Talwar and Sharma
[2018] FCCA 483
•1 March 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| TALWAR & SHARMA | [2018] FCCA 483 |
| Catchwords: FAMILY LAW – Security for costs. |
| Legislation: Family Law Act 1975, s.79 Federal Circuit Court Rules 2001, r.21.01 |
| Cases cited: Penfold & Penfold (1980) 144 CLR 311 Kennon & Kennon (1997) FLC 92-757 |
| Applicant: | MR TALWAR |
| Respondent: | MS SHARMA |
| File Number: | PAC 4550 of 2017 |
| Judgment of: | Judge Obradovic |
| Hearing date: | 12 February 2018 |
| Date of Last Submission: | 12 February 2018 |
| Delivered at: | Parramatta |
| Delivered on: | 1 March 2018 |
REPRESENTATION
| Counsel for the Applicant: | Ms Mahony |
| Solicitors for the Applicant: | Foteades Freeman Cohen |
| Appearing for the Respondent: | Mr Sparkes |
| Solicitors for the Respondent: | K R Lawyers & Consultants |
ORDERS
That pursuant to rule 21.01 of the Federal Circuit Court Rules2001, the wife shall pay to the trust account of KR Lawyers and Consultants the amount of $15,000 by way of security for costs within 42 days.
The proceedings are stayed pending the wife’s compliance with order 1 above.
IT IS NOTED that publication of this judgment under the pseudonym Talwar & Sharma is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PARRAMATTA |
PAC 4550 of 2017
| MR TALWAR |
Applicant
And
| MS SHARMA |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application for security for costs.
The husband, the Respondent in the substantive proceedings, brings the present application by way of an Application in a Case filed on 5 December 2017. He also relies on his Affidavit filed on the same day, as well as his Financial Statement.
The wife, the Applicant in the substantive proceedings, opposes the application. She relies on her Affidavits filed 11 September 2017 and 6 February 2018. She also relies on her Financial Statement filed 11 September 2017.
By way of substantive proceedings, the wife seeks only final orders and specifically in the following terms:
a)That the wife receive 18% from the net matrimonial assets; and
b)That the husband return to the wife all jewellery he is withholding from the wife.
The husband submits that a security for costs order is appropriate in the circumstances having regard to the wife’s impecuniosity and the poor prospects of success of her substantive application.
Relevant Principles
In Luadaka & Luadaka[1] the Full Court held as follows:
[1] [1998] FamCA 1520
61. In our opinion, when dealing with an application for security for costs the general rule provided for in s.117 (1) applies, namely that subject to s.117 (2) each party to proceedings shall bear his or her own costs. However, if the court is satisfied that there are circumstances that would justify an order then the court may, subject to s.117 (2A), make such order for security for costs as the court considers just. It is not necessary to establish that there are special circumstances. However, it is necessary to establish that there are justifying circumstances. The decision to order security for costs is discretionary, both as to whether to order security, and as to the amount to be secured.
62. The purpose of an order for security is to secure justice between the parties by ensuring that an unsuccessful party does not occasion injustice to the other. In considering whether or not to make an order, apart from those referred to in s.117(2A), matters which may be relevant include the following:
62.1 It may be relevant to take into account the means of an applicant to satisfy an order for costs if he or she is unsuccessful. Ordinarily the means of the applicant is not alone sufficient to justify an order for costs because of the rule that poverty should be no bar to justice. This is reinforced by s.117 (1). However, the financial circumstances of the applicant do not prevent an order being made if there are other grounds which justify an order. Financial weakness may be relevant, for example, if the applicant is a company. In relation to the means of the respondent, who is the applicant for security, it was held by Goldstein J in Alexander & Alexander (supra) and Gee J in B & B (supra) that the question is whether or not the respondent is able to pay his or her costs. Section 117 (2A)(a) requires consideration of the financial circumstances of both parties. However, we do not accept that it will only be in cases where the applicant for security does not have the means to meet his or her costs that an order would be made. In appropriate circumstances an order may be made even if the applicant for security has the means to pay his or her costs.
62.2 The prospects of success is a relevant matter to take into consideration: Parkinson & Co Ltd v Triplan Ltd (supra). However, ordinarily the court will not undertake a detailed assessment of the likelihood of the applicant’s success unless it can be demonstrated that there is a high probability of success or failure: Porzelack KG v Porzelack (UK) Ltd [1987] 1 WLR 420; Appleglen Pty Ltd v Mainzeal Corporation Pty Ltd [1988] FCA 15; (1988) 79 ALR 634; Equity Access Ltd v Westpac Banking Corporation [1989] FCA 361; (1989) ATPR 40-972. This is because of the lack of material at the time the application is dealt with. However, such an assessment may be possible in circumstances where, as in this case, affidavits have been filed in which the case sought to be made out is set out.
62.3 It is a relevant consideration whether the applicant’s claim is made bona fide, whether it is genuine and not trivial, vexatious or a sham: Parkinson & Co Ltd v Triplan Pty Ltd (supra); Lynnebry Pty Ltd v Farquhar Enterprises Pty Ltd (1977) 3 ACLR 133; J & M O’Brien Enterprises Pty Ltd v Shell Company of Australia Ltd [1983] FCA 96; (1983) 7 ACLR 790.62.4 It may be relevant to consider whether or not an order for costs would be oppressive or stifle the litigation. In Mantaray Pty Ltd v Brookfield Breeding Co Pty Ltd (1990) 8 ACLC 304 Byrne J said at 306:
“A factor in deciding whether security should be required is that the order may well mean that the action cannot proceed. That prospect does not require refusal of the application but it is often a significant matter”.
See also Rosenfield Nominees Pty Ltd v Bain & Co (1988) 14 ACLR 467 and Sydmar Pty Ltd v Statewide Developments Pty Ltd (1987) 5 ACLC 480.
62.5 It may be relevant to consider whether or not the litigation may involve a matter of public importance: Equity Access Ltd v Westpac Banking Corporation (supra); Jodast Pty Ltd v A & J Blattner Pty Ltd (1991) 104 ALR 248. In Quick on Costs at [4.9440] it is said that this will militate against the making of an order.
62.6 It may be relevant to consider whether or not there has been delay in bringing the application. An application may be refused if there is delay in making the application and prejudice is caused to the respondent to the application: Buckley v Bennell Design & Constructions Pty Ltd (1974) 1 ACLR 301 and Loreva Pty Ltd v CEFA Associated Agencies Pty Ltd (1982) 7 ACLR 164.62.7 Other relevant matters may include any difficulties of enforcing an order for costs and the amount of costs to be incurred.
Their Honours went on to further hold that this was not an exhaustive list of what may be taken into account.[2]
[2] At [63]
The husband certainly brought his application for security of costs promptly, indeed it was filed at the same time as his Response.
The Evidence
In order to properly consider the application for security for costs, it is necessary to consider the wife’s primary application for relief pursuant to s.79 Family Law Act 1975. This is done on the basis of the wife’s evidence at its highest[3]:
[3] The facts referred to below are as alleged by the wife in her affidavits filed in the proceedings
a)The parties were first introduced to each other on (omitted) 2013, but the wife was not interested in pursuing a relationship with the husband, she says because she was self-sufficient and had a good position in India where she lived, and earned a good income for Indian standards.
b)On 17 May 2013 the wife was approached by the husband’s family to discuss possible marriage, and an official proposal followed on (omitted) 2013. The wife accepted the proposal.
c)On (omitted) 2013 a marriage ceremony occurred between the parties at the (omitted) Court.
d)The parties lived together between (omitted) 2013 and (omitted) 2013, a period of 12 days before the husband returned to Australia.
e)The wife (and/or her family) did not provide a traditional dowry to the husband (and/or his family). Instead it was agreed that the wife would pay for the wedding expenses of the traditional wedding ceremony. Furthermore, the wife’s sister gifted her jewellery traditionally given to a bride.
f)On (omitted) 2014 a traditional or formal wedding ceremony took place.
g)The parties went on their honeymoon between (omitted) 2014 and (omitted) 2014. They travelled in (omitted) during the honeymoon and then the husband returned to Australia on (omitted) 2014.
h)The wife remained living in India and continued her employment. The wife says that after the husband returned to Australia, the attitude of her in-laws changed and they became “rude and aggressive in their behaviour”. According to the wife she was compared to another daughter-in-law who was wealthy and brought in a good dowry.
i)In (omitted) 2014, albeit after expressing some doubts about travelling to Australia, the wife was granted a visa. The wife says that she was told she had to pay for her own tickets to travel and as a result of that and other conversations with her in-laws she was very upset. She says “I did not understand why I was being treated as such after all I was their son’s wife should he not also provide for me otherwise what was the point of this marriage?”
j)The husband ultimately funded the airplane ticket for the wife to travel to Australia. She arrived in Sydney on (omitted) 2014. The wife complains that upon her arrival she was treated disrespectfully by the husband and her in-laws, for example by being expected to clean the dinner dishes and also by having her phone conversation with her sister on loud speaker with the whole family standing next to her and listening.
k)The wife says that her and the husband lived together with the ‘in-laws’. She says the husband insisted on this because the in-laws could not afford to live elsewhere. The wife was also apparently told that:
You will not be required to work but you will do all the household chores and anything else directed by my mother. You will be required to care for my parents if they are unwell. I will work I make enough money and that’s what you have to do…. Your qualifications mean nothing here stop causing problems and do as you are told. I am your husband. You listen to me.
l)The wife says that from the second day onwards she was required to do 15 hours of domestic duties, and that she primarily dealt with her mother in law who was alleged to be “rude, aggressive, verbally abusive towards and at times pushing me around if I was too slow with my daily chores”. She says that her life became unbearable, because she could not understand how such treatment was possible “in this day and age”.
m)The wife complains that she was not able to contact the husband during the day, and that the stress of the situation was such that one day after her mother-in-law “conveyed further lies” to the husband and he “started screaming” at her, she grabbed a knife and tried to hurt herself. The husband stopped her and took the knife away. The wife says that the stress continued and that she collapsed with exhaustion and was taken to (omitted) Hospital on (omitted) 2014.
n)The wife says that things improved after the incident and that the husband even took her to (omitted) for a trip. After the trip it seems things went back to how they were previously.
o)The wife deposes to significantly controlling behaviour by her in-laws, including for example not being able to shower or bath for more than five minutes, being prevented from listening to music on her laptop and being screamed at when she was not being compliant. The wife alleges her mail from India was intercepted and not given to her. She says she felt like a prisoner in her own home. She complains that the husband then became physically violent to the extent that on one occasion he grabbed her by the throat to kill her.
p)The wife deposes to further belittling behaviour by her mother in-law and also by the husband. She deposes to not being provided with medical assistance as soon as she needed it in October 2014, but rather that she was taken “eventually” – although it appears to have occurred within days of the wife making a complaint about pain in her back.
q)On (omitted) 2014 the wife travelled back to India. She says her sister paid for the ticket and she complains that to date the husband has not reimbursed her sister for it.
r)In early 2015 the wife learnt that the husband had listed for sale the apartment where the parties had lived in Australia. She complains that she left a number of personal belongings at that home.
s)In January 2016 the wife says the husband told her he would be sending her tickets to return to Australia, but the tickets never arrived.
t)The wife eventually returned to Australia, but upon her return the husband did not answer any of her phone calls and she says did not allow her access to her belongings, including her jewellery.
u)In terms of contributions, the wife says that she provided domestic duties for all the household members who lived with her and the husband, although it is not clear on her evidence just who this was nor how many people lived in their home. She also says that she had to do some painting, although once again, no detail is provided except that she found the job difficult but persevered without any assistance.
v)The wife says she has been treated for depression.
w)The wife says she is currently in full-time employment.
Importantly, the wife does not provide any evidence of assets acquired during the marriage by either of the parties, nor does she provide any meaningful evidence of assets held by the parties prior to the marriage or post separation. The extent of the wife’s evidence is that she had some jewellery, the value of which is asserted to be approximately $8,000 to $8,500.
The husband’s evidence in respect of the substantive proceedings is also relevant for the purposes of the present application. The husband says as follows:
a)The parties met in (omitted) 2013, and the husband proposed on (omitted) 2013. The marriage was registered on (omitted) 2013. The husband paid for the costs of the registration of the marriage (this is contrary to the wife’s evidence).
b)The costs associated with the wife’s visa application for Australia were paid for by the husband.
c)The parties lived together in India between (omitted) 2014 and 15 (omitted) 2014, during which time the formal Hindu wedding celebration occurred. The husband says he paid the majority of the costs of the wedding, the wife’s wedding attire, wedding venue and food and drinks, honeymoon costs and gold jewellery. The wife paid for his wedding ring.
d)The husband paid the fare for the wife to travel to Australia after she was granted her visa and the shipment of all her personal effects to Australia.
e)The parties commenced living together in Australia on (omitted) 2014.
f)The parties separated on 30 October 2014, when the wife returned to India with her sister paying for her airfare. The husband says that there was sporadic communication between them until November 2014, and then no communication until 16 June 2015.
g)The parties were divorced on 28 November 2017.
h)The husband says that on (omitted) 2008 he purchased a property at Property A, for $215,000 with his father contributing the deposit of $30,000 and the husband receiving a first home owner’s grant. There were renovations carried out totalling $27,000 which were also funded by the husband’s father.
i)In February 2011, the mortgage on that property was refinanced and $142,000 was drawn down and used to purchase a business operating as an (business omitted) office. The mortgage for the property was paid by the husband’s father “in lieu of his income from the (business omitted) office.” The property was transferred to the husband’s parents on 18 May 2014, and stamp duty was paid on the transfer. The husband’s parents discharged the mortgage on 5 May 2014, which at the time stood at $98,000. The husband says that he always held the property on behalf of his parents.
j)(omitted business) was purchased in 2011 by the husband and his brother, and it was the husband’s father and brother who worked in that business. The husband remained employed full-time with (employer omitted). The (omitted business) was sold on 27 April 2013 for $250,000 and the sale proceeds applied against the Property A property.
k)On 28 April 2014, the husband purchased Property B for $568,000. After stamp duty and lender’s mortgage insurance and other costs, the total cost of purchase was $596,321. The husband’s father paid the deposit of $56,800 and a short fall at settlement of $34,000. The husband’s father has been contributing $1,000 towards the mortgage from the date of purchase until February 2017. The husband repaid his father these moneys when he refinanced the property in early 2017.
l)At the time of marriage the husband had $30,000 in savings, superannuation of some $53,000 and a share portfolio worth approximately $70,000. This was in addition to the property in Property A which was purchased in his name.
m)The husband says that he wife did not contribute financially towards the mortgage of either property, the (omitted) business or otherwise towards the household. He says she made non-financial contributions of a general domestic nature, involving cooking, cleaning and upkeep of the home.
n)The husband says that he was born prematurely and has a number of ongoing and significant medical issues, the most significant of which is scoliosis of the spine. The husband has had surgery to correct some of his spinal injuries and there is further surgery planned. The husband suffers from secondary conditions as a result of his spinal condition. He also suffers from hypertension.
o)The husband denies the allegations of bullying, harassment and abuse made by the wife. The husband denies the particular allegations made by the wife as outlined in her evidence.
The husband has engaged a solicitor to provide him with advice and to act for him in these proceedings. His costs to date are $15,000 and he has been provided with an estimate of $40,000 to final hearing.
The husband ultimately seeks an order that the wife’s application for property adjustment orders be dismissed. He says if that is a successful application then he anticipates making an application for costs. He is concerned that the wife will not be able to meet any costs order if ultimately made. The wife’s financial circumstances as disclosed in her financial statement are certainly supportive of this.
Assessment of bona fides of the wife’s substantive case
The wife has not adduced any evidence of the parties’ assets, except to the extent mentioned earlier in these reasons. She has to date filed two affidavits which do not elucidate the basis of her claim for an 18% property adjustment order. It was submitted during the hearing of the security for costs application that she will be amending that application to perhaps 8-10%.
The period of cohabitation was very short, (omitted) 2014 to (omitted) 2014, although the marriage itself was longer, that is the parties’ marriage was registered in (omitted) 2013 and they separated on a final basis about 13 months thereafter. Even at its longest, the relationship lasted no more than 13 months.
The wife on her own case, made no financial contribution except by bringing in some jewellery and paying for the wedding, and the extent of her contributions are said to be non-financial. She lived in the former matrimonial home with the husband and did not have to pay for food, rent or other living expenses.
The wife is now employed full-time and has funds in a savings account of some $11,763. It is however, an agreed fact that the wife is largely impecunious, but this is not a matter that could be said to be of the husband’s doing.
The security for costs which the husband seeks is less than his estimated total legal costs, he seeks security in the amount of $25,000.
The wife is now said to be an Australian resident. She however has no assets in Australia. Her income is limited. The husband had significant assets coming into the relationship and he provided for the wife financially.
The wife’s prospects of success in respect of the substantive proceedings on the basis of her current evidence at its highest are poor. It is not the Court’s role to undertake social engineering or the equalisation of assets or financial resources.[4]
[4] See for example: Kennon & Kennon (1997) FLC 92-757 at p 84,303
Security for Costs?
The discretion to award costs is a broad discretion.[5]
[5] see for example Collins & Collins (1985) FLC 91-603.
The High Court held in Penfold & Penfold[6] that it is necessary for the Court to make a finding of justifying circumstances as an essential preliminary to the making of an order for costs. The Court is not required to specify the circumstances which justify the making of such an order.
[6] (1980) 144 CLR 311
As long as there is an essential preliminary finding that there are justifying circumstances to make a costs order, there is no additional or special onus which the Applicant needs to establish for an order for costs.
The Court is satisfied that there are circumstances justifying a costs order.
The litigation is still in the very early stages. The Court, as noted above, has assessed at present that the wife has poor prospects of success in respect of her current application. This much is also evident by virtue of the fact that an amended initiating application is foreshadowed.
The husband has brought the application promptly and the evidence which he has filed in the proceedings sheds a significant amount of light on the parties’ financial contributions during the period they were together – matters which were to a large extent not addressed in the two affidavits which the wife had to date filed.
The wife’s solicitors are acting for her on a pro-bono basis, so much was said during this interlocutory application. As such, the order as sought by the husband is not likely to stifle the litigation from the perspective of the wife being able to be represented.
The likely amount of costs the husband will incur to final hearing is almost double what he is seeking by way of security for costs. It is a reasonable amount in all of the circumstances, however it is clearly more than what the wife currently has.
Rule 21.01 Federal Circuit Court Rules2001 provides that in making an order for security for costs the Court may set the amount of costs, as it considers appropriate.
The wife has some $11,700 in savings, she is employed on a full-time basis and earns $810 net per week. She does not pay any rent and her total weekly expenditure seems to be comprised of her income tax, and superannuation contributions.
Conclusion
In all of the circumstances, the Court finds that the interests of justice are served by an order for the wife to provide security for the husband’s costs and that the current proceedings be stayed pending the provision of such amount.
The amount which the wife will be ordered to pay is $15,000, this being an amount which the court assesses is reasonable given the wife’s financial circumstances, the costs incurred by the husband to date and likely future costs.
For all of these reasons, orders as set out at the forefront will be made.
I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of Judge Obradovic
Date: 1 March 2018
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