Sansome and Sansome
[2008] FamCA 33
•23 January 2008
FAMILY COURT OF AUSTRALIA
| SAUNDERS & SAUNDERS | [2008] FamCA 33 |
| FAMILY LAW – COSTS – Security for costs |
| Family Law Act 1975 (Cth) |
| Rodgers and Pisani [2007] FamCA 1510 Jones and Jones (2001) FLC ¶93-080 Luadaka v Luadaka (1998) FLC ¶92-830 |
| APPLICANT: | Mrs Saunders |
| RESPONDENT: | Mr Saunders |
| FILE NUMBER: | NCC | 2217 | of | 2007 |
| DATE DELIVERED: | 23 January 2008 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Newcastle |
| JUDGMENT OF: | Justice Fowler |
| HEARING DATE: | 18 January 2008 |
REPRESENTATION
| SOLICITOR FOR THE APPLICANT: | Mr D. Nash |
| COUNSEL FOR THE RESPONDENT: | Mr W. Tregilgas |
Orders
The wife’s Application in a Case filed 11 October 2007 is dismissed.
The wife is to pay the husband’s costs of and incidental to the application before the court as assessed or taxed. The wife is to have election to offset that amount against up to so much of the costs outstanding to her from the husband pursuant to the orders of the Court previously made AND THE COURT NOTED this will mean that her obligation to pay is discharged to the extent of the offset.
IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Honourable Justice Fowler delivered this day will for all publication and reporting purposes be referred to as Saunders & Saunders.
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: NCC 2217 of 2007
| Mrs Saunders |
Applicant
And
| Mr Saunders |
Respondent
REASONS FOR JUDGMENT
Introduction
In this matter there is before the court an application by the wife in which she seeks orders for the provision of security for her costs in the following circumstances.
The parties to the proceedings were married in 1992 and the parties were divorced in March 2003.
Of the marriage there are two children, a son born in September 1994 and a daughter born in April 1999.
The children reside with their mother and spend time with their father under the supervision of Relationships Australia pursuant to an order of the Court made in 2004. (the contact order)
Such was the nature of the history and facts of this matter that an order was made at that time prohibiting the husband from commencing any proceedings in this court without leave. That order was made pursuant to the provisions of section 118.
On 2 July 2007 leave was granted to the husband to bring an application in which he sought a variation of the present contact order. That leave was granted by order of Her Honour Justice Ryan on 16 July 2007. In so doing Her Honour must have pursuant to the requirements of rule 11.05(4) been satisfied that the case has a reasonable likelihood of success.
It appears that the children have spent time with their father pursuant to the contact order.
A letter has been procured from Relationships Australia whose employees have supervised the contact recommending a variation of it. The contact order provided in Order 10:
If the Contact Centre during the currency of these orders declines or is unable to continue to provide its services, or the Director of the Contact Centre recommends in writing to the parties a variation of these orders, then either party or the Child’s Representative may on 7 days written notice to the other party and the Court restore the matter to the list.
I am urged by the wife to find the husband’s case without merit and to take into account findings made by His Honour Justice Mullane in the determination of the primary issue in 2004 (now some time ago). I have read the paragraphs referred to which show reprehensible conduct and lack of insight amongst other deficiencies of the husband.
I do not think however that I can go behind the determination of Her Honour Justice Ryan which is a result of a consideration under rule 11.05(4). If I were wrong in that belief and obliged on the current evidence make a determination of that issue I would respectfully agree with Her Honour that the husband’s case is not on its face without some reasonable prospects of success.
There has been extensive litigation between these parties and a number of orders have been made against the husband requiring him to pay to the wife amounts which remain unsatisfied. The wife deposes that the total amount owing to her by the husband is $80,752. That sum is made up of unpaid costs orders in the sum of $2,200.00, $2,035.00, $40,000.00, and $1,188.00 owing from as early as 2003 and unpaid property settlement and interest thereon in the sum of $5,830.72 (as at October 2007). There is an amount she says owing for child support in the sum of $19,498.63.
No application has been brought by the wife to enforce the court’s orders. She through her counsel concedes that was a business decision on the basis of the likely result being unproductive because of the financial position of the husband.
Given the history of non payment, and the wife would say the merits of the case, the wife now seeks an order that the husband be restrained from continuing these proceedings until she is provided with security for her costs.
The husband’s financial position set out in a financial statement filed in December 2007 is that he has an excess of liabilities over assets and a very modest income. He certainly does not demonstrate any capacity to pay the amount sought as security for the costs sought or indeed any.
In any event the wife concedes that were her application to be granted the husband, at least on his current disclosed financial position, would not be able to provide security for that amount.
Relevant Law
The Law in relation to the provision of security for costs is that there is a wide discretion in the Court to order such security. The statutory basis for that discretion is to be found in section 117. That section provides in
sub section (2) inter alia that if the Court is of the opinion that there are circumstances which justify it in doing so … may make such order … as to security for costs … whether by way of interlocutory order or otherwise … as the Court considers just. The discretion reposed in the court is broad indeed but the Court is directed to consider the matters referred to in sub-section 2.
Section 117(2) considerations
The financial circumstances of each of the parties to the proceedings
In this matter the financial circumstances of the husband are as set out above and appear to be generally conceded by the wife. The wife’s financial circumstances are as set out in the wife’s statement of financial affairs filed in November 2007. That statement shows Assets of $658,017.89 and liabilities of $104,000.00. Her income is three times that of the husband and she has superannuation of some $81,370. She is on all points in a significantly superior financial position to the husband.
Whether either party is in receipt of legal aid
Neither party is in receipt of legal aid although the husband discloses some “assistance” from a friend with his current legal costs. In that regard the court has scant information as to the source and amount of funding available but there is no evidence that that source would provide funds for the purpose of meeting the husband’s outstanding financial obligations or to provide security for the wife’s costs.
The conduct of the parties to the proceedings
In this regard I was invited by the wife’s solicitor to take into account matters of conduct in prior proceedings in this matter. I believe that this sub section can only go to conduct in relation to the proceedings in relation to which the order for security for costs or an order for costs is sought. I find nothing in the conduct of the husband in these current proceedings which assists the wife’s argument.
Whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court
The wife certainly relied on a liability (enforcement of which has according to counsel never been undertaken or attempted) created by previous orders of the Court and not complied with. I take that into account in this way and have every sympathy with the wife’s frustration at the history of non compliance but for reasons set out below do not consider it to be determinative in the circumstances of the case before me.
Whether any party has been wholly unsuccessful in the proceedings
This is a relevant consideration in relation to the order I propose to make for the costs of the application before me.
Whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of that offer
There is no evidence of an offer in writing to settle the proceedings.
Any other relevant matter
In this regard I note that a proposal was made to deal with the issues the subject of the husband’s application for variation by way of mediation but the wife declined to consider the proposal until the husband met his outstanding obligations. A prior mediation had been attempted and failed I am informed.
Matters which the Court may take into account under Rule 19.2
The provisions of rule 19.2 make it permissive for the Court to consider the following matters.
The financial means of the applicant
In this case the applicant’s means are as indicated above superior to those of the respondent.
The prospects of success or merits of the application
I believe that I am bound by the decision of Justice Ryan on this issue and that the parties are likewise bound by it. If I am wrong in relation to that I nevertheless on the presently available material find that prima facie there is a prospect of success in the application.
The genuineness of the application
I have doubts as to the genuineness of the wife’s application for security for costs. The wife’s said through her solicitor that she accepted the reality that an order for security would have the effect of stifling the litigation. She had previously determined that there was no practical point in pursuing the costs outstanding to her. She strongly advocated the retention of the status quo in relation to the children. Her application for security was in my view at least primarily for the purpose of stopping the litigation in circumstances where the husband had been granted leave to commence the proceedings. I also believe that the husband’s application was genuine and it is clear that he did not undertake this litigation as a first alternative. He and the wife sought to resolve the matter by mediation but regrettably that failed to achieve agreement. He made a subsequent approach seeking mediation but that was rebuffed peremptorily with a suggestion that it might be considered after the husband attended to his outstanding financial obligations.
Whether the applicant’s lack of financial means was caused by the respondent’s conduct
I have already made findings on means. I do not consider that the wife would be unable to litigate this matter absent an order for security for costs. The issue does not then arise.
Whether an order for costs would be oppressive or would stifle the case
I believe that such an order as is sought would have the effect of terminating the case, a position conceded by the wife through her solicitor.
Whether the case involves a matter of public importance
I believe that any proceedings in which ways are sought to promote the welfare of children are always matters of public importance. I do not believe there is a matter of public importance in the sense that there is some novel or new issue or principle of law to be determined which is a landmark issue of public interest.
Whether a party has a costs order … which remains unpaid
There clearly are as are referred to above.
Whether the applicant ordinarily resides outside Australia
This is not a relevant consideration in this case.
The likely costs of the case
There is no evidence on this issue but I imagine they would be in the thousands.
Whether the applicant is a corporation
This is not a relevant consideration.
Whether a party is receiving legal aid
This is not a relevant consideration in this case.
It is urged on me by the applicant’s solicitor that I should apply the general rule that an applicant before the court should not be permitted to proceed whilst he or she is in contempt of orders of the Court. I refer to section 69F of the Act and reject that submission.
The Cases
I refer to the decision of the Full Court in the matter of Rodgers and Pisani [2007] FamCA 1510. Judgment was delivered on 20 December 2007. In that case the majority referred to the case of Jones and Jones (2001) FLC ¶93-080 and Luadaka v Luadaka (1998) FLC ¶92-830 and others which add the following matters into the consideration of the court which it quoted with approval as follows:
Whether or not there has been a delay in bringing the application for security
In this regard I am urged by the husband’s counsel to find such delay but reject that submission on the facts which do not bespeak of undue delay.
Whether there would be difficulty in enforcing an order for costs
Clearly on the evidence before the court as to the husband’s means and the history of this matter there is every probability of difficulty with such enforcement if an order for costs were made.
Jones and Jones is authority for the principle that mere impecuniosity of a litigant who is a natural person will not of itself be a basis for ordering that person to provide security except in the case of appeals.
Were the husband seeking in these proceedings orders for his own financial benefit I would have less hesitation in making an order for security for costs but in a sense the current proceedings are primarily not about the interests of the parties but the rights of their children.
Those rights are the subject of clear legislative policy expressed in the provisions of Part VII of the Act and I particularly refer to section 60B of the Act and the provisions of sub paragraph (a) of that section and sub paragraph (d). I also refer to the provisions of section 60B(2) and section 60CA and following and Section 61B and following.
The Parliament has given clear expression in the Act to the obligations of parents to act in the best interest of the children and for this court in considering matters relating to children to do likewise.
Given the child centric nature of the considerations which the Court must apply it seems to me to be clear legislative policy that this court has to primarily exercise its jurisdiction in the interests of the children of the parties.
It cannot be, given those expressions of public policy that this court should be deprived of the opportunity of serving the interests of the children in this case where a genuine application in pursuit of a result thought to promote their welfare is undertaken and in my view those statements of policy and paramountcy are infused into the considerations before the Court in the determination of this matter and in my view are to be given determinative weight.
The policy statements in the Act about the rights of children to have a relationship with each parent make it clear that it is a consideration of their interests not those of the parents which predominates. It is of course the case that each of these parents has a responsibility to promote the welfare of their children. If they cannot agree and the dispute remains unresolved that situation cannot operate either to their benefit nor that of the children.
I therefore have concern that the children might be denied the opportunity to have made those orders which may advance their welfare because of the impecuniousness of the husband if the orders sought by the wife are granted.
I do not think that the husband’s non compliance with costs orders discharges the responsibility of each of the parties to examine the arrangements for their children and to come an arrangement which best promotes their welfare. If they cannot do that by agreement then the Court must undertake that task and the children should not be denied the benefit of that process not the parents the assistance of the Court in fulfilling their obligations to their children.
It was urged upon me that if I felt that there was no basis for finding that the application for variation of the contact order was without merit I should adjourn the proceedings in order to permit of the preparation of further reports on the children so that the wife might be afforded the opportunity of seeking some evidentiary support for her view that the husband’s application lacks merit. I decline to do so. It is time for an end to this application. Should evidence support further applications at other times then that is a matter on which the wife can take advice.
I have come to the conclusion for the reasons herein expressed that the application should be refused.
I am asked in that event to make an order for costs. I believe having regard to the matters referred to in section 117 of the Act and otherwise the matters adumbrated above it is appropriate for there to be an order for costs. I therefore order that the wife pay the husband’s costs of and incidental to the application before the court as assessed or taxed. I order however that the wife have an election to offset that amount against up to so much of the costs outstanding to her from the husband pursuant to the orders of the Court previously made and referred to above. This will mean that her obligation to pay costs will be discharged to the extent of the offset.
I certify that the preceding fifty-one (51) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Fowler.
Associate:
Date: 23 January 2008
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