Rilak & Tsocas (No 4)

[2018] FamCA 659

FAMILY COURT OF AUSTRALIA

RILAK & TSOCAS (NO. 4) [2018] FamCA 659

FAMILY LAW – COSTS – where quantum of costs previously reserved – costs ordered in fixed sum – SECURITY FOR COSTS – where applicant wholly unsuccessful in multiple contravention applications – where security for costs likely to stifle litigation – where respondent acting with bona fides – where applicant’s prospects of success regarding further contravention applications poor – where security for costs ordered.

Family Law Act 1975 (Cth) s 117.

Kohan & Kohan (1993) FLC 92-340
Laukdaka & Luakdaka (1998) 24 Fam LR 340

APPLICANT: Ms Rilak

RESPONDENT: Mr Tsocas

FILE NUMBER: SYC 2062 of 2010

DATE DELIVERED: 29 August 2018

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Gill J

HEARING DATE: 27 August 2018

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Self-representing

SOLICITOR FOR THE RESPONDENT: Self-representing

It is Ordered

1. The Wife pay to the Husband costs in the fixed sum of $4,945.18, within a period of 28 days from the making of these Orders.

2. That the proceedings as they relate to the Wife’s Application for Contravention, dated 15 November 2017, are stayed pending payment by the wife into the trust account of a firm of solicitors nominated in writing by the husband, of the sum of $5,000.00, such sum to be held as security for costs and not to be released without further order of the Court.

3. The parties are at liberty to relist the matter for directions:

   (a)       On the lodgement of the security; or

   (b)       If no security has been lodged within six months of the order.

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. 4) 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).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 2062 of 2010

Ms Rilak

Applicant

And

Mr Tsocas

Respondent

REASONS FOR JUDGMENT

In the matter of quantum of costs and security for costs

1. On 18 May 2018 orders were made for costs against the applicant regarding three counts of her Application for Contravention of 15 November 2017.  That order for costs was made following an application where there was non-compliance by the applicant with procedural orders, where the applicant was wholly unsuccessful in respect of the three counts, and the order was made despite the applicant being impecunious.  Quantum was reserved and the parties were permitted to file further material, and they have done so. 

2. The parties were also permitted to file written submissions.  At that stage it was to be resolved without further oral hearing and I deliver my reasons in respect of quantum today.

3. Regarding quantum, it is to be noted that the precursor to the contravention hearing was an order made by Justice Loughnan which directed the applicant to identify three out of the 400 plus contraventions contained in that Application for Contravention. 

4. The applicant did not do so, instead identifying hundreds of counts and hence the respondent had to prepare an at large response, even if not prepare for the whole 400 plus counts. 

5. The applicant then filed later material in a further affidavit in the days leading up to the hearing, meaning that the respondent was confronted with two voluminous affidavits. 

6. At the commencement of the hearing, the applicant was directed by me to nominate three contraventions in accordance with the previous directions made by Justice Loughnan.  She did so at the commencement of the hearing and failed in her prosecution of each of those contraventions. 

7. The respondent alleges that his costs in dealing with the Application for Contravention on that day were $12,115.38 pursuant to a costs agreement.  He has annexed material to establish that amount.  He seeks the whole amount to be paid. That is, he seeks indemnity costs.

8. Indemnity costs require exceptional circumstances, see the case of Kohan & Kohan (1993) FLC 92-340. That is, it is a very great departure to move from party/party costs to indemnity costs.

9. The significant aspect of this case, which potentially could have led to such an order, was the non-compliance with Justice Loughnan’s orders for the identification of three counts.  However, this matter is sufficiently dealt with in an order for party/party costs where that order encompasses the breadth of preparation necessary to respond caused by the failure of the applicant to comply with that particular direction. 

10. Accordingly, the circumstances here are not sufficient to justify an order for indemnity costs.  In the alternative, the respondent seeks costs at a scale amount as set out in his affidavit at $6,511.56. 

11. The applicant filed affidavit material in response to the respondent's affidavit material to justify his costs award.  The applicant's affidavit material cited her version of the general history of the proceedings, including criticisms of the father and the proceedings themselves.  Little of her affidavit material was directed to the issues relating to costs.  However, some of it was.  She did, for example, address the itemised account which was part of the respondent's affidavit and criticised a number of entries in that itemised list as not being necessary in order to run the proceedings.  One basis on which she criticised was to query whether the costs were related to this particular application or one of the other applications that she has made against the respondent.  However, she has raised no sufficient reason or evidence to displace the husband's evidence that the items identified were in relation to these proceedings. 

12. She also noted that for a period of time the solicitors, in respect of who the husband incurred costs, were not on the record.  The solicitors not being on the record is not the same as them not undertaking work related to the litigation. 

13. Of the remaining matter complained of by the respondent which might be relevant to the question of quantum, she challenged items 10, 13, 14 and 16 of the itemised list in the respondent's affidavit.  Those items related to preparation of an affidavit for the respondent.  She noted, correctly, that no affidavit was filed.  Under those circumstances I am not satisfied that the preparation of the affidavit was properly a party/party cost necessarily incurred in preparation for the trial, particularly in the absence of an explanation as to why it was necessary when it was not filed.  The onus is on the respondent to establish that the items are necessary and under those circumstances I do not consider that the preparation of the affidavit was necessary.

14. Given the itemised nature of the respondent's list of asserted costs, that reduces the scale amount by a total of $1,566.38, leading to a new total of $4,945.18.  I make an order for costs in that fixed sum.

Oral application for dismissal

1. The further matter that was dealt with was five additional counts from the Application for Contravention of 15 November 2017.  Each of those counts was dismissed.  Following their dismissal the respondent made an oral application to dismiss the balance of that Application for Contravention.

2. There is no basis on which I am able to do so on the basis that the balance of the matters have not been heard in any sense.  I decline the application to dismiss the balance of that application. 

Oral application for security for costs

1. A further oral application was made by the respondent, which was for security for costs regarding the prosecution of further of the contraventions alleged in the Application for Contravention of 15 November 2017.  That Application for Contravention occurs against the background recited by the respondent. 

2. First, there is a litany of unsuccessful applications to this Court at first instance to the Full Court and to the High Court by the applicant.  These have been accompanied by various non-attendances and discontinuances. 

3. It also occurs in the context of the applicant not having paid a Full Court costs order following dismissal of her appeal of 31 October 2017 in the sum of $16,700. 

4. The application is also made against a background of a previous application for security for costs which was refused on 18 May 2018.  That application for security for costs came in the context of the applicant being unsuccessful in relation to the three counts she chose to prosecute at that point.

5. On that occasion I set out the law, including the applicability of s117(2A) and Justice Ainsley-Wallace's recitation of further considerations as she had set out in previous litigation between these two parties.  On that occasion I accepted that the applicant was impecunious.  I also accepted that given her unpaid previous costs orders, including the security for costs order, a further security for costs order would be likely to stifle her litigation.  That would be litigation stifled in a matter of importance, because it was litigation regarding the enforcement of parenting orders.  That declining to make an order for security for costs was in a context where the lack of success in the three counts prosecuted on that day did not speak sufficiently to the prospects of success of the applicant regarding the balance of the 400 plus counts that she seeks to prosecute against the respondent. 

6. In that context I permitted her to select five contraventions for hearing on 27 August 2018.  I noted that in selecting those the results could be used to inform the question of prospects regarding the remainder of the 400 plus counts more generally.

7. The applicant failed in relation to each of those five contraventions, one because it was not the subject of the Application for Contravention, three because she was unsuccessful at a prima facie case level and the remaining one because although the she met the prima facie threshold, the evidence was insufficient to establish the contravention on the balance of probabilities, and was accordingly dismissed without calling upon the respondent to indicate whether he would or would not give evidence on that matter. 

8. That is, again the applicant was wholly unsuccessful, but this time in a context where she was on notice that the results may be used to inform the more general prospects question relating to the remaining 400 plus counts.

9. Turning then to the question of the application for security for costs, and considering the additional factors identified by Justice Ainslie-Wallace and also in the case of Laudaka & Luadaka (1998) 24 Fam LR 340, as they speak to s 117(2A)(g), being “such other matters as the Court considers relevant”, and noting in doing so that those considerations are not a codification of what is relevant. I note as follows:

   a)On the question of prospects of the further contraventions being successful, they may now be seen as being very poor;

   b)On the question of bona fides on the part of the respondent in applying for security for costs I note that there are outstanding costs awards unpaid.  I note that the prospects are poor and I assessed his bona fides in making the application for security as being present.  

   c)I note that an order for security for costs is likely to stifle further litigation, particular given the unpaid previous costs awards and as far as I know, the lack of payment of the security for costs award that has previously been imposed;

   d)On the question of whether this is a matter of public importance I accept that it is, in so far as enforcement of child-related proceedings are a matter of public importance. 

   e)I note that there has been no delay in the bringing of the application by the respondent. 

   f)I note that it would be extremely difficult for the respondent to enforce his costs awards given the outstanding costs awards that have been unpaid.  It would be highly problematic for him to pursue those. 

10. The major difference since the refusal of the previous application is my assessment of the remaining prospects.  That tips the matter in favour of an order to be made for security for costs, despite the effect of stifling the litigation. 

11. A question arises as to the terms of that order. 

12. I accept that the current order for the most recent failure of the application to deal with the contravention is indicative of an appropriate quantum in an approximate sense, even though I note that the respondent's preparation there was for further counts given the non-compliance by the applicant with Justice Loughnan’s orders.  It does, however, approximate an appropriate quantum to be lodged before the matter can be prosecuted further, that is, it points to an order for lodgement of $5,000 as being appropriate. 

13. I have not been addressed by the parties on the effect of failure to lodge in the long term, that is, whether it should permit an application for dismissal for the failure to prosecute. 

14. I will give the parties an opportunity to address that issue after the expiration of six months if the security is not lodged. 

I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Gill delivered on 29 August 2018.

Associate: 

Date:  29 August 2018