Penman and Child Support Registrar and Anor

[2015] FCCA 2947

FEDERAL CIRCUIT COURT OF AUSTRALIA

PENMAN & CHILD SUPPORT REGISTRAR & ANOR [2015] FCCA 2947

Catchwords:
CHILD SUPPORT – SSAT Appeal – Application in a Case.

PRACTICE AND PROCEDURE – Security for costs – stay – application for security for costs – application for stay – stay of hearing of Appeal pending payment of costs sought – whether order would stifle the litigation – whether arguable case in the substantive proceeding – order for security for costs refused.

Legislation:

Child Support (Registration and Collection) Act 1988 (Cth)

Family Law Act 1975 (Cth), s.117

Cases cited:
Jackson & Hamer (1993) 17 Fam LR 34; FLC 92-419
LAC & TRF [2005] FamCA 158; (2005) 33 Fam LR 123
Linden v Commonwealth (No.2) (1996) 136 ALR 251
In the Marriage of Luadaka [1998] FamCA 1520; (1998) 24 Fam LR 340; FLC 92-830

Appellant: MR PENMAN

First Respondent: CHILD SUPPORT REGISTRAR

Second Respondent: MS MORGAN

File Number: SYC 6227 of 2014

Judgment of: Judge Scarlett

Hearing date: 10 March 2015

Date of Last Submission: 10 March 2015

Delivered at: Sydney

Delivered on: 24 June 2015

REPRESENTATION

Appellant: In person

Solicitor for the First Respondent: Mr Dean

Solicitors for the First Respondent: Australian Government Solicitor

Second Respondent: In person

ORDERS

1. The Application in a Case filed by the First Respondent on 22 January 2015 is dismissed.

2. The Appellant is to file and serve a list of the documents before the Social Security Appeals Tribunal upon which he wishes to rely for the prosecution of his Appeal from a decision of the Social Security Appeals Tribunal filed on 3 October 2014, identifying those documents by document number, a copy of the transcript of the proceedings before the Social Security Appeals Tribunal and a written outline of submissions on or before 31 August 2015.

3. The Second Respondent is to file and serve a list of the documents before the Social Security Appeals Tribunal upon which she wishes to rely, identifying those documents by document number and a written outline of submissions on or before 30 September 2015.

4. The First Respondent is to file and serve a written outline of submissions which identifies any documents that were before the Social Security Appeals Tribunal upon which she wishes to rely on or before 23 October 2015.

5. The Appeal filed on 3 October 2014 is listed for hearing at 2:15 pm on Tuesday 10 November 2015.   

IT IS NOTED that publication of this judgment under the pseudonym Penman & Child Support Registrar & Anor is approved pursuant to s.110X(4)(h) of the Child Support (Registration and Collection) Act 1988 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYC 6227 of 2014

MR PENMAN

Appellant

And

CHILD SUPPORT REGISTRAR

First Respondent

MS MORGAN

Second Respondent

REASONS FOR JUDGMENT

Application

1. This is an Application in a Case seeking that the Appellant pay into Court the sum of $15,000.00 as security for costs. The Appellant opposes the Application. The Application was amended to provide that the Appellant should pay a smaller amount, namely $6,581.00 as security for costs.

Background

1. On 3 October 2014, the Appellant filed a Notice of Appeal against a decision of the Social Security Appeals Tribunal given on 2 September.

Orders Sought

1. The Child Support Registrar filed an Application in a Case on 22 January 2015. In that Application, the Registrar seeks these Orders:

   1.  The Applicant, Mr Penman, pay into the Court’s fund $15,000.00 as security for the First Respondent’s costs in these proceedings.

   2.  The proceedings be stayed pending the Applicant’s compliance with Order 1.

   3.  The parties have liberty to apply.

2. The Appellant, who is the Respondent to the Application in a Case, seeks an order for summary dismissal of the Application.

Evidence

1. The Registrar relies on the following:

   a)The affidavit of Bradley Dean  affirmed on 22 January 2015; and

   b)The affidavit of Hannelore Schuster affirmed 25 February 2015.

2. The Appellant has not filed an affidavit.

3. In his affidavit of 22 January 2015, Mr Dean, a lawyer employed by the Australian Government Solicitor, deposes that he has the day to day carriage of the substantive matter, namely Mr Penman's Appeal, but four other current matters:

   a)An Application the Administrative Appeals Tribunal in which Mr Penman has applied for a review of a decision of the Social Security Appeals Tribunal concerning the percentage of care for two of his children;

   b)An Application in this court for parenting and child support orders, in which the Child Support Registrar has intervened but is not taking an active role;

   c)An Appeal in the Appeal Division of the Family Court of Australia against a decision of this Court (Penman & Child Support Registrar & Anor (SSAT Appeal)[1] in which judgment was reserved on 13 October 2014; and

   d)An appeal in Federal court of Australia against a decision of the Administrative Appeals Tribunal relating to child support issues.

   [1] [2013] FCCA 492

4. Mr Dean deposed that there were other proceedings which have been largely finalised except for issues of costs. Those matters are:

   a)An order made by Wigney J in the Federal Court on 30 January 2014 that the Appellant should pay an amount of $12,000.00 in costs within 12 months in the proceeding NSD 1254 of 2013; and

   b)An order made by the Full Court of the Federal Court on 12 September that the Appellant should pay the costs of the Child Support Registrar in respect of an unsuccessful appeal.  

5. Mr Dean further deposed that the Appellant has not paid the costs of either matter and, when asked about his proposals to pay those costs, the Appellant told him over the telephone that he had no money, he was living off loans and charity and had $59.00 in the bank.

6. Mr Dean went on to state that he estimated that the Child Support Registrar would incur professional costs exceeding $15,000.00 in the substantive proceedings. He anticipates that if the Appellant in the proceedings the Australia Government Solicitor would be instructed to seek an order for costs.

7. In her affidavit of 25 February 2015, Ms Schuster reiterated the matters set out in Mr Dean’s affidavit and then deposed that her knowledge of the Appellant’s financial circumstances was limited. However, she went to state:

   13.    However, I was present at the Administrative Appeals Tribunal in Sydney on 11 February 2014, at a hearing before (omitted) in a matter involving Mr Penman and the Child Support Registrar.

   14.    I recall that during that hearing Mr Penman gave oral evidence to the effect that he pays the costs associated with his sons’ private schooling.

   Annexed hereto and marked ‘HS-5’ is an extract of the transcript of the hearing before the Administrative Appeals Tribunal on 11 February 2014.

   This extract of the transcript records all of Mr Penman’s oral evidence before the Administrative Appeals Tribunal on that occasion, including his oral evidence about the payment of costs associated with his sons’ private schooling.

   15.    I recall that during the hearing Mr Penman gave oral evidence about money loaned to him by his mother and by another, Mr S. The above mentioned annexure, HS-5, also records Mr Penman’s evidence about these loans.

   16.    During the hearing before the Administrative Appeals Tribunal, Mr Penman also gave evidence about his earning capacity, to the extent that he said: “When I am fully up and running I’m quite capable of earning over $300,000 a year.” This appears on page 142 of the transcript, which is included in the transcript extract at Annexure HS-5.[2]

   [2] Affidavit of H. Schuster 25.2.2015 at paragraphs [13]-[16]

8. Ms Schuster was subjected to some brief cross-examination by the Appellant but was unshaken in her evidence.

9. The Appellant also gave oral evidence and was cross-examined.

Submissions

1. The Registrar relied on a written submission filed on 26 February 2015. In that submission, the Registrar referred the Court to the provisions of s.117 of the Family Law Act 1975 (Cth), particularly subsection (2), which states that if the Court is of opinion that there are circumstances that justify it in doing so, may make such order as to costs and security for costs as the court considers just.

2. Subsection 117(2A) contains a list of matters to which the Court shall have regard when considering what order (if any) should be made. It will not be necessary for more than one of those factors to be present before an order for security for costs can be made (see LAC & TRF[3]at [41]). The Court was also referred to the decision of the Full Court of the Family Court, In the Marriage of Luadaka[4], at [62], other relevant factors were set out.

   [3] [2005] FamCA 158; (2005) 33 Fam LR 123

   [4] [1998] FamCA 1520; (1998) 24 Fam LR 340; FLC 92-830

3. Mr Dean, solicitor for the Registrar, submitted that:

   a)the Appellant has the means to satisfy the proposed order for security for costs;

   b)the Court can infer that if an order for costs were to be made against the Appellant in the substantive proceedings, he would not willingly satisfy such an order;

   c)the Appellant’s conduct in the proceedings to date is sufficiently troubling to justify the making of an order for security for costs, noting the Appellant’s behaviour when the matter was listed for mention on 9 December 2014; and

   d)the Appellant’s Appeal is without substance, and is (at least for the most part) a challenge to the merits of the findings of fact made by the Social Security Appeals Tribunal, rather than an appeal on a question of law, and thus, the Appellant’s prospects of success are poor.

4. The Appellant submitted that he in fact had no funds and a negative income and the Court should consider whether the Application for Security for costs is being used oppressively. He referred the Court to the decision of Jackson & Hamer[5], where the principles relating to security for costs were considered.

   [5] (1993) 15 Fam LR 34; FLC 92-419

Conclusions

1. In Luadaka[6], the Full Court of the Family Court summarised at [62]-[62.7] the matters that should be taken into account when considering an application for security for costs:

   [6] supra

   [62.1]   It may be relevant to take into accou8nt the means of the applicant to satisfy an order for costs if he or she is unsuccessful…

   [62.2]   The prospects of success is a relevant matter to take into consideration…

   [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…

   [62.4]   It may be relevant to consider whether an order for costs would be oppressive or stifle the litigation.

   [62.5]   It may be relevant to consider whether or not the litigation may involve a matter of public importance…

   [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…

   [62.7]   Other relevant considerations may include any difficulties of enforcing an order for costs and the amount of costs to be incurred.

2. The Application for security for costs mainly deals with these issues:

   a)the fact that there are already orders for costs made in the Federal Court which have not been satisfied;

   b)whether or not the Appellant is impecunious or has the means to meet a costs order;

   c)the Appellant’s behaviour on a previous occasion; and

   d)the strength or otherwise of the Appellant’s Appeal.

3. True it is that there are outstanding orders for costs made in another jurisdiction. However, there does not seem to have been a great amount of action taken by the Registrar to recover those costs to date, and one might query whether an application for security for costs is an appropriate method of enforcing other costs orders.

4. The evidence about the Appellant’s financial circumstances is contradictory. On the one hand, the Appellant claims to be impecunious, but on the other there is evidence from Ms Schuster that the Appellant has told the Administrative Appeals Tribunal that he has access to funds and has an earning capacity of up to $300,000.00 per annum.

5. The Appellant’s behaviour in court on 9 December 2014 was loud, abrasive and abusive. Whilst the Court was seeking merely to make directions about listing the Appeal for hearing, the Appellant was unwilling or incapable of taking part in that relatively simple exercise and the matter was adjourned until 10 February 2015 for further mention.

6. It is noteworthy, however, that on the next occasion the Appellant, unprompted, offered a full apology for his behaviour on the previous occasions. As the apology appeared on its face to be sincere and unconditional, the apology was accepted and the matter proceeded without incident.

7. The Child Support Registrar has submitted that the Appeal is a weak one with poor chances of success. That may be so, but even a weak case deserves its time in Court (see Linden v Commonwealth (No.2)[7]).

   [7] (1996) 136 ALR 251

8. It has not been put that the Appellant’s case is vexatious or doomed to fail.  A brief perusal of the Notice of Appeal does not lead to the conclusion that the Appellant’s case has no reasonable prospects of success. It appears to be an arguable case.

9. It is interesting to note that the Registrar now only seeks security for costs in the sum of $6,581.00, a comparatively small amount. If that is the only amount now in contention, it hardly seems worth making an order for security for costs at all.

10. The reasons advanced for an order for security for costs backed up by a stay if the security is not meant are not convincing. The concern is that if a stay were to be granted there would be a potential to stifle the litigation. If the Appellant has an arguable case in his Appeal, he should be able to present that case at a reasonable opportunity as soon as the business of the Court will permit.

11. The Application will be dismissed. Directions will be made for the hearing of the substantive Appeal.

I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of Judge Scarlett

Associate: 

Date:  3 November 2015