Prietto & Abella
[2022] FedCFamC2F 807
•21 June 2022
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Prietto & Abella [2022] FedCFamC2F 807
File number: MLC 13606 of 2021 Judgment of: JUDGE BLAKE Date of judgment: 21 June 2022 Catchwords: FAMILY LAW – application by the Husband for summary dismissal of the Wife’s application for an alteration of property interests – where the parties had no assets at separation – where Husband acquired assets post separation – where the Wife’s case is not strong – where the Wife’s failure to specify the relief she seeks and the Husband’s failure to inquire as to the relief sought by the Wife means the Court cannot be satisfied the Wife has no reasonable likelihood of success in the litigation even though her case is a weak one – application for summary dismissal not granted.
FAMILY LAW – application by Husband for security for costs – where there are no assets in the jurisdiction and the parties reside overseas- where the Wife’s case is a weak one – where the Wife has outstanding costs orders against her – where the Wife stated she would not pay any costs orders – application for security for costs granted – Wife has leave to file amended application for an adjustment of property interests once security for costs is paid
Legislation: Family Law Act 1975 (Cth), ss 44(3A)(c)(i), 75(2), 79, 79(2), 79(3), 79(4), 117(1), 117(2), 117(2A)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021, ss 10.09, 10.11, 12.02, 12.04
Federal Court of Australia Act 1976 (Cth) s 31A(2)
Cases cited: Beck v Beck (2004) FLC 93-181
Bretton v Bondai [2013] FamCAFC 168
Deng & Galinski [2021] FCCA 843
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125
Lindon v Commonwealth (No.2) (1996) 70 ALJR 541
Luadaka v Luadaka [1998] FamCA 1520
Spencer v Commonwealth (2010) 241 CLR 118
Division: Division 2 Family Law Number of paragraphs: 61 Date of hearing: 24 May 2022 Place: Melbourne The Applicant: Appeared in Person Counsel for the Respondent: Mr O’Grady Solicitor for the Respondent: Smith Family Law ORDERS
MLC 13606 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS PRIETTO
Applicant
AND: MR ABELLA
Respondent
ORDER MADE BY:
JUDGE BLAKE
DATE OF ORDER:
21 JUNE 2022
THE COURT ORDERS THAT:
1.The Wife has leave to pursue her application under section 79 of the Family Law Act 1975 (Cth) (‘the Act’) out of time.
2.The Wife’s application to suspend or review the order for divorce made 22 May 2020 be summarily dismissed.
3.The Husband’s application for summary dismissal of the Wife’s application for an adjustment of property interests be dismissed.
4.Subject to the Wife complying with order 5, the Wife has leave to file an Amended Initiating Application seeking orders for an adjustment of property interests under section 79 of the Act.
5.The Wife pay the amount of $50,000 into the court to be held as security for costs pending the determination of the Wife’s application under section 79 of the Act and any application for costs arising from that application, to be released as directed by further order of the court.
6.The proceedings be stayed pending the Wife’s compliance with order 5 above.
7.In the event the Wife does not pay $50,000 into the court as payment for security for costs within 90 days of the date of this order, the proceedings be dismissed.
8.The matter be adjourned to 3 October 2022 at 12.00pm for mention before Judicial Registrar Taylor at the Federal Circuit and Family Court of Australia.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Prietto & Abella has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE BLAKE:
On 7 December 2021, Ms Prietto (‘Wife’) filed an application in this Court. She is unrepresented. She seeks final and interlocutory orders as follows:
‘2. Final orders sought
1- Unpaid spousal maintenance to be paid.
2- Return of Property
3- Property share
4- Share of superannuation and pensions.
5- Judical review nullity/suspension of Order for divorce.
Interlocutory or procedural orders sought
Nullity/suspension of order for divorce and considering financial settlement’
On 9 April 2022, Mr Abella (‘Husband’) filed a Response. In that response, he seeks, inter alia, orders pursuant to section 44(3A)(c)(i) of the Family Law Act 1975 (C’th) (‘Act’) and rules 10.09 and 10.11 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (‘Rules’) that the Wife’s application be summarily dismissed, and that the Wife pay costs. The Husband also seeks an order for security for costs in the event his application for summary dismissal is not successful.
For the reasons that follow I have decided that the Wife’s application should not be summarily dismissed and that she have leave to file an amended application, provided that she pays $50,000 as security for costs.
PRINCIPLES RELATING TO AN APPLICATION FOR SUMMARY DISMISSAL
Rule 10.09 of the Rules provides as follows:
10.09 Application for summary orders
(1)A party may apply for summary orders after a response has been filed if the party claims, in relation to the application or response, that:
(a) the court has no jurisdiction; or
(b) the other party has no legal capacity to apply for the orders sought; or
(c) it is frivolous, vexatious or an abuse of process; or
(d) there is no reasonable likelihood of success.
(2)An application under this rule must be made by filing an application in accordance with the approved form.
Rule 10.11 relevantly provides that on application, the Court may dismiss any part of a proceeding.
The High Court of Australia has noted that the power to order summary judgment must be exercised with ‘exceptional caution’: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125.
In Lindon v Commonwealth (No.2) (1996) 70 ALJR 541 at 544-54, Kirby J set out the following principles governing summary dismissal applications:
‘1.It is a serious matter to deprive a person of access to the courts of law for it is there that the rule of law is upheld, including against government and other powerful interests. This is why relief… is rarely and sparingly provided.
2.To secure such relief, the party seeking it must show that it is clear, on the face of the opponent's documents, that the opponent lacks a reasonable cause of action or is advancing a claim that is clearly frivolous or vexatious.
3.An opinion of the court that a case appears weak and such that it is unlikely to succeed is not, alone, sufficient to warrant summary termination. Even a weak case is entitled to the time of a court. Experience teaches that the concentration of attention, elaborated evidence and argument and extended time for reflection will sometimes turn an apparently unpromising cause into a successful judgment.
4.… If there is a serious legal question to be determined, it should ordinarily be determined at a trial for the proof of facts may sometimes assist the judicial mind to understand and apply the law that is invoked and to do so in circumstances more conducive to deciding a real case involving actual litigants rather than one determined on imagined or assumed facts.
5.If, notwithstanding the defects of pleadings, it appears that a party may have a reasonable cause of action which it has failed to put in proper form, a court will ordinarily allow that party to reframe its pleading…
6.The guiding principle is… doing what is just. If it is clear that proceedings within the concept of the pleading under scrutiny are doomed to fail, the court should dismiss the action to protect the defendant from being further troubled, to save the plaintiff from further costs and disappointment and to relieve the court of the burden of further wasted time which could be devoted to the determination of claims which have legal merit.’
(Footnotes omitted)
In Bretton v Bondai [2013] FamCAFC 168 at [59], the Full Court noted that the test of ‘no reasonable prospect of success’ is different to the ‘doomed to fail’ test and it need not be shown that the application is doomed to fail. I accept the test I am required to apply in this case is whether the Wife has no reasonable likelihood of success, consistent with the Rules.
In Spencer v Commonwealth (2010) 241 CLR 118, French CJ and Gummow J, in considering section 31A(2) of the Federal Court of Australia Act 1976 (Cth) and the power of the Federal Court to order summary dismissal, stated that:
‘That may be a judgment of law or of fact, or of mixed law and fact. Where there are factual issues capable of being disputed and in dispute, summary dismissal should not be awarded to the respondent simply because the Court has formed the view that the applicant is unlikely to succeed on the factual issue…’
In Beck v Beck (2004) FLC 93-181, a Full Court of the Family Court stated, inter alia, that applications for summary dismissal must be determined on the basis only of the material put forward by the respondent to the application (in this case, the Wife), and an applicant for summary dismissal has no right to adduce any evidence at a summary hearing to contradict the evidence of the principal applicant in the proceeding.
I intend to approach this matter in accordance with the principles set out above. I note that the Court is being asked to assess whether there is no reasonable likelihood of the Wife’s application succeeding. That application concerns inter alia alteration of the property interests of the parties. If the application proceeds, a question before the Court will be the identity and value of the assets and property of the parties at the date of the hearing. The Wife in her material has disclosed that she has no assets or, at the very least, very minimal assets, though she has stated she has access to pensions, the source and amount of which is not clear on the material before me. The Husband has filed material which discloses assets to the approximate value of $785,000. It is appropriate in the circumstances of this matter to take into account the evidence of the Husband as to the identity and value of assets available for distribution. It is not evidence that contradicts evidence of the Wife. Otherwise, in assessing the application for summary dismissal, I have not had regard to the evidence filed by the Husband, unless I have expressly noted that to be the case.
BACKGROUND FACTS
There is a considerable history between these parties spanning continents and decades. It is not necessary to recite all of that. A brief summary is noted below.
The Husband and Wife are both 62 years old. The parties are originally from Country B. They married in City C in 1981. They subsequently had four daughters, all of whom are now adults, and the last of whom was born in 1994.
The parties lived in various parts of the world throughout their relationship including in Country B, the USA and Country D. While the parties were in Country D in 2003, the Husband was offered employment in Australia. He accepted that offer and moved to Australia leaving the Wife and the children behind. The Wife acknowledges physical separation occurred in 2003. The Wife also says a mutually agreed legal separation agreement was signed by the parties in Country D in ‘2003’ but that the Husband did not ratify it with the Court in Country D.
At the time of separation, the parties eldest child was approximately 22 years of age, the second child was approximately 13 years of age, the third child was approximately 12 years of age and the fourth child was approximately 9 years of age.
Following his arrival in Australia, the Husband sent money to the Wife and the children. This seemingly ended when the children ceased living with the Wife in 2004. The Wife’s material says little, if anything as to what occurred in 2004 and thereafter in respect of the children. The Husband says the Wife assaulted the eldest daughter in 2004, the children were placed in a refuge in City E before being collected by the Husband one month later, the Husband arranged for the children to move to Country B to live with family and then the children came into his direct care in Australia in 2007. It is unclear when the Wife last saw the children, or whether she retains any contact with them.
On 9 October 2019, the Husband filed an application for divorce in Australia. On 20 February 2020, a Registrar of the then Federal Circuit Court of Australia granted the order for divorce, to become absolute in one month.
On 19 March 2020, the Wife filed an application for review of the divorce order. That application was heard by Judge Carter. On 20 May 2020, Judge Carter granted the order for divorce.
The Wife appealed the decision of Judge Carter. On 6 November 2020, the appeal was dismissed. The divorce order issued was to take effect on 7 December 2020. It seems thereafter the Wife sought to stay the divorce order but ultimately filed a notice of discontinuance.
As matters presently stand, the Wife is temporarily residing in Country D and also has permanent residency in the UK. The Husband resides in the USA. The Husband is a citizen of Australia.
The Wife states in her affidavit that she does not own any assets, house or car. Despite that, in her Financial Statement, she says she has $17,000 in personal savings. She also says ‘I do not have any substantial pension either’. The value of the not ‘substantial’ pension is not disclosed. The Wife also states that the ‘state pensions from the UK and Country D will be minimal when I reach my retirement age’.
The Husband did not file a Financial Statement. He deposes however, to currently having savings of $400,000, superannuation of $378,000 and being the owner of a car valued at $7000.
CONSIDERATION
Judicial review of divorce order
The Wife seeks that the divorce order be reviewed or suspended. She seeks that order on the basis that the Court does not have jurisdiction in the matter.
The divorce order made by Judge Carter was the subject of an appeal by Strickland J, which he dismissed. The grounds of appeal filed by the Wife before Strickland J did not raise the issue of jurisdiction. Strickland J, however, in considering the appeal noted that Judge Carter had found the Court had jurisdiction. Strickland J took no issue with this finding and ultimately dismissed the Wife’s appeal. It does not appear that the Wife pursued to completion any appeal from the decision of Strickland J.
The decision of Strickland J is a decision of an appellate court that is superior to this Court. This Court has no power to review the appeal decision or to suspend the order for divorce which has, in any event, come into effect. In the circumstances, the Wife does not have any reasonable likelihood of success in pursuing this aspect of the relief which she seeks. This aspect of her claim must be summarily dismissed.
The Wife’s application for financial orders
I have set out earlier in these reasons the orders sought by the Wife. The orders are not particularised and are in essence little more than general statements. Proposed orders 2 – 4 contained in the Initiating Application I understand to be an application by the Wife for an order altering the property interests of the parties under section 79 of the Act. Proposed order 1 seeks ‘unpaid spousal maintenance’ but it is not clear to what that refers, or whether any maintenance is said to be owed under any existing order or agreement.
At the outset, the Husband objected to the Wife’s application being entertained by the Court because it has been filed one day out of time. The Husband submitted that while the delay was not significant, the Wife needs to demonstrate to the Court that she is suffering from hardship. The Husband submitted that the Wife’s material does not disclose that she is suffering from hardship.
I accept that the Wife’s material on the issue of hardship may be described as ‘thin’ at best. The delay, however, is only one day. The Husband accepted that this point was not his best point. I agree. I would grant leave to the Wife to file the application and pursue it one day out of time.
The Husband also submitted that the application of the Wife was an abuse of process and should be dismissed on that basis. The Husband submitted that the Wife had, on the one hand, submitted that the Court had no jurisdiction to determine matters in dispute between the parties, but on the other hand, was asking the Court to exercise jurisdiction. It was submitted by the Husband that it is an abuse of process to bring an application in the Court knowing or believing it to be the inappropriate forum to determine an issue between the parties.
I accept that the Wife challenges the jurisdiction of the Court on one hand by seeking to challenge the divorce order, while on the other hand seeking to utilise the Court’s jurisdiction to pursue an alteration of property interests. The Wife, however, is unrepresented. Not only that, but it is the case that the Court has jurisdiction in relation to property matters. Counsel for the Husband did not contend otherwise. In those circumstances, I hesitate to say that the Wife knows this Court is an inappropriate forum to pursue her claims, or that what has occurred is an abuse of process. I therefore decline to dismiss the claim of the Wife on the basis that what she is doing is an abuse of process.
I turn now to consider whether the Wife’s application for an alteration of property interests has no reasonable likelihood of success.
An order altering property interests under section 79 of the Act will only be made if the Court is satisfied that in all the circumstances, it is just and equitable to make such an order (section 79(2)). Section 79(4) sets out the matters the Court is required to consider. Whether the Wife’s application for property orders has no reasonable likelihood of success must be considered in light not only of the principles relating to summary dismissal which I have summarised earlier, but also, the principles and approach to be applied in relation to the determination of property matters.
Recently in Deng & Galinski [2021] FCCA 843, the Chief Justice summarised the principles the Court applies in respect of an application under section 79 of the Act. The Chief Justice stated:
34.‘As the Full Court has iterated on a number of occasions, this is broadly speaking a four-step process involving:[1]
[1] AJO & GRO [2005] FamCA 195 at [46] citing Ferraro & Ferraro (1993) FLC 92-335 at 79,560.
(a) Identification of the parties’ net assets and liabilities at the date of trial;
(b)Assessment of the financial and non-financial contributions made by the parties pursuant to s 79(4)(a) - (c) of the Act;
(c) Consideration of s 75(2) factors; and
(d)Undertaking a holistic overview in considering whether the proposed orders are just and equitable.
35.In addition, s 79(2) of the Act provides that the Court must not make any order under s 79 of the Act unless satisfied that, in all the circumstances, it is just and equitable to do so.[2]
36.In Stanford v Stanford (2012) 247 CLR 108 (‘Stanford’) the High Court of Australia made clear that ss 79(2) and 79(4) of the Act impose two distinct statutory requirements which must not be conflated: firstly to determine whether it is just and equitable to make an order for alteration of property interests at all, and secondly to determine what order would be just and equitable in percentage or monetary terms.
37.Nevertheless, the factors under s 79(4) of the Act may, along with any other relevant matters, inform the Court’s determination under s 79(2), so long as there is separate consideration under the two subsections as required by the Act.’[3]
[2] Mallet v Mallet (1984) 156 CLR 605, 647.
[3] Chapman & Chapman [2014] FamCAFC 91 at [9] per Bryant CJ.
It seems clear from the material filed that there are assets available for division between the parties that will exist at the time of trial. Those are the Husband’s assets which I have referred to earlier. This may be an incomplete picture in the circumstances where the Wife receives a pension the value of which is not disclosed, and where the Husband has not filed a financial statement. Nevertheless, prima facie, there are or will be assets available for division.
In a proceeding under section 79, the next issue would be to consider the contributions by each of the parties to the asset pool. The material filed by the Wife discloses, inter alia, the following in respect of contributions:
(a)the parties moved into rental accommodation paid for by their parents after getting married;
(b)in 1989, the parties purchased a three bedroom home in City C for around $US38,000;
(c)in around 1994, the house in City C was sold for $US92,000, and the money was used by the parties to support themselves, the education of their daughters and to ‘complement’ the Husband’s training;
(d)in the (US) summer of 2002, the Husband was dismissed from his position and the Wife lost an employment opportunity. The parties returned to Country D;
(e)on return to Country D, the parties and their four daughters ‘rented a large one-bedroom flat with five beds, the best we could afford because all our savings from our home were gone’;
(f)the Husband worked in Country D ‘for just one month with no contract’ and the parties received ‘financial support mostly from my family, as well as government support that I was entitled to. My oldest daughter worked as an educator and was saving money to move back to the US to marry her boyfriend, and also provided some support for the family expenses’;
(g)the Husband obtained a job offer in Australia and moved to Australia;
(h)the Husband sent money back to the Wife and the children, however he stopped sending ‘alimony’ when the children went to live in Country B.
It is apparent from the Wife’s material above that whatever contributions might have occurred up to that point, at the time of separation in 2003, the parties did not have any assets available for distribution.
There is then the question as to what occurred between separation in 2003 and the present. It is in this period that the Husband acquired the assets referred to earlier. The material filed by the Wife and information obtained from her during the hearing discloses that:
(a)when the Husband left for Australia, the children initially remained living with her in Country D;
(b)the Husband sent money from Australia to the Wife and the children in Country D;
(c)the children ceased living with the Wife in around May 2004. The Husband ceased sending money to the Wife once the children ceased to be in her care;
(d)the Wife sent gifts and parcels to the children and for the children when they were in the care of the Husband, but these were rejected.
From the information above, the following inferences may be drawn:
(a)The Wife made a contribution in caring for the children (particularly the younger children) from the time of separation until May 2004. She did not make any contributions toward the care or welfare of the children after this time, and those contributions she did seek to make by way of gift or parcels were rejected;
(b)The Husband made contributions in caring for the children (particularly the younger children) after they ceased living with the Wife.
It is also clear from the material filed by the Wife that she did not make any contribution to the assets acquired by the Husband after 2003. She did not claim in her documents or before me that she made any contributions to the acquisition of those assets.
I asked the Wife to identify what contributions she had made since 2003. Her answer, in summary, was that she had made contributions to the marriage from its commencement to the time the parties separated. The Wife asserted that the Husband would not be in the position he is today, and have access to the assets he has today, had she not made the contributions she made between 1981 and 2003. She identified those contributions as including the income she generated from her work during this period, and also her care of the children in this period. She asserts she was the primary caregiver during this period.
I accept for the purposes of the application before me that the Wife made the contributions she claimed during the period 1981 to 2003. It also seems clear from the Wife’s material, however, that the Husband made contributions during this period. The Wife conceded as much during the hearing.
Contributions are to be assessed holistically. In that context, both the contributions of the Husband and the Wife in the first 22 years of their marriage will need to be assessed and weighed in any trial. There does not seem to be any doubt that both made contributions. There are two difficulties, however, that confront the Wife. The first is that at separation in 2003, despite the contributions of the Husband and the Wife, they had no assets to divide between them. They were reliant on the generosity of others and their eldest daughter. Second, on her own evidence, the Wife has made minimal if any contributions over the period 2003 to 2020. At its highest, on her material, she looked after the welfare of the children for a period of approximately 8 – 9 months in the period 2003 to 2004. Even during this period however, she made no financial contribution to the welfare of the children. Furthermore, she made absolutely no other contribution in the period 2003-2020. She made no financial contribution to the assets acquired by the Husband in this period. Furthermore, the Husband contributed financially to the children (being the younger children aged under 18 years), and contributed to the welfare of those children from the time they left their Mother’s care in 2004 until they reached 18 years.
The next matter a Court would need to assess is the existence of any factors under section 75(2) of the Act. The Wife did not identify with precision any factors under section 75(2) of the Act that might weigh in her favour. Both parties are of similar age. Clearly, the Husband has property and resources. The extent of the Wife’s property and resources, however, remained somewhat unclear. She claims to have access to pensions the amount of which is unclear. There are no children under 18 years to be cared for. The marriage was a long one, the parties have effectively been separated for a long time now and a question would arise as to whether in that context, the earning capacity of the Wife could be said to be affected. The Wife does not lay claim to any health conditions, however asserts that the Husband suffers from mental health issues which if correct, may be regarded as a factor in his favour.
Finally, there would be a question as to whether it was just and equitable to make an order altering property interests in all the circumstances of the case. On one view, and arguable the better view, it can be seen how in the circumstances of this case, it would not be just and equitable to order an alteration of property interests. That is because, in short, the parties had nothing at the time separation, and the Wife has made a very negligible contribution to the marriage after separation (which coincides with the period of time the Husband acquired his assets).
It is difficult, however, to be certain about this. The difficulty arises because the Wife has not specified with precision exactly what relief she seeks. The Application seeks, generally, a division of property, but it is not clear what quantum, or what percentage split, the Wife seeks. The Husband has made no attempt to find out. If the Wife, for example, sought a 60/40 split of the assets in her favour, or even a 50/50 split of the assets in her favour, it might readily be able to be concluded that the Wife’s application has no reasonable likelihood of success. If, however, the Wife only sought a small adjustment, it might be found that the Wife has a prospect for success of her application. The difficulty confronting the Court at present is that there is no way of knowing because the Wife has not set out with any degree of precision what she seeks.
I return then to the question of whether the Wife’s application has no reasonable likelihood of success. Balancing all of the competing considerations, in my view, it is unlikely that the Wife could persuade the Court to alter the property interests of these parties. While it might be unlikely and while the Wife’s case might be weak, I am not prepared to make a finding that the Wife has no reasonable likelihood of success in her application. Such a finding could only be made once it became clear what specific relief the Wife sought. In reaching this conclusion, I am also conscious of the fact the Wife is not represented and of the statements of superior courts that the power to exercise summary judgment should be used sparingly.
In light of these matters, I decline to summarily dismiss the Wife’s application for an alteration of property interests. The Wife’s application cannot, however, be allowed to stand as it is. She needs to specify with precision what relief she seeks. I will, subject to what follows, give leave to the Wife to file an amended application. That application must set out with precision exactly what final orders she seeks. It must set out with precision either the quantum of money she seeks from the Husband, or specify in percentage terms how the assets of each of the parties are to be split between them.
THE APPLICATION FOR SECURITY FOR COSTS
The Husband seeks that the Wife give security for costs.
The Court may order security for costs under section 117(2) of the Act. In making such an order, the Court must have regard to section 117(1), (2) and (2A). Furthermore, rules 12.02 – 12.04 deal with applications for security for costs. Rule 12.02 is of particular significance and provides as follows:
12.02 Application for security for costs
(1)A respondent may apply for an order that the applicant in the proceeding give security for the respondent’s costs.
(2)In deciding whether to make an order, the court may consider any of the following matters:
(a) the applicant’s financial means;
(b) the prospects of success or merits of the application;
(c) the genuineness of the application;
(d)whether the applicant’s lack of financial means was caused by the respondent’s conduct;
(e)whether an order for security for costs would be oppressive or would stifle the proceeding;
(f) whether the proceeding involves a matter of public importance;
(g)whether a party has an order, in the same or another proceeding (including a proceeding in another court), against the other party for costs that remain unpaid;
(h) whether the applicant ordinarily resides outside Australia;
(i) the likely costs of the proceeding;
(j) whether the applicant is a corporation;
(k) whether a party is receiving legal aid;
(l) any other relevant matter.
(3) In subrule (1):
respondent includes an applicant who has filed a reply because orders in a new cause of action were sought in the response.
In Luadaka v Luadaka [1998] FamCA 1520, a Full Court of the Family Court surveyed the authorities relating to security for costs. At paragraphs [61] – [63], the Full Court set out a list of non-exhaustive matters, which might be relevant to assessing an application for security for costs.
The Husband has capacity to meet his own costs given the state of his assets, though this is not necessarily a bar to security being granted. The Wife claims to own no assets, however has disclosed an amount of $17,000 in her bank account and also has access to pensions, the quantum of which has not been disclosed. It is therefore difficult to compare the financial position of one party against the other. I am prepared to assume for present purposes, however, that the Wife consistent with what she contended before me may not have the financial means to pay security for costs.
There are then the Wife’s prospects in the litigation. I have declined to make a finding that the Wife has no reasonable likelihood of success. That does not mean, however, that the Wife has a strong case. In my view, the case that the Wife presses is a weak one and the merits of the application are not strong. As I have said, I have my doubts that she could persuade a court to alter the property interests of the parties. It is difficult to see how she could expect to receive any alteration of property interests, let alone any substantial alteration, in circumstances where on her own material, she has made only an extremely negligible contribution to the marriage in the period 2003 to 2020 (the period in which the Husband acquired his assets) and where there seems little to no prospect of any adjustment for her under section 75(2). Indeed it seems to me there is a real issue as to whether the Court could be satisfied that in all the circumstances, it is just and equitable to make an order as required by section 79(2). In short, her prospects for success in any case are not strong on the current material.
There are then two matters which assume some significance in this case. First, the Applicant is ordinarily resident outside Australia. Indeed, it seems from her material that she has not visited Australia for some years. It does not appear that she has any assets in the jurisdiction. The Husband although a citizen of Australia, resides outside of Australia. These matters are likely to make it difficult to enforce any order, let alone a costs order. Secondly and significantly, the Wife is the subject of two costs orders following the proceedings before Judge Carter. Those costs orders remain outstanding. They have not been paid by the Wife. It seems unlikely that they will be paid, or that any future costs order that might be made will be paid. The Wife stated expressly before me that she would not be making any payments to anyone.
It is necessary to consider whether if granted, an order for security for costs would be oppressive or stifle the proceeding. It seems that such an order, if made, may well stifle the proceedings given the attitude of the Wife to paying any costs. That, however, needs to be balanced against the other factors I am required to weigh, including those factors to which I have already referred.
The costs of the proceeding seems likely to be not insignificant. Neither party seems to have assets in the jurisdiction. As such, assets including those already identified will need to be identified and valued. Valuations may need to occur in respect of the pensions the wife receives overseas. That may not be straight forward or inexpensive. It seems likely the Husband will continue to brief lawyers in Australia and the distance and differences in time zones may make that more difficult and more costly. There is then the fact that the marriage was one of lengthy duration and encompassed the parties living together in many different countries. The very length of the marriage and the circumstances surrounding it mean that gathering evidence of what occurred over the duration of the marriage will not be straight forward. I regard it as very unlikely that the Husband’s costs in the proceeding would be under $50,000. It seems more likely that costs would be in the vicinity of $50,000-$100,000.
There is no evidence before me that suggests this proceeding has any public importance. There is not any material that indicates the Wife has access to legal aid in Australia or an equivalent overseas, or that she may qualify for a grant of legal aid. There is no evidence that the Wife’s present financial predicament was caused by the Husband.
When all of these matters are considered, I am of the view that an order for security for costs should be issued. The significant matters weighing against an order for security being made is that if an order for security for costs is made, the Wife does not have the financial means to pay it and it may stifle the litigation. Those considerations are important, but in my view, they are outweighed by the other factors that I am required to take account of. These include the weak nature of the Wife’s claim, her residency outside the jurisdiction, her apparent lack of assets in Australia, her failure to pay to outstanding costs orders to date, and her point blank refusal before me to pay any costs orders. In the circumstances, I regard an order for security for costs as being necessary to secure justice between the parties.
The question then arises as to what the quantum of any security should be. The Court in assessing quantum, does not set out to give a complete indemnity to a person in the position of the Husband. Consideration must be given to whether the case might be compromised such that it never runs to trial.
There is always a prospect in any case, including this case, that it may resolve. The history of these parties, however, suggests that such an outcome is unlikely. The application for divorce was hard fought. The Wife gave serious consideration it seems to appealing the decision of Strickland J. Judge Carter variously described aspects of the Wife’s applications as having ‘no merit’. Accordingly, while this proceeding may settle, that seems unlikely given the attitude particularly of the Wife to date both in these proceedings and earlier proceedings.
When these matters are weighed, I am of the view that the appropriate amount to award as security for costs is an amount of $50,000.
I have indicated earlier in these reasons that the Wife will be given leave to file an amended application. I am of the view that the Wife should only be given leave to file an amended application and to pursue a property proceeding, once she has paid security for costs into court. Until that time, these proceedings should be stayed. If the Wife does not pay security for costs within 90 days of the date of this order, in my view the proceeding should then be dismissed. It is of no utility to keep the proceeding alive in the list of pending cases if the Wife does not pay the security as ordered. Orders will be issued to that effect.
I certify that the preceding sixty-one (61) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Blake. Associate:
Dated: 21 June 2022
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