TIZANI & TIZANI (SECURITY FOR COSTS)
[2014] FamCAFC 174
•15 September 2014
FAMILY COURT OF AUSTRALIA
| TIZANI & TIZANI (SECURITY FOR COSTS) | [2014] FamCAFC 174 |
| FAMILY LAW – APPEAL – Application to extend time to appeal – Delay – Where the respondent conceded the delay is not significant – Where there is sufficient explanation of the delay. FAMILY LAW – APPEAL – Prejudice – Whether the applicant would suffer prejudice if leave to appeal was not granted – Whether the respondent would suffer prejudice – Where the appeal has merit. FAMILY LAW – COSTS –– Where it is not appropriate to make a costs order. |
| Family Law Act 1975 (Cth) Family Law Rules 2004 (Cth) |
| Gallo v Dawson (1990) 93 ALR 479 Rutherford v Rutherford (1991) FLC 92-255 |
| APPELLANT: | Mr Tizani |
| RESPONDENT: | Ms Tizani |
| FILE NUMBER: | SYC | 7993 | of | 2007 |
| APPEAL NUMBER: | EA | 105 | of | 2014 |
| DATE DELIVERED: | 15 September 2014 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Ainslie-Wallace J |
| HEARING DATE: | 27 August 2014 11 September 2014 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 11 June 2014 |
| LOWER COURT MNC: | [2014] FCCA 876 |
REPRESENTATION
| SOLICITOR FOR THE APPELLANT: | Mr Rahme of Mark Rahme & Associates |
| SOLICITOR FOR THE RESPONDENT: | Mr Brown of Browns The Family Lawyers |
Orders
The Application in an Appeal filed on 10 September 2014 by the respondent/wife be dismissed.
The time in which the applicant/husband may file a Notice of Appeal against the orders of Judge Monahan made on 11 June 2014 be extended until
26 September 2014.The Notice of Appeal attached to the affidavit of Mr Tizani sworn and filed on 8 August 2014 will be deemed to be the Notice of Appeal and is to be filed by no later than 4.00pm on 26 September 2014.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Tizani & Tizani (Security for Costs) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE APPELLATE DIVISION OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EA 105 of 2014
File Number: SYC 7993 of 2007
| Mr Tizani |
Appellant
and
| Ms Tizani |
Respondent
REASONS FOR JUDGMENT
Mr Tizani (“the husband”) seeks leave to appeal against an order made by Judge Monahan of the Federal Circuit Court on 11 June 2014. The order required the husband to pay to Ms Tizani (“the wife”) the sum of $20,000 as security for her costs in property proceedings brought by the husband pursuant to s 79A of the Family Law Act 1975 (Cth) (“the Act”).
Leave is required because the husband’s appeal was not filed within the time prescribed by Rule 22.03 of the Family Law Rules 2004 (Cth).
The grant of leave is opposed by the wife.
Background
The parties married in 1986. There is contention between them as to when they finally separated. The wife contends that they separated in
mid-2007 but the husband asserts that they separated finally in April 2013. There are five children of the marriage. The youngest is aged 14. The children live with the wife.
On 20 February 2008 the parties agreed to property orders which effected a transfer of various property interests between them. It was not suggested that those orders were not given effect. On 21 April 2011, by consent, the February 2008 orders were set aside pursuant to s 79A of the Act and further property orders were made by consent.
On 13 July 2013 the husband filed an application seeking to set aside the consent property orders made on 20 February 2008 and on 21 April 2011 pursuant to s 79A of the Act and, in lieu of those orders, that further property orders be made.
On 11 September 2013 by application in a case, the wife sought an order that the husband provide $30,000 as security for her costs of the proceedings.
The application was heard on 14 March 2014 and on 11 June 2014 the judge ordered the husband to pay $20,000 into the trust account of the wife’s solicitor by way of security for her costs of meeting his application filed on 13 July 2013.
The husband wishes to appeal this order.
The husband attempted to file an appeal against the judge’s orders however, the time prescribed by the rules in which an appeal may be brought had expired. Thus the husband requires leave to file the appeal notwithstanding that time limit has expired
Reasons of the judge
After setting out the legal principles and identifying the criteria relevant to a consideration of the question of an order for security for costs, the judge considered each in turn. He first considered the husband’s capacity to meet any ordered costs and referred to the wife’s assertion that the husband has a gambling history such that he would be unlikely to be able to meet any costs order made against him. He further noted the wife’s submission that the husband’s financial circumstances are “unclear”, he not having accounted for the funds that had been available to him pursuant to the earlier orders [26] and [27].
The judge considered the prospects of success of the husband’s application. After setting out the husband’s submissions on the merits of the application, his Honour said:
32. Not surprisingly in these types of disputes, the wife asserts that on the evidence filed by the husband, “the claim has little merit”.
(emphasis in original)
His Honour then quoted extensively from the wife’s submissions.
The judge then moved to consider whether the husband’s claim is bona fide and said:
33. The husband outlines the “genuineness of the application” in paragraphs 10 to 12 of his affidavit sworn and filed on 18 October 2013. In summary he asserts that the relevant final Orders were not intended to be an appropriate adjustment of matrimonial property. He also asserts that his legal representatives will not receive payment unless he succeeds in obtaining the orders sought in his Initiating Application.
Thereafter the judge turned to the issue “Whether order for costs would be oppressive or stifle the litigation” and said:
34. Given his financial circumstances, the husband argues that, should he be required to provide security for costs, the proceedings will be effectively stayed. The husband argues that the wife is well aware that if her application for security for costs proceeds, “it would cause the proceedings to be stayed, presumably indefinitely”.
(emphasis in original)
After noting that the wife had not delayed in bringing the application, his Honour then turned to the amount of costs to be incurred by the wife and found that an amount of $20,000 as security for costs was reasonable.
He then concluded.
44. Having considered the discrete issue in dispute in light of the relevant principles and the available evidence, the Court is persuaded to make an order for security for costs. The required payment will be $20,000.00.
The husband’s appeal
The order that the husband provide security for costs is interlocutory and thus, in any event, the husband requires leave to bring the appeal.
It is useful to set out the grounds of the appeal which would be argued if leave is granted.
1. That the Judge erred in that, having set out the criteria on the basis of which such applications are to be determined, he failed to identify the bases on which he made the Orders of 11 June 2014.
2. That the Judge erred in that he failed to give sufficient weight to the evidence that an order for security for costs would stifle the litigation commenced by the Applicant Husband.
3. That the Judge erred in that he failed to give sufficient weight to the conduct of the Respondent Wife in causing the Orders of November 2011 (“the 2011 Orders”) to be made in the Local Court ... In particular she represented to the Applicant Husband that those Orders were intended, not as an adjustment of property interests, but to protect the equity in the property of the parties from the effects of the Husband’s gambling.
4. That the Judge erred in that he failed to give sufficient weight to the fact that the Orders were neither just nor equitable in that the Wife obtained virtually the whole of the net assets.
The principles relating to applications for an extension of time to file an appeal are set out in Gallo v Dawson (1990) 93 ALR 479. The granting of leave is not automatic and involves the exercise of discretion. The discretion to extend time is given for the sole purpose of enabling the Court to do justice between the parties. In determining whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the nature of the litigation and the consequences for parties of the grant or refusal of leave.
Delay
The extent of and the explanation for the delay in bringing the appeal is a relevant consideration. In this matter the time for filing the appeal expired on 10 July 2014.
In this matter it was common ground between the parties that on 12 June 2014 each party’s solicitor received an email from the judge’s chambers notifying them that judgment would be delivered on 13 June but that each was excused from attending. The email further advised that the reasons would be sent to each party. It was further common ground that the reasons for his Honour’s orders made on 13 June were received by the parties’ solicitors on 20 June 2014.
The husband’s solicitor said that he was away on leave and his office closed between 25 July and 10 August 2014.
Nonetheless, it seems that the husband attempted to file a Notice of Appeal on 5 August which was rejected, it being out of time. He then on 8 August 2014 filed an Application in an Appeal seeking an extension of time in which to file the appeal. Sensibly the solicitor for the wife conceded that although there was a measure of delay in attempting to file the notice of appeal, the delay was not significant.
Clearly a measure of the delay was occasioned by the somewhat unusual circumstances in which the orders were made but reasons were not provided until a week later.
The husband deposed that after receiving the orders he set about trying to borrow the money necessary to satisfy his Honour’s order and spoke to his brother to see whether a loan would be made by his family. He said:
7. When the Orders of Judge Monahan were made, I hoped to be able to raise the funds necessary to provide security for the costs of the Respondent. There are some funds in the amount of about $10,000 which belong to my family and to which I may obtain access. They are in a term deposit which matures on 19 August 2014.
He further said that both his solicitor and barrister have now agreed to act for him notwithstanding that he is not presently able to afford their fees but said that there was a measure of delay while both his solicitor and counsel considered the reasons for his Honour’s decision order and other matters were attended to.
I am satisfied that the husband has provided a sufficient explanation for the delay in bringing the appeal and further that the measure of the delay is not, in this case, particularly significant.
Merits of the proposed appeal
As part of a consideration of the application, it is necessary to consider whether the making of the order sought would be futile and thereby create an injustice to the respondent and cause needless expenditure of public funds if the appeal was otherwise to proceed. This involves consideration of whether the appeal is so devoid of merit that it would be futile to make the order sought. It is recognised that what must be clearly shown before an applicant is denied the right to have his or her appeal heard, is that the appeal would fail.
This determination of the merit of the appeal requires a consideration of whether the appeal is “arguable”. It will be readily understood that the determination of merit of an appeal for this purpose must, of necessity, be confined by the documents available to the court on the application.
It was contended for the husband that the appeal had merit because the judge failed to give reasons for the order he made, and further gave no weight or no apparent weight to the argument that to make the order would stifle the proceedings. Again, the solicitor for the wife fairly conceded that a reading of his Honour’s decision reveal no findings and no reasons for the order he made.
Although his Honour set out the relevant considerations necessary to the question of whether to order security for costs, he made no findings nor did he give reasons for the order. Although he adverts to the husband’s argument that such an order would bring the proceedings to a stop, he neither discussed the competing arguments nor made findings in relation to them.
As I have indicated, the husband’s appeal nevertheless requires a grant of leave, it being an appeal against an interlocutory order. In determining whether to grant leave the Full Court must be satisfied either that there has been an error of principle or that substantial injustice has been done to a party by the order appealed from (Rutherford v Rutherford (1991) FLC 92-255).
Clearly, that satisfaction can be reached if the Full Court considered the appeal was meritorious.
While a consideration of the apparent merit of an appeal at this stage must necessarily be constrained by the information available to the court, the appeal has merit such that it would not be futile to grant an extension of time in which to bring the appeal.
Prejudice
The obvious prejudice accruing to the husband if leave is not granted is that he will be unable to challenge the order and, having been unable to find the amount necessary to satisfy his Honour’s order, the litigation will be brought to an end. Given that the appeal has merit, that would be a prejudice to the husband.
However, consideration of prejudice rests not only with the husband but any prejudice to the wife must also be considered. It was argued for the wife that with the litigation pending, she is unable to finalise her financial affairs and, if leave is granted she would, per force, be compelled to participate in further litigation which would involve expense which may not be recouped.
Although to grant leave to the husband to bring the appeal will occasion prejudice to the wife, in all the circumstances, I am satisfied that the merit of the appeal, the length of and explanation for the delay in filing are such that leave ought to be given.
The application in an appeal
On 10 September 2014, after the husband’s application for leave had been heard, the wife filed an application in an appeal seeking leave to reopen her case on the husband’s application for leave, leave to file further evidence in response to that application and leave to make further submissions in response to the application.
The affidavit of the wife filed in support of the application asserted that on
20 August 2014 she became aware that the husband had accessed a bank account containing $10,000 and withdrawn the entire fund. The affidavit further annexes an exchange of emails between the parties’ solicitors which reveals, at least, contention between the parties as to who was entitled to that money.
Being unsure of the relevance of this proposed evidence, the matter was listed for mention and brief submissions were made by the solicitors for the wife and husband on the application and evidence.
Put briefly, the argument advanced for receiving the evidence was that although the husband claimed before the judge that an order for security for costs would preclude him from proceeding with his application for property orders and, as part of the application for leave to appeal out of time, asserted that if leave to appeal was not given, he would be unable to challenge the order for security for costs and thus, his application for property orders would be stifled, he had demonstrated that he could raise $10,000.
It was further argued for the wife that since the husband was able to obtain $10,000 and he may thus, be able to borrow the balance necessary to satisfy the judge’s order from his family as he said he hoped.
Of course the order of the judge was that the husband pay $20,000 by way of security for costs.
The issue for determination on the application for leave to appeal is whether strict compliance with the rules will work an injustice on the husband.
The evidence sought to be adduced is not relevant to any issue necessary to the determination of the application for leave to appeal.
The application in an appeal of the wife will be dismissed.
Costs
At the conclusion of the hearing the parties made submissions as to the costs of the application. In the event that the application succeeded, the wife sought no order for costs. The husband sought an order that the wife pay his costs of the application if it succeeded. It is not appropriate to make such an order. The application and hearing was brought about because of the husband’s failure to comply with the time constraints relevant to the bringing of an appeal. He has thus been required to seek an indulgence which has been granted. The wife was entitled to rely on the time limits prescribed by the rules and oppose the application.
I will make no order as to costs of the applications.
I certify that the preceding forty nine (49) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Ainslie-Wallace delivered on
15 September 2014.
Associate:
Date: 15 September 2014
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