SCVG and KLD (No 4)
[2018] FamCA 593
•8 August 2018
FAMILY COURT OF AUSTRALIA
| SCVG & KLD (NO 4) | [2018] FamCA 593 |
| FAMILY LAW – Application for security for costs – application for security for sums not related to costs in the present matter but related to other outstanding costs orders and child support debt – application for stay pending compliance with outstanding costs and child support orders - capacity of the Court to prevent its processes being used as an abuse of process – desirability of applicant for a stay on the grounds of abuse of process to precisely identify the nature of the abuse of process rather than simply the facts said to constitute the abuse of process - application for transfer of the matter to another judicial officer. |
| Family Law Act 1975 (Cth) s 117(2) Family Law Rules 2004 (Cth) r 19.05 Uniform Civil Procedure Rules 2005 |
| Atkins & Hunt [2015] FamCAFC 66 Hearne & Hearne [2015] FamCAFC 178 Norton & Locke [2013] FamCAFC 202 Williams v Spautz (1992) 174 CLR 509 |
| APPLICANT: | Mr SCVG |
| RESPONDENT: | Ms KLD |
| FILE NUMBER: | SYC | 4380 | of | 2008 |
| DATE DELIVERED: | 8 August 2018 |
| PLACE DELIVERED: | Canberra |
| PLACE HEARD: | Canberra |
| JUDGMENT OF: | Gill J |
| HEARING DATE: | 30 July 2018 |
REPRESENTATION
| SOLICITOR FOR THE APPLICANT: | Self-representing |
| COUNSEL FOR THE RESPONDENT: | Mr Stenhouse |
| SOLICITOR FOR THE RESPONDENT: | Macphillamy’s |
Orders
Within 60 days the Applicant pay to the Respondent’s solicitor’s trust account the sum of $45,000 as security for the costs of the Respondent in these proceedings, such amount only to be removed from the trust account by written agreement of the parties or further order of the Court.
The application to set aside the orders of Justice Cronin of 20 August 2015 is stayed pending compliance with Order 1 above.
Any indulgence previously obtained by the parties regarding the mode of filing documents is revoked.
In the event that a party seeks to depart from the Rules, then that party will be required to file an application seeking such departure.
The Respondent’s amended application in a case filed 8 June 2018 is otherwise dismissed.
The matter is otherwise adjourned to 11am on 12 December 2018 for directions or in the event that parties file in accordance with the below timetable the dealing with any further applications.
In the event that a party seeks to have an application heard on 12 December 2018 that party is to file and serve such application and supporting material by close of business on 21 November 2018.
In the event that a party opposes such application or seeks alternate orders then that party is to file and serve any response and supporting evidence by close of business on 5 December 2018.
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 SCVG & KLD 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 CANBERRA |
FILE NUMBER: SYC 4380 of 2008
| Mr SCVG |
Applicant
And
| Ms KLD |
Respondent
REASONS FOR JUDGMENT
Background
This matter has come before the court to deal with Ms KLD’s Application in a Case filed on 11 May 2018 and amended on 8 June 2018. The Application in a Case seeks procedural and other orders related to Mr SCVG’s application to set aside the costs order mode by Cronin J on 20 August 2015 on the basis of fraud. The application covered issues relating to the identity of the relief sought, particularisation of the claim, compliance with the requirements of the Family Law Rules 2004 (“the Rules”), a stay of proceedings, an application for security for costs, an application for costs and an application to transfer the proceedings to Cronin J. Not all of the matters sought in the application were pressed at hearing. Not all of the matters pressed were opposed by Mr SCVG.
Amended application
Ms KLD had sought that Mr SCVG file an Amended Application in a Case identifying the relief he seeks. On the basis that his Amended Application in a Case filed on 27 July 2018 sets out that the relief he seeks is the setting aside of the orders of Cronin J, this order became unnecessary.
Particulars
Ms KLD sought that Mr SCVG file and serve:
a document particularising the claims made against respondent and the legal and equitable basis on which those claims are made in the form of a statement of claim in the Supreme Court of New South Wales.
Mr SCVG did not oppose the making of this order, but asserted that the documents attached to his Amended Application in a Case filed 27 July 2018 fulfilled his obligations in respect of the order. Whether they were so compliant was not a matter determined or argued.
Single affidavit in support
While Ms KLD had sought that Mr SCVG file and serve a single affidavit setting out the factual basis for the relief he seeks, this order was not pressed in the context of her previously seeking and obtaining orders on 15 February 2018 that prohibited the filing of further affidavit material in support of Mr SCVG’s application in respect of the orders of Cronin J.
Compliance with the Family Law Rules
Ms KLD sought orders regarding strict compliance with the Rules. Ms KLD and Mr SCVG agreed (in lieu of orders 3 and 4 sought by Ms KLD) to an order being made in the following general terms:
Any indulgence previously obtained by the parties regarding the mode of filing documents is revoked.
In the event that a party seeks to depart from the Rules, then that party will be required to file an application seeking such departure.
Given the criticism made in the proceedings by Ms KLD as to the chaotic filing of material by Mr SCVG it was appropriate that this order be made.
Stay or security for costs
Ms KLD sought orders for the stay of Mr SCVG’s application in respect of Cronin J’s order, pending his payment of outstanding costs orders and child support. In the alternative, she sought an order for security for costs in a sum equivalent to the outstanding costs orders and child support, along with an additional sum of $45,000 in respect of the current proceedings. These orders were opposed by Mr SCVG.
The underlying facts called in support of these applications relate to Mr SCVG having failed to pay the below outstanding costs orders and child support. That is, the failure to pay the outstanding amounts is put forward as the justification for either a stay of proceedings or, in the alternative, the requirement that security for costs be lodged before Mr SCVG is permitted to proceed further with the application in respect of the setting aside of the orders of Justice Cronin.
Ms KLD stated that the following costs orders remained outstanding:
a)$19,670 from 9 October 2014 in proceedings EA107/2013;
b)$7,300 from 15 May 2017 in proceedings EAA107/2013;
c)$5,500 from 15 May 2017 in proceedings EAA174/2015;
d)$7,837 from 25 July 2017 in proceedings EAA107/2013 and EAA174/2015;
e)$68,747.63 from 27 July 2017 in proceedings SYC4380/2008; and
f)$29,943.38 from 14 September 2017 in proceedings SYC4380/2008.
These costs total $138,998.01.
Additionally Ms KLD asserted that Mr SCVG has an outstanding child support liability of $67,269.
Mr SCVG led no evidence to contradict the assertion that these amounts are outstanding. He asserted that each of the costs orders set out above is the subject of some form of legal challenge.
Ms KLD accepted that Mr SCVG was contesting all costs orders, but for the $19,670 from 9 October 2014 in proceedings EA107/2013.
Mr SCVG previously applied to have the costs orders in the amounts of $7,300, $5,500, $7,837 and $68,747.63 reviewed. Those applications were heard on 14 September 2017, where Mr SCVG failed to appear. In consequence of being completely unsuccessful, further costs were awarded against Mr SCVG in the amount of $29,943.38 for the court event on 14 September 2017. Mr SCVG’s applications of 16 October 2017 and 27 October 2017 both challenge the orders made on 14 September 2017 dismissing the reviews and ordering further costs. In this way, Mr SCVG contests the costs orders in the amounts of $7,300, $5,500, $7,837, $68,747.63 and $29,943.38.
Additionally, Mr SCVG also contests the sum of $68,747.63 by way of his application filed 24 January 2018, as amended on 26 July 2018. I am unable to ascertain whether Mr SCVG is challenging the $19,670 matter. For the purposes of the application it is perhaps best to assume that all outstanding matters are the subject of some sort of challenge. However, nothing was led to suggest that the outstanding matters are the subject to any stay in their operation.
Having been advised that the only evidence available was that in the affidavit material relied upon (comprising in his case his affidavits filed 8 and 17 January, 8 February 2018 and 27 July 2018, and in Ms KLD’s case her affidavits filed on 16 January 2018, 11 May 2018 and 8 June 2018) he sought to advise from the Bar table that the child support amount had altered. In the absence of evidence or concession, this is a matter that cannot be taken into account.
Ms KLD accepted that a stay pending compliance with the costs and child support orders appears to be novel in this jurisdiction. While she asserted that they are a feature of the Uniform Civil Procedure Rules2005 there is no equivalent in the Rules, nor an example able to be identified from case law. Rather, the power was said to derive from the Court’s jurisdiction to control its own processes to ensure that there is not an abuse of process.
That the Court has the “power to control its own process and prevent the abuse of same” is supported, as contended by counsel for Ms KLD, by Norton & Locke [2013] FamCAFC 202.
Counsel for Ms KLD also relied upon Hearne & Hearne [2015] FamCAFC 178 which supports the capacity of the Court to prevent its processes being used as an abuse of process. There Austin J said:
This Court has power to make orders that prevent an abuse of its process and protect its own functions (see Williams v Spautz (1992) 174 CLR 509 at 518). What amounts to an abuse of court process is insusceptible of a formulation comprising closed categories (see Batistatos v Roads & Traffic Authority (NSW) (2006) 226 CLR 256 at 265), however, one established category is where the use of the court’s procedures would bring the administration of justice into disrepute (see Batistatos at 267; Rogers v The Queen (1994) 181 CLR 251 at 286). The abuse of the court’s process may be apparent, not just from the institution or prosecution of the proceedings, but from procedural steps taken in the litigation, in which case the power to deal with the procedural abuse extends to the exclusion of the particular vexatious issue from the litigation (see Batistatos at 267).
The precise character of the abuse of process in this instance was not identified. Recourse to phrases such as “abuse of process” or bringing the “administration of justice into disrepute” are of little assistance absent identification of how the particular facts of the case constitute such.
In aid of the contention that the proceedings flowing from the Cronin J orders are an abuse of process on the part of Mr SCVG, Ms KLD relied upon two factors. The first was a recital of the litigation history. This second was the non-payment of the various orders set out above.
As to the litigation history, Ms KLD points to the fact that Mr SCVG largely appears as a self-represented litigant. She describes his litigation is chaotic, in particular in terms of the material that he seeks to rely upon, the manner in which he files material and his use of submissions. She says that there are seven current matters before the family law courts where Mr SCVG has named her as a respondent. She has exhibited a list of reported decisions in relation to litigation commenced by Mr SCVG against her in family and other civil jurisdictions. That list does not include various interlocutory applications. It comprises 35 entries. I am not told of the degree of success or failure by Mr SCVG in those various proceedings.
As to the non-payment of various orders, the current application in relation to the orders of Cronin J relates to one of those unpaid orders. A number of the other unpaid orders are awaiting determination as identified above. None of those orders requiring payment were identified as the subject of a stay.
As noted by Austin J in Hearne, the categories of abuse of process are not closed. However, it is incumbent upon the party urging the Court to refrain from exercising its jurisdiction to substantively determine the matter and to establish the abuse of process. This may be done by establishing, as was dealt with in Williams v Spautz (1992) 174 CLR 509, that the proceedings are in truth being pursued “not to prosecute them to a conclusion but to use them as a means of obtaining some advantage for which they are not designed or some collateral advantage beyond what the law offers.”
The fact of the large volume of proceedings, and the identified outstanding orders for payment could be matters taken into account in determining whether proceedings should be characterised in the above manner. However, they do not, in the present case, go so far as to establish such a circumstance.
Nor do they answer an alternate category of abuse of process, being the exposure of a person to proceedings that must necessarily result in an unfair trial of the matter.
To the extent that it might be suggested that the circumstances render the current proceedings oppressive, or are an example of the court’s processes being lent to oppression and injustice,[1] it should be recalled that, even in a criminal context, the remedy of a stay is not granted where there are alternative means to render the trial fair. The corollary is that the complaint as to non-payment cannot bear weight in support of the claim for a stay where other remedies of enforcement are available. The refusal to exercise jurisdiction to substantively hear a matter is such a serious departure from the court’s obligation to hear and determine that such a remedy could only be given where that hearing and determination conflicts with the character of the Court.
[1]Williams v Spautz (1992) 174 CLR 509 at 520.
While the volume of litigation, and the fact of the unpaid monies are troubling matters, they do not rise to the level of demonstrating an abuse of process. The remedy of a stay pending payment should not be granted.
In the alternative, Ms KLD sought an order for security for costs. This application had a number of components. It is set out below:
8.That within 60 days the Applicant pay to the Respondent solicitors trust account the following amounts as Security for the Costs:
8.1.Any amount sought to be paid to the Respondent pursuant to Order 5, and not ordered to be paid under Order 5.
8.2.$45,000.00 for the Costs of the Respondent in these proceedings, or such other amount as the Court determines.
9.That the Application be stayed pending compliance with Order 8.
10.That strict compliance with Order 8 is required, and the matter may, upon application, be summarily dismissed if Order 8 is not strictly complied with.
It was again accepted for Ms KLD that an application to incorporate an amount for costs from other proceedings and outstanding child support as a part of a security amount lodged for costs is a novel application. I was referred to a number of authorities setting out the considerations for determining whether an order for security for costs ought to be made. It is convenient, given the overlap of the authorities, to refer to Atkins & Hunt [2015] FamCAFC 66 which says as follows:
[21] The power to make an order for security for costs is found in s 117 of the Family Law Act 1975 (Cth) ("the Act"). As was explained in Gerber & Bradley (formerly Gerber) and Ors (Security for Costs) [2011] FamCAFC 206, in addition to the matters referred to in the section, it is well settled that pursuant to s 117(2A)(g) the following matters should be considered:
othe prospects of success of the litigation (relevantly the wife's appeal);
owhether the claim for security is made bona fide;
owhether or not an order for security would stifle the litigation;
owhether or not the litigation may involve a matter of public importance;
owhether or not there has been a delay in bringing the application for security; and
owhether there would be difficulty in enforcing an order for costs.
(See also Palma & Caleffi and Anor (Security for Costs) [2011] FamCAFC 174; Luadaka & Luadaka (1998) FLC 92-830)
[22] These factors largely mirror the considerations referred to in r 19.05(2) of the Family Law Rules 2004 (Cth) ("the Rules").
Notably r 19.05 of the Rules provides that:
(2) in deciding whether to make an order, the court may consider any of the following matters:
…
(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;
Before turning to the considerations, it is important to examine the scope of the application made by Ms KLD. The application seeks more than just the lodgement of security for costs in relation to proceedings involving the application to set aside the orders of Cronin J. It extends to six previous costs awards and outstanding child support.
The power to make a security for costs order is contained in s 117(2) of the Family Law Act 1975 (Cth). It is a power which permits the court to “make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.” No part of that power enables its use for the enforcement of an outstanding child support obligation.
While arguably, as the balance of the outstanding payments relate to previous costs awards, the orders sought by Ms KLD could fall within the terms of s 117, significant caution is called for because of the terms of r 19.05 which governs applications for security for costs. Rule 19.05 provides as follows:
(1) A respondent may apply for an order that the applicant in the case give security for the respondent’s costs.
When seen in the context of r 19.05(2)(g), as set out above, the rule contemplates the security being in relation to the instant case, rather than as an enforcement mechanism for other previous costs orders.
Not only is the application in respect of lodging security for the outstanding costs and child support novel, to the extent that it deals with child support it is not authorised by s 117, and to the extent that it deals with previous costs awards is not authorised by r 19.05. The first aspect of the application should be refused.
Turning to the second aspect of the application, insofar as it deals with the current proceedings, it is necessary to examine the considerations are set out in Atkins & Hunt, along with r 19.05(2)(g).
a)Prospects – this involves the consideration of the prospects of Mr SCVG’s application to set aside the costs orders of Cronin J on the basis that they were procured by fraud. The approach taken in Atkins was to ask whether a conclusion could be drawn that, in that case, the grounds of appeal were unmeritorious. In that case the Court found that it could not be said “with any certainty that all the grounds will necessarily fail.” To the extent that Mr SCVG’s application relies upon an alleged misstatement by Ms KLD of her financial circumstances, without being able to say that he has good prospects of success, I cannot say that he will necessarily fail.
b)Whether the claim for security is made bona fide - by her application Ms KLD seeks $45,000 as security. This amount represents approximately half that which is estimated by her counsel of the remaining costs in respect of this application as set out in exhibit W2 - KLD 11. It does not include costs to date nor the costs of her solicitor. There is no matter which leads to a conclusion that application is otherwise than bona fide.
c)Would an order stifle the litigation? Mr SCVG’s material does not show this to be the case.
d)Does the litigation involve a matter of public importance? While in the proceedings the contest is between Ms KLD and Mr SCVG, they also involve the question as to whether or not the integrity of the decision made by Cronin J has been undermined by fraud. That is a matter of some public importance even if the results only touch the particular parties.
e)Whether or not there has been a delay in bringing the application - there has been significant delay in bringing the application as it was not brought until 11 May 2018, a point after the proceedings had gone so far as to deal with jurisdictional issues and to deal with what evidence will be heard within those proceedings. Mr SCVG made his application on 24 January 2018.
f)Whether there would be difficulty enforcing an order for costs - it is in relation to this matter that r 19.05(2)(g) becomes most significant. There are a number of outstanding costs awards which have not been the subject of a stay in relation to their enforcement. Almost all of them have been in place for greater than 12 months. They speak strongly to the notion that Ms KLD will have great difficulty in seeking to enforce an order for costs should she be successful.
The key contest from these factors, which all must be balanced, can be seen to be the question of delay in bringing the application and the difficulty that Ms KLD will have in enforcing any costs order. However, the delay must be seen in context. At the time that Mr SCVG made his application, being the earliest time that an application for security for costs could have been made, the bulk of the outstanding costs awards were less than 8 months old. It is the continued non-payment of those amounts which is significant in the application. In this case while the delay is undesirable, it is the delay that assists in demonstrating the difficulties that Ms KLD will face in seeking to enforce any costs award. In balancing the considerations it is that difficulty that tips the balance in favour of making the order for the security.
Given the nature of the security for costs order, and that reason, it is appropriate that order nine sought by Ms KLD be made. This protects her from the unnecessary incurring of costs which the security order is designed to give her protection for. However, summary dismissal on failure to comply with lodging security within 60 days is an extreme and, as yet, unjustified remedy. It will fall to be determined if there is non-compliance by Mr SCVG on the circumstances that are in place at that time.
Transfer to Cronin J
Ms KLD seeks the transfer of the application to set aside the orders of Cronin J of 20 August 2015 to Cronin J.
It is useful to examine the history of the proceedings. The application to set aside was taken as filed by Mr SCVG on 24 January 2018. By that stage the parties had argued whether there was jurisdiction for hearing the application. Having found that there was jurisdiction the matter was set down for hearing on 15 February 2018.
The matter ran for close to the whole day on 15 February 2018. On that day Ms KLD sought summary dismissal of Mr SCVG’s application. Mr SCVG was required to identify the basis on which he made his claim (counsel for Ms KLD having noted that the Family Court is not a court of pleading and that, accordingly, the basis of the putting of the case must flow from the affidavit material). The application for summary dismissal was refused.
Following this an application was made to set aside a subpoena. In dealing with that matter the parties’ material on the substantive hearing to set aside was identified. The objections were ruled upon, one being the subject of a reserved judgment delivered the following day. The balance of the argument in relation to the subpoena and the balance of the proceedings were then adjourned to 30 July 2018 for further hearing. Orders were made restricting the material for the balance of the proceedings, preventing the filing of further affidavit material in relation to the hearing without leave.
Prior to the matter coming back on for hearing, application was made in relation to procedural matters by Ms KLD on 11 May 2018. On the return of that application, the hearing date of 30 July 2018 was vacated in order to deal with the procedural matters. At that stage it was foreshadowed that an application to transfer the proceedings to Cronin J would be made. Directions were then made for the filing of the application. Although not filed in compliance with those directions, no objection was taken by Mr SCVG to Ms KLD pursuing that application on 30 July 2018 by virtue of her Amended Application in a Case filed 8 June 2018.
In support of the application for transfer to the Cronin J, counsel for Ms KLD pointed to the fact that Cronin J was the trial judge who heard the child-related proceedings which were the proceedings in relation to which the costs were ordered. He stated that the proceedings were a condition precedent to these proceedings. He said that the order for costs is grounded in the conduct of the parenting proceedings by the husband.
Further, it was said that the question of the significance of the alleged misrepresentation of financial position by Ms KLD, to the exercise of the discretion by Cronin J, would be best heard by Cronin J. That is, he would be in the best position to weigh the impact on the exercise of discretion. While it was initially suggested that this was necessary because only Cronin J could know his reasons for the costs order, that submission was not pressed further once it was identified that Cronin J had published reasons in support of his orders.
While it may be accepted that it is preferable for the trial judge to hear an application such as this to set aside, on the basis that the trial judge has a familiarity with the case, it cannot be said that another judge determining the matter will have less than a full account of the reasons of the trial judge in making the original decision.
On the issue of the progress of the proceedings prior to the application for transfer, it was suggested by Ms KLD that she would consent to dealing with the matter afresh before Cronin J as though no evidential rulings had already been given. She said that the evidential rulings were preliminary matters until the claim by Mr SCVG was particularised, because until that point there was no way that the relevance of the evidence could be known.
One difficulty with this approach is that such particulars were not sought until after objections had been completed. What preceded the evidential rulings was the concession made by counsel on the application for summary dismissal, that the Family Court is not a court of pleadings, and that the basis on which Mr SCVG presented his case was to be derived from his affidavit material. This deprives the argument about a previous lack of particulars of force as the argument runs counter to the manner of conduct of the first day of the hearing of the matter.
In this case the matter has now progressed through the question of jurisdiction, through an application for summary dismissal and through objections and rulings upon the trial material, taking place on the first allocated day of hearing. The hearing of the matter may be considered to have already commenced with the affidavit evidence being confined as to its scope and ruled upon as part of the commencement of the trial.
If transfer was to occur it was incumbent upon Ms KLD to make the application at an earlier stage of the proceedings. Transfer of the proceedings at this stage would involve throwing away the day already spent on rulings on the evidence and other matters.
Such a consideration is sufficient to justify the refusal of application.
Costs
Ms KLD also sought costs in relation to the application to the extent that she has been successful in the application. The limited success enjoyed by Ms KLD in this instance, absent other identified features as justifying costs, means the starting position that each party will bear his or her own costs should not be departed from.
I certify that the preceding fifty-three (53) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Gill delivered on 8 August 2018.
Associate:
Date: 8 August 2018
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