”) dated 1 August 2000 and 8 June 2001 and consequential orders which would appear to apply until the child who is presently five years of age, is eighteen. These matters have been considered by the CSA whose delegate and review officer have declined the applications. The mother argues that the applicant’s affidavit in support of the departure order before this court does not show a claim which has any great likelihood of success.
The mother also argues that the court should exercise its discretion under s.117 of the Family Law Act 1975 (Cth) (“the Family Law Act”), which the parties accept as the relevant statutory authority to grant security for costs in this matter, on the following bases. The first basis is that the father was ordered in May 2001 by the Family Court of Australia to pay $650.00 by way of costs to her by November 2001. She deposes to the fact (which is not denied) that the father did not complete payment of those costs until just prior to this hearing. In fact he did not even start paying those costs until he had notice of this application. Although the $650.00 has been paid, the mother says that there is approximately $188.00 by way of interest due under the costs order that has not been paid. The second basis upon which the mother makes her claim for security is that the father is currently over $10,000.00 in arrear of his child support liability and has not made any payment between 8 June and August 1999 or between October 2000 until March 2002. He is paying approximately 50% of the currently assessed amount. Thirdly, the mother argues that the father’s claim has little prospect of success and it is unfair for her to be put to the cost of funding solicitors to resist the claim in all the circumstances.
The amount which the mother requests by way of security is an amount which she says she was informed by her intended solicitor Mr Benjamin of Watts McCray was likely to be his costs for acting on her behalf. That hearsay evidence was given without objection.
Evidence in the case was given by both the mother and the father on affidavit. Each was cross-examined. The evidence served to confirm that the mother had not previously sought an order for security, that she had applied to remove the case down from Brisbane to Sydney and that this might be part of the reason why it had not advanced very far although it had been commenced last year. The father’s evidence dealt with some allegations by the mother concerning his financial affairs. These mostly related to trips that he had made with his current partner including one to Japan. The mother sought to establish that the father had a substantial property on which were two houses. I was not really convinced of this from the rather confusing way in which the evidence came out.
Applications for security for costs have been given detailed consideration by the Family Court in such cases such as Alexander and Alexander (1977) FLC 90-257; Luadaka and Luadaka (1998) FLC 92-830; Jones and Jones (2001) FLC 93-080 and Adult Guardian & Mother’s Parents & B & Child’s Representative [2002] FamCA 874. These cases start with discussions on the usual basis for the grant of security in the civil jurisdiction. They note that the usual ground is the impecuniosity of the plaintiff and the difficulty of enforcing any order for costs in favour of an applicant (Dillon v Baltic Shipping Co (1991) 102 ALR 482). In Jackson and Hamer supra at [22] Butler J said:
“Applications for security for costs are uncommon in the Family Court, except perhaps when they relate to proceedings for property settlement where one party is impecunious and needs to be put in funds to enable the action to proceed.”
The impecuniosity of the party bringing the proceedings is still a matter of importance. In this case it is paradoxical that the father who alleging indigence and therefore an inability to meet his child care obligations, tells the court through his advocate that the mother would have no difficulty in collecting any costs order made against him. As the task of the court hearing the application for the departure order is to determine the father’s true financial position I do not think that it is appropriate at this stage in the proceedings for me to embark upon such an investigation. I think I can rely on the contradiction of the statements made in paragraph 23 and 24 of his affidavit of 22 May 2003. In the first paragraph he states:
“This financial year 2002-2003 I anticipate an increase in my taxable income to approximately $28,000.00.”
And at [24] he states:
“I do not have a stable income…I have no income except limited savings.”
In Adult Guardian supra the Full Bench of the Family Court said at [61]:
“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.”
Section 117(1) applies to proceedings under the Family Law Act. It is generally accepted that proceedings under the Child Support Act and in particular applications for departure orders are the type of proceedings which do attract costs orders. Section 117(2A) sets out a number of matters the court should have regard to and these were dealt with by the Full Court in Adult Guardian as well as some extra matters. In regard to the matters specifically mentioned in the section I have already indicated concerns which I have as to the financial situation of the father. The situation of the mother is somewhat more complex. She is a solicitor of the Supreme Court of New South Wales who specialises in superannuation matters. It is not entirely clear what her employment position is, although I am satisfied that is not full time. She has not filed a tax return for the year ended 30 June 2002. She has a house with a mortgage, she has obligations to her parents who have lent her money and the father is significantly in arrears of his child support obligations. Whilst I am satisfied that she could probably find the funds necessary to pay a solicitor in this matter, this might be difficult and would add an extra burden to her financial status. Neither party is in receipt of legal aid and I cannot see that either would be eligible for it. In regard to the conduct of the parties in relation to the proceedings the father has argued that the mother has caused delay to the hearing by virtue of her application to have the matter transferred from Brisbane to Sydney. This may be the case; but there now does seem to be affidavits on by both parties and it may well only be the difficulties that the court faces in providing a speedy hearing date that is further holding the matter up.
These proceedings were not necessitated by a failure on the part of one of the parties complying with the previous order of the court but the father has failed to comply with two previous orders and is in arrears of his administrative assessment. The first related to costs and has been discussed. The second related to an obligation that he had towards assisting the obtaining of a passport for his son. This was only done after the mother made an application to the court to enforce the order. In my view the failure of the father the comply with court orders previously and in particular the order as to costs that was previously made, belies his assertions that the mother would have no difficulty in enforcing such an order should she obtain it in relation to the next hearing. I am satisfied that the father has only paid the long outstanding costs order because of these proceedings before me. He has still not paid the interest. These matters weigh heavily against him.
The matters contained in s.117(2A)(e), (f) and (g) do not appear to be relevant. The other matters which were referred to in Adult Guardian include whether or not the litigation may involve a matter of public importance. This is said to militate against the making of an order. This case has no public importance. I am not satisfied that the mother has delayed in bringing this application. She first sought to bring the matter down to Sydney. That has been achieved. Now that the father wishes to continue with his application she has sought legal advice. Having been informed of the costs of such advice she wishes to be covered in the event that she should be successful and a costs order be made in her favour. Her actions seem to me to be perfectly reasonable.
The final matter referred to by the Full Bench was “any difficulties of enforcing an order for costs and the amount of costs to be incurred.”

I have already stated that there may well be a difficulty in enforcing an order for costs based upon the father’s previous actions. I accept that the amount of the costs in this case will not be great but neither were the costs which were awarded against him. He did not pay those until placed under significant pressure.
In so far as it is necessary to consider the prospects of success of the father’s application, I would have to say that from the material which I have examined and without the benefit of hearing the parties the father would have a less than even chance of convincing the court that there were special circumstances or that the other matters required by s.117 of the Family Law Act were present in his application.
I propose to make orders in favour of the mother in relation to this application. The orders which I will make are intended to protect the father by ensuring that they do not come into effect until the mother has obtained legal representation. They are also intended to protect the mother in relation to the quantum of such costs. The evidence which I received about the quantum was unsatisfactory. It is the practice in the civil jurisdiction for multiple applications for security to be made so that the burden of such an order does not fall upon the plaintiff all at once. If the mother requires further security over the amount I am initially prepared to order she may make such an application, this time it should be properly supported by evidence.
The mother made two other applications which related to the previous costs order. That order has now been complied with save for the interest on costs. If the mother wishes to enforce the claim for interest there are ways and means available to her. I think that the enforcement should be done in the normal way. I will not make requested orders (3) and (4).

The mother was self-represented in this application. She is not entitled to any costs.

I certify that the preceding seventeen (17) paragraphs are a true copy of the reasons for judgment of Raphael FM

Associate:

Date: