ORCHIDE & ORCHIDE
[2017] FamCAFC 271
•15 December 2017
FAMILY COURT OF AUSTRALIA
| ORCHIDE & ORCHIDE | [2017] FamCAFC 271 |
| FAMILY LAW – APPEAL – SECURITY FOR COSTS – Where the husband has filed an appeal against property orders made in the Federal Circuit Court of Australia – Where the wife seeks an order that the husband provide security for her costs of the appeal – Where the husband says he would be unable to meet an order for security or an order for costs in favour of the wife in the event that his appeal was unsuccessful – Where there has been no delay in bringing the application for security – Where an order for security would stifle the appeal in circumstances where the husband has obtained the transcript and filed his summary of argument – Application dismissed. FAMILY LAW – COSTS – Where the husband seeks his costs thrown away – Where the wife opposes the application – Where the primary rule under section 117(1) of the Family Law Act 1975 (Cth) should apply – Costs application dismissed. |
| Family Law Act 1975 (Cth) s 117 Family Law Rules 2004 (Cth ) r 19.05 |
| Adult Guardian and Mother's Parents and B and Child's Representative (2002) FLC 93-116 |
| APPELLANT/RESPONDENT: | Mr Orchide |
| RESPONDENT/APPLICANT: | Ms Orchide |
| FILE NUMBER: | MLC | 6035 | of | 2015 |
| APPEAL NUMBER: | SOA | 68 | of | 2017 |
| DATE DELIVERED: | 15 December 2017 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Strickland J |
| HEARING DATE: | 15 December 2017 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 11 August 2017 |
| LOWER COURT MNC: | [2017] FCCA 1833 |
REPRESENTATION
| COUNSEL FOR THE RESPONDENT/APPLICANT: | Mr Hall |
| SOLICITOR FOR THE RESPONDENT/APPLICANT: | Mills Oakley |
| COUNSEL FOR THE APPELLANT/RESPONDENT: | Mr Brown |
| SOLICITOR FOR THE APPELLANT/RESPONDENT: | Browns the Family Lawyers |
Orders
The application in appeal filed on 6 December 2017 be dismissed.
The oral application for costs made by the husband 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 Orchide & Orchide 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).
|
Appeal Number: SOA 68 of 2017
File Number: MLC 6035 of 2015
| Mr Orchide |
Appellant/Respondent
And
| Ms Orchide |
Respondent/Applicant
EX TEMPORE REASONS FOR JUDGMENT
Before the court is an application in an appeal filed on behalf of Ms Orchide (“the wife”), who is the respondent in this appeal, seeking an order for security for costs in the sum of $40,000. However, as a result of discussions with counsel today, that figure has now been reduced, and I will return to that shortly.
The application is opposed by Mr Orchide (“the husband”), who is the appellant in the appeal.
The documents relied upon by the wife in support of the application are her affidavit filed on 6 December 2017, and the affidavit of her solicitor, Mr Harriss, filed on 14 December 2017.
The documents relied upon by the husband are his affidavit filed on 14 December 2017, and his amended written submission also filed on 14 December 2017.
What is also before the court is the Notice of Appeal filed by the husband on 8 September 2017, and the reasons for judgment of the primary judge, Judge Bender, dated 11 August 2017.
To return to the amount of costs sought by way of security.
To repeat, in the application, $40,000 was sought. The details of that amount are set out in the affidavit of Mr Harriss, but, as it transpired, those costs were calculated on the basis of solicitor/client, rather than party/party, and, at my invitation the wife’s counsel sought instructions as to what those costs would be on a party/party basis. He has now indicated a very conservative amount of $6,362.
In terms of the relevant principles, they are summarised by the Full Court in Sawer & Sawer [2007] FamCA 140 at [19] to [21] as follows:
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.
20.The provisions of s 117(2A) are as follows (ss 117(4) and (5) are not presently relevant):
In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a)the financial circumstances of each of the parties to the proceedings;
(b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f)whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g)such other matters as the court considers relevant.
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
…
Those latter principles were drawn from previous Full Court decisions of, Luadaka& Luadaka (1998) FLC 92-830, Jones and Jones (2001) FLC 93-080 and Adult Guardian and Mother's Parents and B and Child's Representative (2002) FLC 93-116. They also find expression in the factors set out in r 19.05 of the Family Law Rules 2004 (Cth).
In terms of the application before the court today, and on the basis of the submissions made by both parties, it seems that the relevant factors to be taken into account are first, the financial means of the husband, secondly, the prospects of success or merits of the application, thirdly, whether an order for security for costs would be oppressive or would stifle the case, fourthly, whether there would be any difficulty in enforcing an order for costs, fifthly, whether or not there has been a delay in bringing the application for security, and finally, the likely costs of the case.
Turning to address those factors.
In relation to the financial means of the husband, the husband’s position is that he is impecunious, and the only way that he has been able to continue this litigation is by his family, and particularly his mother, providing funds to meet his legal costs. However, it is deposed to in the husband’s affidavit, and reiterated in the submissions of his counsel, that the husband is not able to either borrow or obtain any further funds from his family. Now, that is obviously an important factor in this application, given that a primary basis for ordering security for costs is that, in the event of the appeal being dismissed, and there being an order for costs made in favour of the wife, that order needs to be enforced. If that cannot be done then that, of course, is unfair to the successful party in the appeal, given that that party, in this case the wife, would have incurred significant legal costs herself in opposing the appeal and ultimately succeeding in obtaining a dismissal of the appeal. That issue is also the subject of one of the other relevant factors I have set out above namely, whether there would be difficulty in enforcing an order for costs, and in this case, that is the position.
In terms of whether or not there has been delay in bringing the application for security, a submission to the effect that there has been a relevant delay was made on behalf of the husband, but in the circumstances, I do not accept that there has been such a delay as would prevent an order for security for costs being made. Certainly, the Notice of Appeal was filed on 8 September 2017, and the application was not filed until 6 December 2017, however, the wife’s counsel has explained that the decision to make the application was only made once it was apparent that the husband was being represented in the proceedings; the implication being that he was at least able to obtain the funds to meet an application for security for costs, whereas, prior to that, that was not necessarily the case.
That leaves perhaps the two most significant factors, namely the prospects of success or merits of the application, and whether an order for security for costs would be oppressive or would stifle the case.
I have touched upon the latter factor in what I have said so far in addressing the financial means of husband and his ability to obtain funds. In simple terms, it is put to me that he is not in a position to meet an order for security for costs; he does not have the funds himself, and he is not able to obtain funds from his family. Thus, the effect of an order being made would be to stifle the appeal, and I will return to that later.
In terms of the prospects of success or the merits of the application, as is plain, in applications such as this, this Court is not in a position to make any definitive finding as to the success or otherwise of the appeal. The best that the court can do is, on the basis of the documents that are before it, and I have referred to those documents above, and specifically the reasons for judgment of the trial judge and the Notice of Appeal, make an assessment of the likely success or otherwise of the appeal. The bar is a relatively low one, because frankly, even if there is the remotest chance of success, then that is sufficient.
The issue of the impecuniosity of the husband in this case, feeds into the issue of the merits of the case. In other words, if there is no merit, then the impecuniosity of the husband and his inability to obtain funds is highly relevant, because, of course, that would ultimately prejudice the wife in terms of being able to enforce any order for costs. On the other side of the coin, if there is some merit in the appeal, then the issue of the impecuniosity becomes less relevant. That is because, if the appeal is successful, obviously, there would not of course be an order for costs in favour of the respondent, and therefore in this case, the wife would not be prejudiced as a result.
Doing the best I can with the documents that I have, I am not able to say that the appeal is without any prospects of success. That is not to be taken as any indication though that the appeal will succeed. The onus is obviously on the husband to ultimately satisfy the Full Court that the trial judge has erred, such that the orders will be set aside, and nothing I am saying today can be taken as any indication that that will happen. As I have attempted to stress in these reasons, that is not what I have to consider, because I am not in the position to do that. In summary then, that renders the impecuniosity of the husband less relevant to the issue of security for costs.
Another important factor that I must mention is the state of the appeal. There was a directions hearing on 26 October 2017 when the appeal was listed for hearing on 30 January 2018. In the usual way, orders were made to prepare for that hearing. It is important that the husband, who is the appellant of course, has complied with all orders made on 26 October 2017, in that he has obtained the transcript of the hearing, he has filed and served his summary of argument and list of authorities, and he has obviously incurred costs through his solicitors to achieve that position.
Thus, in a sense, there is nothing more for the husband to do to prepare the matter for hearing. Obviously, prior to the hearing, his counsel will need to prepare for that oral hearing, but that is a matter for counsel, it is nothing that the husband has to do in terms of complying with the orders.
Accordingly, the state of the appeal is important here.
On balance, for all of the above reasons, the application should be dismissed.
I now have an application for costs by the husband, and the amount sought is $2,420.
The basis of the application is twofold. First, the application by the wife has been wholly unsuccessful, and secondly, when the financial circumstances of the parties are considered, the wife’s financial circumstances are far superior to those of the husband.
That application is opposed by the wife.
In terms of the financial circumstances, Mr Hall has referred me to the evidence before the trial judge of the respective incomes of the parties. He also puts that it was only yesterday that the affidavit material and, effectively, the response of the husband to this application, was received.
In my view, there should be no order for costs, and the primary rule under section 117(1) of the Family Law Act 1975 (Cth) should apply.
I certify that the preceding twenty-seven (27) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered on 15 December 2017
Associate:
Date: 20 December 2017
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