Revanka and Medapati
[2020] FamCAFC 1
•7 January 2020
FAMILY COURT OF AUSTRALIA
| REVANKA & MEDAPATI | [2020] FamCAFC 1 |
| FAMILY LAW – APPEAL – SECURITY FOR COSTS – Where the respondent wife seeks security for costs of the appeal – Where the appellant husband is resident out of the jurisdiction with no assets within the jurisdiction – Where the appellant husband has clearly expressed his opinion that he is not bound by orders of this Court – Where the appellant husband has a history of non-compliance with costs orders – Where the appellant husband’s appeal lacks sufficient merit to outweigh those considerations – Where the appellant husband is ordered to pay security for costs, failing which his appeal is to be dismissed – Where the costs of this application are reserved in the appeal. |
| Family Law Act 1975 (Cth) s 117 Family Law Rules 2004 (Cth) r 22.45 |
| Frazier & Valdez (2016) FLC 93-729; [2016] FamCAFC 163 Medapati & Revanka [2018] FamCA 965 P S Chellaram & Co Ltd v China Ocean Shipping Co (1991) 102 ALR 321; [1991] HCA 36 |
| APPELLANT: | Mr Revanka |
| RESPONDENT: | Ms Medapati |
| FILE NUMBER: | BRC | 2961 | of | 2016 |
| APPEAL NUMBER: | NOA | 47 | of | 2019 |
| DATE DELIVERED: | 7 January 2020 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Kent J |
| HEARING DATE: | 7 January 2020 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 3 May 2019 |
| LOWER COURT MNC: | [2019] FamCA 274 |
REPRESENTATION
| THE APPELLANT: | In person via telephone |
| COUNSEL FOR THE RESPONDENT: | Mr Balzamo |
| SOLICITOR FOR THE RESPONDENT: | Hunter Solicitors |
Orders
The Appellant Husband have leave to appear on this application by electronic means.
The Appellant Husband pay to the trust account of the Respondent Wife’s solicitors the amount of $13,000 by way of security for the Respondent Wife’s costs of the appeal and that the funds be held in the trust account of the Respondent Wife’s solicitors pending further order.
Pending the Appellant Husband’s compliance with the preceding order the Appellant Husband’s appeal be stayed.
In the event that the payment required by Order (2) is not made within ninety (90) days of the date of these orders, the Appellant Husband’s appeal be dismissed pursuant to r 22.45 of the Family Law Rules 2004 (Cth).
The Respondent Wife’s costs of and incidental to this application for security for costs be reserved in the appeal.
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 Revanka & Medapati 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).
| THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE |
Appeal Number: NOA 47 of 2019
File Number: BRC 2961 of 2016
| Mr Revanka |
Appellant
And
| Ms Medapati |
Respondent
EX TEMPORE REASONS FOR JUDGMENT
On 3 May 2019, Forrest J made final orders determining property and parenting proceedings between Mr Revanka, whom for convenience I will refer to as “the husband” and Ms Medapati, whom for convenience I will refer to as “the wife”.
The husband filed a Notice of Appeal from those orders on 28 May 2019 (an Amended Notice of Appeal was filed on 4 September 2019). The appeal is yet to be listed to a sittings of the Full Court of this Court.
By Application in an Appeal filed on 29 July 2019, the wife seeks security for her costs of the appeal by way of an order that the husband pay to her solicitors’ trust account the amount of $17,547.39, the amount assessed as her party and party costs of the appeal. I interpolate here that the wife has an estimate that her actual solicitor and own client costs will be a sum of about three times that amount.
The wife seeks an order that the appeal be stayed pending the provision of security in the party and party costs amount and in the event that the security sum is not paid within 90 days of orders, that this appeal be dismissed pursuant to r 22.45 of the Family Law Rules 2004 (Cth).
The husband opposes the wife’s application. In the first instance the husband seeks that it be dismissed and as an alternative he proposes that if security is to be granted it be granted in no more than a sum of about $1,500 as a maximum.
Applicable principles
The power to make an order for security for costs is found in s 117 of the Family Law Act 1975 (Cth) (“the Act”). The wife has the onus of establishing the existence of circumstances that justify an order as to costs pursuant to s 117(2A) of the Act and in respect of the relevant discretionary considerations in the making of a security for costs order.
It is well settled that the purpose of an order for security for costs is to secure justice between the parties by ensuring that an unsuccessful party does not occasion injustice to the other. In Frazier & Valdez (2016) FLC 93-729 the Full Court observed the following about the exercise of the discretion and the factors which may be relevant to its exercise:
12.Whilst the exercise of the discretion depends upon the relevant circumstances of each case, in Luadaka & Luadaka (1998) FLC
92-830 the Full Court of this Court, after extensive review and reference to authority (and a leading text on costs), identified (at [62]) a (non-exhaustive) list of factors, additional to or in the context of those identified in s 117(2A) of the Act, which may be relevant to an application for security for costs. In summary, transposing that list to the context of an appeal, those factors are:
(a)The means of an appellant to satisfy an order for costs if he or she is unsuccessful;
(b)The financial circumstances of both parties: impecuniosity of the appellant is not alone sufficient to justify an order for costs but nor does it prevent an order being made if there are other grounds which justify an order. As regards the respondent, an order is not confined to cases where the respondent (the applicant for security) does not have the means to meet his or her costs – in appropriate circumstances an order may be made even if the applicant for security has the means to meet his or her costs;
(c)The prospects of success in the proceedings – ordinarily the Court will not undertake a detailed assessment of the likelihood of the appellant’s success unless it can be demonstrated that there is a high probability of success or failure;
(d)Whether the appeal is bona fide, whether it is genuine and not trivial, vexatious or a sham;
(e)Whether an order for costs would be oppressive or stifle the litigation: that prospect does not require a refusal of the application but is often a significant matter;
(f)Whether or not the litigation involves a matter of public importance (if so, this will militate against the making of an order);
(g)Whether or not there has been delay in bringing the application for security and consequent prejudice to the respondent (appellant);
(h)Other relevant matters may include any difficulties of enforcing an order for costs and the amount of costs to be incurred.
13.Many of the above factors find reflection in r 19.05(2) setting out the matters the Court may consider in deciding whether to make an order for security for costs.
14.Notably, subparagraph (g) of r 19.05(2) identifies as a potentially relevant factor:
(g)whether a party has an order, in the same or another case (including a case in another court), against the other party for costs that remains unpaid;
The case for an order for security for costs
Having considered the written submissions filed by each party in advance of today’s hearing and having heard the limited supplementary oral argument advanced at the hearing by each of counsel for the wife and the husband, who represented himself, the following factors can be identified as supporting the conclusion that there exists justifying circumstances for an order for security for costs to be made.
Husband a foreign resident
The husband is 55 years of age and resides in Country J with his current partner and their child who was born in 2017.
It has not been an issue in these proceedings that an order of an Australian Court is not readily amenable to enforcement in Country J.
The husband has demonstrated a consistent commitment not to enter Australia. On 27 July 2017, the Child Support Registrar caused the issue of a Prohibition of Departure Order against the husband pursuant to relevant child support legislation in respect of an outstanding child support debt owing by the husband in excess of $40,000 at that time in respect of the parties’ child.
Moreover, at [2] of his reasons for judgment delivered on 3 May 2019, Forrest J makes reference to the proceedings he determined on 22 November 2018[1] and there are cross references to those reasons for judgment in what I will term the primary reasons the subject of this appeal.
[1]Medapati & Revanka [2018] FamCA 965.
At [2], the trial judge noted that he then declared that the husband had acted in contempt of this Court in ways involving a flagrant challenge to the authority of this Court when he contravened orders previously made in some five different and serious respects.
The trial judge notes that although he had previously refused the husband’s application to attend the contempt hearing by telephone from Country J, and had ordered for him to appear in person, the husband did not appear on that day. Nevertheless, as his Honour records, his Honour allowed the husband to attend by telephone to be heard and to read his affidavit of evidence in chief and to permit cross-examination by telephone.
The trial judge records at [3] of those reasons that when his Honour declared that the husband had acted in contempt of the Court, his Honour ordered the husband to attend personally before the Court on 12 December 2018 in order to hear submissions from the husband as to the consequences that should be imposed upon him for the contempt. The trial judge records that the husband did not appear on that day and consequently a warrant for his arrest was issued.
The trial judge records that the final hearing of the property settlement proceedings and the parenting proceedings were listed for hearing but that the husband requested to appear by telephone at that hearing, which request was refused. The trial judge caused the husband to be advised that it would be necessary for him to appear in person at the hearing or to have a legal representative appear for him.
As his Honour records, in the end result, when the matter was heard in April 2019 the husband did not appear nor did a legal representative appear on his behalf.
I have made reference to, as did his Honour in the reasons referred to, the reasons for judgment delivered by his Honour on 2 November 2018 in the contempt proceedings. It bear emphasis that there has been no appeal from the determinations made by his Honour on that day. At [65] of those reasons, his Honour records this:
65.During the course of the hearing of this contempt application, the husband made his flagrant challenge to the authority of this Court patently clear. He told the Court many times during the hearing that the proceedings were “moot” and that they did not matter to him. He told the Court that he was a citizen of [Country J] and not Australia and that it was [Country J] law and orders of the [Country J] Courts that he was obliged to follow, not Australian law or orders of this Court. He told the Court that the wife, who is a resident of Australia, is a citizen of [Country J], too, and, as such, she is obliged to obey [Country J] law first and foremost.
As I have noted, Order (3) of the orders made on that day included an order that the husband return to Australia and appear before the Court in person, with or without legal representation, on the further hearing of the matter on 12 December 2018, and it was clear that what his Honour had in mind was the prospect of imposing some sanction or at least considering punishment in respect of the contempts as found.
The significance of the feature that the husband is a resident of Country J, and has made it clear and continues to make it clear that he will not return to Australia in the current circumstances, is that if the wife succeeds in resisting his appeal and obtains an order for costs in her favour, it is more likely than not that she will never recover those costs and never have any relevant means of enforcing an order for costs available to her.
As noted, the party and party costs estimated at some $17,500 are not the wife’s actual costs. Her estimate of the solicitor and own client component of her costs being about three times that amount.
The significance of the husband being resident out of the jurisdiction has often been observed in applications of this type as of fundamental importance, that is, where an applicant (or appellant) is a foreign resident with no assets within the jurisdiction. For example, in P S Chellaram & Co Ltd v China Ocean Shipping Co and Another (1991) 102 ALR 321 McHugh J observed at 323:
…
To make or refuse to make an order for security for costs involves the exercise of a discretionary judgment. That means that the court exercising the discretion must weigh all the circumstances of the case. The weight to be given to any circumstance depends not only upon its own intrinsic persuasiveness but upon the impact of the other circumstances which have to be weighed. A circumstance which may have very great weight when only two or three circumstances have to be weighed may be of minor significance when many circumstances have to be weighed. However, for over 200 years, the fact that a party, bringing proceedings, is resident out of the jurisdiction and has no assets within the jurisdiction has been seen as a circumstance of great weight in determining whether an order for security for costs should be made. Indeed, for many years the practice has been to order such a party to provide security for costs unless that party can point to other circumstances which overcome the weight of the circumstance that that person is resident out of and has no assets within the jurisdiction.
The husband attempts to address the question about having no assets within the jurisdiction by pointing to the feature that prior to the final orders of the trial judge, he in fact had property interests in Australia. That argument is nonsensical in circumstances where the trial judge has made orders vesting all Australian assets in the wife and the circumstance under contemplation is the husband being wholly unsuccessful in the appeal; that is, not disturbing that determination by the trial judge.
Thus it is the case that the husband is a foreign resident with no assets within the jurisdiction, which is a powerful factor in favour of making an order for security for costs.
Outstanding costs orders
Allied with the topic just discussed is the fact that the husband has failed to pay a number of costs orders made against him in favour of the wife in the course of the proceedings.
These include an amount of $11,388 ordered by Judge Coates in the Federal Circuit Court of Australia on 27 July 2017; $1,800 ordered by Senior Registrar Spink on 28 June 2018; $3,803.57 ordered by Forrest J on 18 September 2018; $30,000 ordered by Forrest J on 12 December 2018 and $200,000 ordered by Forrest J in the orders the subject of this appeal. It bears emphasis that the husband has not applied for a stay of any of the subject orders pending his appeal. There has been no appeal from any of the earlier costs orders referred to.
It follows then that there has been substantial non-compliance by the husband with orders for costs, a matter specifically referred to in the relevant rule of court as a discretionary consideration for the grant of security for costs.
To that list may be added the feature that, as the wife deposes at paragraph 9 of her affidavit in support of this application, there was an earlier appeal instituted by the husband against some interim orders which appeal he subsequently abandoned. As the wife deposes she has not, by reason of the feature about an inability to enforce orders at a practical level in Country J, sought to address the question of her costs incurred with respect to that discontinued appeal.
In my judgment, the outstanding costs orders corroborates what has already been said concerning the husband’s residence in a foreign jurisdiction, and the unlikelihood of successful enforcement of an order for costs at the conclusion of these proceedings in the event that the wife succeeds in defending the appeal and obtains an order for costs.
Notably, the wife deposes in her material to the total costs she has incurred thus far in these proceedings as being a sum in excess of $500,000.
It is therefore necessary to consider whether the husband can identify any factor or relevant consideration which overcomes the substantial weight to be given to the factors already referred to. The husband contends that because of his financial circumstances, effectively what he described as his “impecuniosity”, an order for security for costs would stifle the appeal.
The husband also contends that it would be obvious to an appeal court that his appeal has merit and is likely to succeed.
Neither of these contentions have any substance.
As it seems to me, the difficulties the husband confronts with respect to advancing these contentions includes that the findings of the trial judge are detailed by reference to firstly, his non-compliance with a variety of orders, constituting contempt in the determination made on 22 November 2018.
There is also a detailing by his Honour in those reasons of the husband’s abject failure to make full and true disclosure of his financial circumstances, despite orders of the Court and requests by the wife, in conformity with those orders, that he so do.
The trial judge details his reasons for finding that the husband is not a witness of credit and that his evidence could not be accepted. There are detailed, in both sets of reasons for judgment of his Honour referred to, the husband’s failures to provide documents corroborating his case in substantial respects.
I note here that, notwithstanding the articulation by the trial judge in both the reasons delivered on 22 November 2018 and the reasons delivered in May 2019 as to the respects in which the husband has not provided any documentary corroboration of his claims, there has been no attempt, for the purpose of this application, by the husband to remedy that. In other words, there is no additional material advanced on this application by the husband to redress those significant gaps in evidence identified by the trial judge.
Merits of the appeal
The husband’s Amended Notice of Appeal contains two grounds of appeal as follows:
1. Judge overlooked evidence and made severe mathematical calculation errors resulting in unjust distribution of marital assets.
2) Judge’s decision as to the manner in which the father is allowed to maintain contact with his son is unreasonable. Appellant wishes an independent panel to review this decision to provide an opportunity for him to maintain contact with the son.
(As per the original)
Ground 1
Whilst the first of these grounds is lacking in specifics, the husband in his Summary of Argument filed on 21 November 2019 asserts that the trial judge ignored the “elephants in the room”.
By way of background, it can be seen that at the trial the husband attempted to argue that his liabilities far outweighed any assets that were available. The discussion, and subsequent rejection, of this argument is seen at [35] of the trial judge’s reasons.
The husband alleges there is a civil judgment against him in the amount of the Australian equivalent of $3.3 million. His evidence in support of the existence of that debt was contained in his affidavit filed on 29 March 2019 which annexed a three page document purporting to be from the High Court of [Country J] listing the husband’s name as the defendant.
The trial judge deals with the difficulties with that document in terms of accepting its authenticity, particularly in circumstances that it comes against a background that his Honour was satisfied in the contempt proceedings that the husband had fabricated documents for the purpose of his case. I repeat, the husband has not sought to redress the deficiencies identified by his Honour with respect to authenticating that document on the hearing of this application.
The husband also argued at trial that he has credit card debts of approximately $300,000. The trial judge rejected that contention stating at [49] of the reasons that:
49.The husband does also attach a spread sheet to his affidavit filed on 29 March 2019 in which he clearly concedes selling properties in [Country K], [Country L] and [Country J] in recent years, as well as motor cars in [Country J]. He also says, however, that he has credit card liabilities totalling just over $300,000. He adduced no documentary evidence with that spreadsheet or affidavit to support any of those assertions.
In his Summary of Argument for this application, the husband claims documents evidencing the debt were tendered in Court but fails to identify those documents or cite any relevant transcript extracts.
The husband also argued that at the time of the trial he had an ongoing criminal charge of insider trading which, if he was found guilty, would attract a monetary penalty. The husband currently claims that, on 11 September 2019, that penalty crystallised at $3.2 million.
I interpolate here that given the trial judgment was delivered in May 2019, it is unclear how the husband alleged the trial judge erred in not considering it. In any event, the trial judge dealt with this alleged (then contingent) liability where his Honour said:
47.The husband also says that he is facing trial in [Country J] on a criminal charge of insider trading and that he has a contingent liability of about AUD1 million if he should lose. Again, though, the husband has not adduced, in admissible form, any evidence that persuades me that this is the truth.
(Emphasis added)
Ground 2
The husband’s second ground of appeal lacks specificity as to how it is he contends the trial judge’s determination is “unreasonable”. In his Summary of Argument, the husband seems to argue that the trial judge was actually biased against him which caused his Honour to make the “unreasonable” order for the child to dictate when and if he was to communicate with the husband.
In his Summary of Argument the husband says at paragraphs 39, 40 and 41:
39.Based on the terms of the above order by the trial judge, his Honour expects [the child] (at the time the report was done) to make an attempt to call his father - even so, at an overseas number. For the interest of this Court, the son has NEVER contacted the Appellant since the order was made by the trial judge. This order by the trial judge, besides being unfair and illogical, reeks of contempt and vendetta. Any Appellate court can clearly see that there is bad blood between the trial judge and the Appellant by the granting of such an unreasonable, illogical and punitive order.
40.The Appellant will be able to prove to the Appellate court that the trial judge had at the outset cast personal aspersions on the Appellant and when the Appellant, at the 2nd appearance before the trail judge, asked for the trial judge to be recused in 2017, he refused. From that incident, the trial judge had continued to make racist, partisan and unflattering remarks against the Appellant and had unilaterally dismissed all of the Appellant's submissions. There is an incident where the Appellant submitted the written judgement (in plain English) of the [Country J] court on the $3.3 mil civil debt (that was excluded in the marital pool calculations by the trial judge) and the trial judge dismissed that evidence because the [Country J] court's letter-head contained [foreign language]. For the interest of this Court, the said order's letter-head, as with all [Country J] government letterheads, are written in [Country J language] - both scripts of the national language of [Country J]. In these days of the global knowledge availability (ie via the internet), an learned man like the trial judge cannot be let of for using his ignorance to dismiss foreign court’s orders written in English.
41.Based on his expression, not only the trial judge is ignorant of foreign court documents (and scripts), he also appears to be blinded by his hatred of the Appellant so much so, he finds absurd reasons to dismiss evidence. Transcript will show that the trial judge had taken the matter personally as he saw the Appellant's standing up to his bullying ways from day one, as a flagrant challenge to his authority. Following this stance, the trial judge then continued to ignore all evidence from the Appellant when making the asset separation calculations. This is a serious allegation of bias by the Appellant, that caused the incorrect calculation of the marital pool position by the trial judge - it clearly warrants the intervention of an appellate court.
(As per the original)
Notably, with respect to these matters the husband’s application for the trial judge to recuse himself was made in 2017 and dismissed. No such application was repeated and no appeal was brought by the husband against the dismissal of that application.
Next, the husband offers no transcript references to demonstrate any bias on the part of the trial judge and indeed the transcript shows that the husband raised no specific issue of bias before the trial judge in advance of, or at, trial.
The husband contends in his Summary of Argument that in the final trial the trial judge engaged in “one-sided conversations” with the wife’s counsel and alleges that the trial judge “colluded” with the wife’s counsel (see paragraphs 14 and 16 of the husband’s Summary of Argument).
These allegations would seem to stem from the fact of the husband’s
non-appearance at the final trial, which he falsely describes as the trial judge deliberately preventing him from being heard. However, as was made clear in the trial judge’s reasons, the husband had requested to appear by telephone at the final hearing but the Court specifically informed him that he needed to appear in person or have a legal representative appear on his behalf ([5] and [6]).
I am satisfied that the husband does not demonstrate that there is such merit in his appeal that his prospects of success are such that this factor outweighs the very substantial factors earlier referred to in favour of an order for security for costs of the appeal being made.
Financial circumstances
The wife has been unemployed since 2000 and deposes to having severely limited employment prospects. I have referred to her substantial liability for legal costs.
With respect to the husband, his financial circumstances are essentially unknown. He proffers the assertion that his earnings in Country J are limited, but the overriding fact is that the trial judge found the husband, for reasons his Honour extensively detailed, as having failed to make full and true disclosure of his assets and financial circumstances; and as having disposed of assets contrary to orders; and not explaining the use of funds or the amount of any funds derived from such sales.
Amount of security for costs
With respect to the amount claimed for security for costs, there is a schedule set out in support of the wife’s claim in her affidavit. In the course of argument, I took up with her counsel some of the items appearing in that schedule, in particular the items described as “other legal work” in the amount of $2,500 (approximately) and the item “other work” in the amount of $1,630.40. Obviously, those two items total something over $4,000.
In my judgment, it is reasonable in the circumstances to order, by way of party and party costs for security, the amount of $13,000, having broadly reduced the sum claimed by the items referred to.
Costs of this application
In the event that this application were to succeed the wife sought her costs of the application. The wife has filed a Costs Schedule in support of that application in accordance with the directions made, as is the usual course, by the Appeals Registrar. As I raised with counsel for the wife during the course of the argument, as it seems to me the proper course to take is to reserve the wife’s costs of this application to the outcome of the appeal.
I therefore do not propose to make the order with respect to the costs of this application itself but I will order that the wife’s costs of and incidental to this application be reserved in the appeal.
Orders
For these reasons I make the following orders:
(1)The Appellant Husband have leave to appear on this application by electronic means.
(2)The Appellant Husband pay to the trust account of the Respondent Wife’s solicitors the amount of $13,000 by way of security for the Respondent Wife’s costs of the appeal and that the funds be held in the trust account of the Respondent Wife’s solicitors pending further order.
(3)Pending the Appellant Husband’s compliance with the preceding order the Appellant Husband’s appeal be stayed.
(4)In the event that the payment required by Order (2) is not made within ninety (90) days of the date of these orders, the Appellant Husband’s appeal be dismissed pursuant to r 22.45 of the Family Law Rules 2004 (Cth).
(5)The Respondent Wife’s costs of and incidental to this application for security for costs be reserved in the appeal.
I certify that the preceding sixty (60) paragraphs are a true copy of the ex tempore reasons for judgment of the Honourable Justice Kent delivered on 7 January 2020, edited to correct grammatical errors and some infelicity of expression.
Associate:
Date: 8 January 2020
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