Rilak & Tsocas (No. 3)
[2017] FamCAFC 217
•13 October 2017
FAMILY COURT OF AUSTRALIA
| RILAK & TSOCAS (NO. 3) | [2017] FamCAFC 217 |
| FAMILY LAW – APPEAL – APPLICATION IN AN APPEAL – SECURITY FOR COSTS – Where the appeal has limited prospects of success – Where there are outstanding costs orders against the mother – Where an order for security for costs would likely stifle the appeal – Where there are circumstances justifying an order for security of costs – Where order conditional upon the father’s solicitors providing undertaking – Application allowed. |
| Family Law Act 1975 (Cth) s 117 Family Law Rules 2004 (Cth) r 19.05 |
Bartsch & Redman (2014) FLC 93-584
Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337
| Lawrence & Tan [2012] FamCAFC 62 |
| APPELLANT: | Ms Rilak |
| RESPONDENT: | Mr Tsocas |
| FILE NUMBER: | SYC | 2062 | of | 2010 |
| APPEAL NUMBER: | EA | 60 | of | 2017 |
| DATE DELIVERED: | 13 October 2017 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Ainslie-Wallace J |
| HEARING DATE: | 15 August 2017 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 11 May 2017 |
| LOWER COURT MNC: | [2017] FamCA 289 |
REPRESENTATION
| THE APPELLANT: | No appearance |
| THE RESPONDENT: | In person |
Orders
The appellant’s application for an adjournment be dismissed.
The appellant’s application for recusal be dismissed.
In the event that a solicitor acting for the respondent in Appeal EA 60 of 2017 files a Notice of Address for Service and provides to the Appeal Registry and to the appellant a written undertaking that the solicitor will hold the ordered security in trust on account of any costs order that may be made in the appeal, then the appellant shall pay to those solicitors the sum of $10,000 as security for any costs ordered in the appeal to be held in accordance with the terms of the undertaking.
In the event that the security as provided in Order (3) is not paid within 28 days of compliance with Order (3), then the appeal is stayed until the order is complied with.
The costs of the application for security for costs be reserved to the appeal hearing.
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 Rilak & Tsocas (No. 3) 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).
| IN THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EA 60 of 2017
File Number: SYC 2062 of 2010
| Ms Rilak |
Appellant
and
| Mr Tsocas |
Respondent
REASONS FOR JUDGMENT
Ms Rilak (“the mother”), by Notice of Appeal filed on 5 June 2017, appeals against an order for costs made by Rees J on 11 May 2017. The costs order was made consequent on her Honour’s dismissal on 22 July 2016 of the mother’s application seeking that Mr Tsocas (“the father”) be dealt with for contravening parenting orders.
The father filed an Application in an Appeal seeking an order pursuant to s 96AA(1) of the Family Law Act1975 (Cth) (“the Act”) that the appeal be dismissed. In the alternative, he sought an order that the mother give security for his costs of the appeal.
The hearing of the application was listed for 15 August 2017. Before the date of the hearing the father advised the Appeal Registry that he did not press the application for summary dismissal but did seek an order that the mother provide security for costs of the appeal. The mother did not appear at the hearing and the father appeared in person.
Before turning to the substance of the application before the court, it is important to detail some of the history of the litigation between the father and the mother. The parties married in 2008 and separated in February 2010, their child having being born in early 2010. The final parenting proceedings, which commenced on 27 January 2015, were protracted. During the parenting proceedings, on 4 June 2015, the mother brought an appeal against the dismissal of an application that the trial judge recuse himself from further hearing the matter. The appeal was dismissed on 24 June 2015. The mother also appealed against the trial judge’s final orders which were made on 13 November 2015. This appeal was dismissed on 27 February 2017.
On 17 March 2016 the mother filed a contravention application in which she alleged the father had not facilitated supervised contact visits and telephone calls between herself and the child and he was therefore in contravention of numerous orders. The hearing was on foot when the mother abruptly left the court and did not return. The matter proceeded in her absence. On 22 July 2016 Rees J dismissed this application and ordered that the parties file submissions in relation to the father’s application for costs.
In July 2016 Stevenson J reviewed a Registrar’s decision to reject an application for parenting orders proffered for filing by the mother. Her Honour found that the application sought to be filed was incompetent and dismissed the mother’s application for review.
In relation to both of these decisions the mother sought an extension of time in which to bring an appeal against their Honours’ decisions. Both applications were dismissed on 12 July 2017.
Following the receipt of the costs submissions, on 11 May 2017 Rees J ordered that the mother pay the father’s costs of the contravention application in the sum of $5,000.
On 5 June 2017 the mother filed a Notice of Appeal against this order, being appeal EA 60 of 2017. It is this appeal to which the present application relates.
The application for security for costs is supported by an affidavit of the father in which he sets out the history of the proceedings between the parties and further details the financial consequences which have attended the many court hearings.
On 14 August 2017, the day before the hearing of the father’s application, the mother filed a response to the application and an affidavit in response to the father’s affidavit. The mother sought orders that the application be dismissed and, if not dismissed, that the application be adjourned to an unspecified date but said to be “the end of September 2017”. The mother also sought orders that I, and five other judges of the court, recuse ourselves from further hearing any of the proceedings between the parties.
The mother did not appear on the hearing of the application.
The application for adjournment
On 31 July 2017 the mother was emailed copies of the father’s application and affidavit filed on 28 July 2017, and was informed by the Appeal Registry that the application was listed for hearing on 15 August 2017 at 10.00 am.
A procedural hearing in relation to the application was held by telephone on 1 August 2017 before an Appeal Registrar. The mother asserts that at that time the Registrar “cancelled” the hearing set for 15 August 2017. The mother contends that the Registrar said that the application would need to be put before the Full Court for determination. I interpolate here, clearly the Registrar was referring to so much of the application as sought summary dismissal. In any event, on 9 August 2017 the mother received an email from the Registrar confirming that the application remained listed for 15 August 2017. It was in this email that the Registrar noted that the father intended only to proceed on his application for security for costs.
On 11 August 2017 the mother contacted the Appeal Registry objecting to the hearing taking place on 15 August 2017 because she said that, having been told on 1 August 2017 that the hearing would not take place on 15 August 2017, only to be told on 9 August 2017 that it would proceed, she had not enough time to prepare and that she intended to file an affidavit in which she would challenge the father’s “false allegations” in his affidavit. The mother further contended that she had insufficient notice of the hearing to seek legal advice.
In fact, the mother filed an affidavit on 14 August 2017 in which she supported the merits of her appeal and in which she challenged the father’s evidence as to the costs incurred by him in meeting the contravention application.
The mother was informed by the Registrar on 14 August 2017 that the Registrar could not adjourn the hearing and that if she wished to seek an adjournment she would have to attend the hearing to make the application. The issue of an adjournment was thus rendered irrelevant because of the mother’s failure to appear.
Despite the mother’s failure to attend, I considered it appropriate to hear the application for security for costs given the matter’s protracted history, the issues to be determined, and the material which the mother had put before the court in her affidavit filed on 14 August 2017 which touched on the issues to be determined. Further, I took into account that having regard to the procedural history of this matter, there was little likelihood that to adjourn the hearing of the application would result in the mother bringing further evidence, and finally that to further adjourn the matter would operate to prejudice the father.
However, despite the foregoing, given the mother’s non-appearance, on 22 September 2017 an email was sent to her by the Appeal Registry in the following terms:
… In view of the fact that you did not attend the hearing, if you wish to put any further submissions before the court on [the father’s] application you must file and serve those submissions no later than Friday 6 October 2017.
In the event [the father] wishes to reply to any submissions you may file, his reply must be filed and served no later than Thursday 12 October.
The mother did not file any submissions in accordance with these directions. She apparently attempted to file submissions on 12 October 2017 which were rejected for filing as being out of time.
Recusal
As I have indicated, the mother sought an order that I recuse myself from further hearing this and other matters before the court concerning her. The apparent basis for seeking my recusal is found at paragraph 37 of the mother’s affidavit in which she says:
I seek that Justice Ainslie-Wallace who has been previously dealing in our family law matter and has rejected all my applications, one which is now subject to the Special Leave application in the High Court, will recuse herself to preside this hearing.
It is somewhat arid to consider an application for recusal in circumstances where the party contending for the order failed to appear to promote the application. It leaves the court to rummage around in the evidence to find the basis for the asserted application. It appears that the sole foundation of the mother’s application is that I have, in a number of applications, made orders which did not favour the mother.
The principles which govern such applications are well known and I need do no more that point to paragraph 6 in the joint judgment of Gleeson CJ, McHugh, Gummow and Hayne JJ in Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 in which it was said:
… the governing principle is that, subject to qualifications relating to waiver (which is not presently relevant) or necessity (which may be relevant to the second appeal), a judge is disqualified if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide.
I am comfortably satisfied that the fair-minded reasonable observer understanding the context of the applications decided by me would not apprehend that I would fail to bring an impartial mind to the issue to be determined in the present application.
I note that the mother also sought that a number of other judges who have previously been involved in her family court proceedings also recuse themselves from having any further involvement in the matter. This is clearly not an order I can make.
Thus, I refuse to recuse myself from further hearing this application.
Security for costs
The orders the father seeks are:
2. That … if the Mother is permitted to agitate the Notice of Appeal filed on 5 June 2017, the continuation of the proceedings is conditional on the basis that within seven (7) days of the making of these Orders, the Mother pay to the Father:
2.1 $5,000, being the amount due under the Orders made on 11 May 2017, including interest to be calculated in accordance with the prescribed rate of Interest under Rule 17.03 of the Family Law Rules 2004;
2.2 $2,052.04, being the amount due under the Orders made on 25 November 2015, including interest to be calculated in accordance with the prescribed rate of Interest under Rule 17.03 of the Family Law Rules 2004; and
2.3 A further sum of $10,000 as security for costs of and incidental to these proceedings.
3. Failing the Mother’s compliance with order 2 above within seven (7) days of the date of this Order, the Mother’s Notice of Appeal filed on 5 June 2017 be deemed to be abandoned.
4. …
5. That the Mother be restrained from filing any further Application(s) as against File Number EA 60/2017, without first obtaining leave from a Registrar of the Family Court of Australia.
6. That the Mother pay the Father’s costs of, and incidental to, this Application on an indemnity basis.
It seems that only so much of the application as related to the security for costs was pressed and, in any event, no submissions were directed to order 5
The principles governing an application for security for costs were set out by the Full Court in Sawer & Sawer [2007] FamCA 140 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 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.
…
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
(Luadaka v Luadaka (1998) FLC 92-830; Jones and Jones (2001) FLC 93-080; Adult Guardian and Mother's Parents and B and Child's Representative (2002) FLC 93-116.)
These factors are largely reflected in r 19.05(2) of the Family Law Rules 2004 (Cth) (“the Rules”). Relevant to this matter, r 19.05(2)(g) provides that the Court may have regard to any unpaid costs orders when determining the security for costs application.
Financial circumstances of the mother
While there is no evidence before the court from the mother on this point, the father says that she has no ability to meet a costs order and is not currently working. However, the father further deposes that, in accordance with property settlement orders, he paid $146,950.67 together with $6,231.35 in interest to the mother in mid-2016.
Subject then to any funds she might retain, the mother appears to be impecunious and has no apparent source of funds from which she could meet any costs order in the father’s favour in the appeal. It is thus equally likely that she could not find the means to meet any ordered security.
Notwithstanding the fact of the mother’s financial circumstances, there are other relevant matters which weigh heavily in favour of making such an order.
Prospects of success
In order to consider this aspect of the application, it is helpful to set out relevant parts of the primary judge’s reasons and the grounds of appeal.
Her Honour noted that the mother filed written submissions and an affidavit in response to the father’s oral submissions in support of making the costs order.
Her Honour observed that the mother asserted a denial of procedural fairness in that she had not been served by the father with an application for costs. After noting that a written application for costs is not required by the Rules, her Honour said that the mother had been served with the father’s submissions in response to her contravention application in which he sought an order that it be dismissed with costs. In any event, her Honour found that the mother was well aware from her reasons delivered on 22 July 2016 that the father sought costs of the failed contravention application and the basis on which costs were sought because her Honour, in those reasons, set out the father’s submissions on the issue.
Further, her Honour noted that while the mother asserted the father’s financial position was not as he said, she brought no admissible evidence which challenged it.
Finally, her Honour found that the mother’s contravention application was wholly unsuccessful. Thus, her Honour ordered the mother to pay the father’s costs.
In her Notice of Appeal filed on 5 June 2017 the mother asserts six grounds of appeal. Four of the grounds relate to the contravention proceedings which were dismissed on 22 July 2016. There being no appeal in relation to those proceedings, these challenges are therefore incompetent as they do not touch on the appeal against the making of the costs order.
Ground 5 contends that the primary judge erred in making orders that the mother file submissions as to the costs of the contravention hearing in circumstances in which the mother had not been present at the substantive hearing, and when her counsel was overseas.
Ground 6 contends that the father misled the court through the contents of his affidavit (presumably, his affidavit filed in support of his submissions as to his costs of the contravention hearing) and that her Honour erred in law because the contravention application was “not wholly unsuccessful”.
A brief consideration of the grounds for the purposes of this application reveals the following:
·the grounds that are related to the contravention hearing itself do not raise any competent challenge to her Honour’s costs order;
·it could not be rationally argued that the mother’s application for contravention was not wholly unsuccessful, she having asserted contraventions and, where, despite her unannounced departure from the court, the primary judge continued the proceedings and considered the allegations and dismissed them; and
·the ground that contends error because the mother was not in court when the oral application was made does not raise any competent challenge to her Honour’s order in circumstances where she filed submissions and an affidavit in response to the application.
In my view, the appeal is highly likely to fail.
Outstanding costs orders
Aside from the costs order that the mother appeals from, the father points to three costs orders made in his favour in the proceedings, namely:
·A costs order for the sum of $2,052.04 made on 25 November 2015;
·A costs order in the appeal EA 183 of 2015 made on 27 February 2017;
·A costs order in respect of the appeals EA 68 of 2017 and EA 69 of 2017 made on 12 July 2017.
Two of these orders are still undergoing the assessment process. The father says that there is little prospect that the mother will pay the costs already ordered.
Whether an order would stifle the litigation
There is little doubt that to make an order for security for costs in relation to this appeal would probably bring the appeal to an end due to the mother’s impecuniosity. However, this does not mean that the father’s application for security must be rejected. Rather, the entirety of the circumstances must be considered and I bear in mind the mother’s right to access to the court processes.
In this case, it is to be recalled that the appeal itself challenges a costs order made against the mother resulting from an unsuccessful contravention application. As I have indicated, that appeal raises no matter of principle and the grounds are, in my view, unlikely to succeed. The mother is presently indebted to the father in relation to costs orders that she, it seems clear, is unable to pay. There is little prospect that any costs ordered by the Full Court would be met by her, leaving the father to bear his costs of successfully resisting what I regard to be an unmeritorious appeal (see Lawrence & Tan [2012] FamCAFC 62).
Conclusion
I pause to note that it is unusual for an applicant for security for costs not to have solicitors on the record in the proceedings, but in this case the father appeared unrepresented on the application, and currently has no solicitors on record in the appeal. It is clear from his affidavit however, that the father has regularly engaged Watts McCray Lawyers to act for him in the proceedings between the parties at such times as he can afford it. Indeed in his affidavit in support of his application the father states:
28. I have and am continuing to incur significant legal costs in relation to each Application that is commenced by [the mother]. This has meant that at times, my solicitors have had to come off the record. …
In all of the circumstances of this matter, I am satisfied that the mother should be ordered to give security for costs of the appeal. However, the order will be conditional on the father being represented by a solicitor and that solicitor filing a Notice of Address for Service in the appeal and undertaking in writing to hold the security on trust pending further order of the Full Court.
While the balance of the father’s application seeks extensive orders which require the mother to meet the already ordered costs as part of the security for costs, they were not pressed on the application and, in any event, I do not consider it necessary or appropriate to order the payment of those costs. There are other procedures open to the father to enforce the earlier costs orders if that becomes necessary. I propose rather to order that the mother lodge $10,000 as security against the father’s costs of and incidental to appeal EA 60 of 2017 and that the appeal be stayed until the mother has complied with that order.
The father also sought the costs of his application for security for costs. That application will be reserved to the hearing of the appeal.
I certify that the preceding fifty-one (51) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Ainslie-Wallace delivered on
13 October 2017.
Associate:
Date: 13 October 2017
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