Weng and Wah and Ors
[2019] FamCAFC 242
•10 December 2019
FAMILY COURT OF AUSTRALIA
| WENG & WAH AND ORS | [2019] FamCAFC 242 |
| FAMILY LAW – APPEAL – SECURITY FOR COSTS – Where the wife and adult son seek security for costs from the husband in the amount of $19,857 each – Where their application was, originally, for $70,000 and $60,000 respectively – Where the trial judge made serious findings as to all parties’ lack of disclosure and failure to comply with Court orders at first instance – Where neither the wife nor the son attempted to redress these failures to any extent for the purpose of bringing these applications – Where such failure demonstrates a lack of bona fides on the part of these applicants – Where the current grounds of appeal are to be the subject of amendment – Where, on the grounds as currently stated, the appeal lacks merit – Where orders for security for costs of an appeal are appropriately reserved for the most obvious of cases – Where this is not such a case – Applications dismissed – Where the husband’s costs, fixed in the sum of $10,000, are reserved to the appeal. |
| Family Law Act 1975 (Cth) s 117 Family Law Rules 2004 (Cth) rr 1.08, 19.05 |
| Adult Guardian and Mother’s Parents and B and Child’s Representative (2002) FLC 93-116; [2002] FamCA 874 Atkins & Hunt(Security for Costs) (2015) FLC 93-646; [2015] FamCAFC 66 Frazier & Valdez (2016) FLC 93-729; [2016] FamCAFC 163 Gronow v Gronow (1979) 144 CLR 513; [1979] HCA 63 Jones and Jones (2001) FLC 93-080; [2001] FamCA 460 Luadaka v Luadaka (1998) FLC 92-830; [1998] FamCA 1520 Malcher & Malcher (Security for Costs) (2017) FLC 93-803; [2017] FamCAFC 202 Palma & Caleffi (Security for Costs) [2011] FamCAFC 174 Robinson Helicopter Co Inc v McDermott (2016) 91 ALJR 679; [2016] HCA 22 Sawer & Sawer [2007] FamCA 140 |
| APPELLANT: | Mr B Weng |
| FIRST RESPONDENT: | Ms Wah |
| SECOND RESPONDENT: | Mr C Weng |
| THIRD RESPONDENT: | D Pty |
| FOURTH RESPONDENT: | E Pty Ltd |
| FIFTH RESPONDENT: | F Pty Ltd |
| SIXTH RESPONDENT: | G Ltd |
| SEVENTH RESPONDENT: | The Mr C Weng Family Trust |
| EIGHTH RESPONDENT: | The H Family Trust |
| NINTH RESPONDENT: | The J Family Trust |
| TENTH RESPONDENT: | K Pty Ltd |
| ELEVENTH RESPONDENT | L Pty Ltd |
| FILE NUMBER: | MLC | 9718 | of | 2014 |
| APPEAL NUMBER: | NOA | 82 | of | 2019 |
| DATE DELIVERED: | 10 December 2019 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Kent J |
| HEARING DATE: | 9 December 2019 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 16 August 2019 |
| LOWER COURT MNC: | [2019] FamCA 562 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Hartwell |
| SOLICITOR FOR THE APPELLANT: | Tang Lawyers |
| COUNSEL FOR THE FIRST RESPONDENT: | Mr Taylor |
SOLICITOR FOR THE FIRST RESPONDENT: | NB Lawyers |
| COUNSEL FOR THE SECOND RESPONDENT: | Mr Drysdale |
| SOLICITOR FOR THE SECOND RESPONDENT: | HopgoodGanim Lawyers |
| THE THIRD TO ELEVENTH RESPONDENTS: | No appearance |
Orders
The Application in an Appeal filed by the First Respondent on 31 October 2019 be dismissed.
The Application in an Appeal filed by the Second Respondent on 31 October 2019 be dismissed.
The husband’s costs of and incidental to these applications fixed in the sum of $10,000 be reserved to the Full Court hearing the appeal.
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 Weng & Wah and Ors 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).
| THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE |
Appeal Number: NOA 82 of 2019
File Number: MLC 9718 of 2014
| Mr B Weng |
Appellant
And
| Ms Wah |
First Respondent
And
| Mr C Weng |
Second Respondent
And
| D Pty Ltd |
Third Respondent
And
| E Pty Ltd |
Fourth Respondent
And
| F Pty Ltd |
Fifth Respondent
And
| G Pty Ltd |
Sixth Respondent
And
| The Mr C Weng Family Trust |
Seventh Respondent
And
| The H Family Trust |
Eighth Respondent
And
| The J Family Trust |
Ninth Respondent
And
| K Pty Ltd |
Tenth Respondent
And
| L Pty Ltd |
Eleventh Respondent
REASONS FOR JUDGMENT
The present applications for the provision of security for costs of an appeal arise in the following context.
Each of Mr B Weng (for convenience referred to as “the husband”) Ms Wah (for convenience referred to as “the wife”) and their adult son Mr C Weng (for convenience referred to as “the son”) distinguished their conduct in property settlement proceedings by their respective failures to make full and frank disclosure of their financial circumstances, and failures to comply with orders of the Court directed to ensuring the integrity of those proceedings, including orders for the obtaining of independent expert valuation evidence of relevant property interests.
That each of these parties so failed is made abundantly clear in the reasons for judgment of Forrest J delivered on 16 August 2019 in support of the property settlement orders his Honour then made determining those proceedings.
At [4] of those reasons, his Honour refers to repeated occasions upon which Court orders were made including as to disclosure, valuation evidence being obtained and as to other preparation for trial. At [5] his Honour records:
5.The matter was listed before me in a Duty List on 14 February 2017. I then determined that it needed to be Judge managed to trial. There were another five appearances before me before I determined to just list the matter for trial regardless of the state of readiness. It became clear to me that the matter would never be completely ready for trial if the Court was to be satisfied that each of the parties had properly complied with their duty to fully and frankly disclose their financial situation.
At [6] and [7] his Honour made the following observations:
6.… I never gained a sense that I could actually accept as true much of what I was being told by any of the parties.
7.One thing I was plainly satisfied of, was that none of the parties had any intention of complying fully with disclosure Orders and Orders for the provision of valuations, or particularising the final Orders sought, so that the matter could be made ready for trial. Accordingly, to save judicial time and Court resources, I simply listed the matter for final trial, considering that would have to be sufficient to cause the parties to make the best case that they could against the other party or parties.
The reasons for judgment are thereafter interspersed with findings made by the trial judge as to one or other party having failed to make proper disclosure, or to comply with orders. By way of example only, and by no means being exhaustive:
a)At [33] and [144] his Honour refers to the husband’s failure, despite orders, to obtain and produce independent expert evidence as to the value of an apartment the husband owns in China;
b)Commencing at [125] is the trial judge’s discussion of the business/companies [K] Pty Ltd and [L] Pty Ltd culminating in the finding at [143] that the husband holds undisclosed property interests;
c)At [169], [170], [173(vi)] and [194] his Honour makes references to the failures by the wife and the son, despite orders, to obtain and produce independent expert evidence of the value of a business and company they each were found to hold an interest in and their lack of disclosure about the business; and the consequent inability of the trial judge to determine the true extent of the wife’s property interests, or the overall value of those interests;
d)At [173(v)] his Honour records his inability to determine how much is owed to the wife by a family trust controlled by the son – finding that at least $250,000 is owed – that inability being due to the son’s failure to fully and frankly disclose.
The trial judge referred, at [201], to the lack of full and frank disclosure on the part of all three of the husband, the wife and son “and my consequential inability to be able to fix accurate values to much of their property”.
At [203], the trial judge records “[t]he total value of the property and superannuation interests” that his Honour was able to value was not including any amounts for various interests of the husband, and of the wife, respectively.
Notably, his Honour considered what he described as “interaction” between the son and the wife revolving around certain corporate entities and businesses as warranting a referral of the matter to the Australian Taxation Office ([217] to [222]).
The husband has appealed from the property settlement orders by Notice of Appeal filed on 13 September 2019. On 31 October 2019, each of the wife and the son filed an Application in an Appeal for the provision of security for costs of the appeal.
In my judgment, as will be further discussed, the context referred to has the consequence of creating significant difficulties for each of the wife and the son in discharging the onus of proof they each bear on their respective applications for security. Moreover, it ill behoves the wife and the son to engage in
finger-pointing at the husband’s conduct in the trial proceedings, given their own conduct, in an effort to support their current applications.
The appropriate forum in which the husband’s conduct of the trial proceedings falls to be considered, if that conduct can be characterised as significantly worse than that of either the wife or the son, is in an application for costs of the trial appropriately heard and determined by the trial judge.
Security for costs – principles
The power to make an order for security for costs is found in s 117 of the Family Law Act 1975 (Cth) (“the Act”). Each of the wife and the son have the onus in their respective applications of establishing circumstances that justify an order as to costs, pursuant to s 117(2) of the Act, by reference to the relevant matters referred to in s 117(2A) of the Act and the relevant discretionary considerations for security for costs orders.
Whilst described in different ways and with varying emphasis, the authorities establish that the following (non-exhaustive) list of factors, additional to or in the context of the five specific matters identified in s 117(2A) of the Act, may be relevant to the exercise of discretion to order security for costs in respect of an appeal:
a)Whether the claim for security is made bona fide;
b)The financial circumstances of the parties to the proceedings: impecuniosity of the appellant is not alone sufficient to justify an order for costs but nor does it prevent an order being made if there are other grounds which justify an order. As regards the respondent, an order is not confined to cases where the respondent (the applicant for security) does not have the means to meet his or her costs – in appropriate circumstances an order may be made even if the applicant for security has the means to meet his or her costs;
c)The prospects of success of the appeal – ordinarily the Court will not undertake a detailed assessment of the likelihood of the appellant’s success unless it can be demonstrated that there is a high probability of success or failure;
d)Whether the appeal is bona fide, whether it is genuine and not trivial, vexatious or a sham;
e)Whether an order for costs would be oppressive or stifle the litigation: that prospect does not require a refusal of the application but is often a significant matter;
f)Whether or not the litigation involves a matter of public importance (if so, this will militate against the making of an order);
g)Whether or not there has been delay in bringing the application for security and consequent prejudice to the respondent (appellant);
h)Other relevant matters may include any difficulties of enforcing an order for costs and the amount of costs to be incurred.
(See Luadaka v Luadaka (1998) FLR 92-830; Jones and Jones (2001) FLC
93-080; Adult Guardian and Mother’s Parents and B and Child’s Representative (2002) FLC 93-116; Sawer & Sawer [2007] FamCA 140; Palma & Caleffi and Anor (Security for Costs) [2011] FamCAFC 174; Malcher & Malcher(Security for Costs) (2017) FLC 93-803; Atkins & Hunt (Security for Costs) (2015) FLC 93-646 and Frazier & Valdez (2016 FLC 93-729)).
Many of those factors find reflection in r 19.05(2) of the Family Law Rules 2004 (Cth) (“the Family Law Rules”) setting out the matters the Court may consider in deciding whether to make an order for security for costs.
Rule 19.05(2) of the Family Law Rules provides the following list of matters a Court may consider on an application for security for costs:
…
(a)the applicant’s financial means;
(b)the prospects of success or merits of the application;
(c)the genuineness of the application;
(d)whether the applicant’s lack of financial means was caused by the respondent’s conduct;
(e)whether an order for security for costs would be oppressive or would stifle the case;
(f)whether the case involves a matter of public importance;
(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;
(h) whether the applicant ordinarily resides outside Australia;
(i) the likely costs of the case;
(j) whether the applicant is a corporation;
(k) whether a party is receiving legal aid.
Bona fides of the applicants – genuineness of the applications – conduct s 117(2A)(c)
It is trite that each of the wife and the son bear the onus of proof on their respective applications for the provision of security for costs.
Despite the serious and extensive findings of the trial judge as to the failures of each of the parties to the proceedings to make full and frank disclosure, and other failures to comply with orders for valuation and the like, there was no attempt whatsoever on the part of either the wife or the son to redress these failures to any extent for the purpose of bringing these applications. That is, there was no attempt by either of these parties to elaborate upon their financial circumstances by any convincing evidence or to address any of the deficiencies identified by Forrest J.
Thus it is that, having failed to comply with orders of the Court at the trial stage of these proceedings, these parties now seek to call, in their aid, the Court’s powers to make orders as to security for costs with respect to the husband’s appeal.
In my judgment, the existence of these deficiencies in the first instance, compounded by the failure of both of these applicants to make any attempt to redress the identified deficiencies referred to in bringing these applications, demonstrates a lack of bona fides on the part of these applicants and is relevant conduct within the meaning of s 117(2A)(c) of the Act.
Moreover, it renders any meaningful consideration of the financial circumstances of the applicants – a mandatory consideration under s 117(2A)(a) for considering a costs order – unattainable.
Relevant also to the question of the bona fides of the applicants and their conduct of these applications, is the contrast between the applications as advanced on the material compared with the applications as ultimately argued at the hearing. Taken from the material, the husband confronted applications by each of these applicants for the provision of $60,000 by way of security for the son’s costs and $70,000 for the wife.
These claimed amounts were obviously indemnity costs figures (as distinct from party and party costs) and as expounded in exchanges during argument were only achieved by inclusion of several highly questionable items which cannot be characterised as reasonable, even on a solicitor and client basis.
In the case of the wife, her claim was advanced even though, taken from her evidence filed in support of her application, there was actually no evidence that the wife had in fact retained solicitors or counsel to represent her on the appeal and thus, no evidence that she would actually incur legal costs in responding to the husband’s appeal. This is in circumstances where it is obvious that the wife and the son are unified in their opposition to the husband’s appeal.
Rule 1.08 of the Family Law Rules imposes responsibilities upon parties to the litigation and their lawyers including an obligation to ensure that any orders sought are reasonable in the circumstances of the case (r 1.08(1)(a)) and, for example, to assist the just, timely and cost effective disposal of cases (r 1.08(1)(g)). There was never any sensible basis upon which security for costs would be ordered on an indemnity basis in the respective amounts advanced by the applicants and it was, thus, never reasonable for the applications to be framed on this basis.
In the event, it was only after the hearing of the applications had commenced that the son reduced the amount he claimed for security from $60,000 to $19,857. The wife also mirrored that approach thereby reducing her claim from $70,000 to $19,857.
This reduced sum derives from calculations contained in an affidavit of the solicitor for the son filed by leave only at the hearing. The applicants’ respective Summaries of Argument filed in advance of the hearing (each settled by their respective counsel) were predicated upon the exorbitant claimed amounts being maintained. However, even the revised/reduced amounts ultimately claimed included a number of items which are speculative in the sense of being amounts referable to “interlocutory issues” with respect to the appeal concerning hypothetical interlocutory applications that may never actually eventuate. Those items for “interlocutory issues” add something in the order of about $4,000 to the estimated costs and if those items are excluded the claim for security would amount to no more than about $15,000.
In my judgment, these facts seriously challenge the bona fides of these applications and are relevant to the discretionary exercise involved in determining them. The husband was confronted with applications for security for costs in the unreasonable amounts claimed of $60,000 for the son and $70,000 for the wife (a total of $130,000) and it was only at the hearing itself that these claims reduced to about one third of the original amounts claimed.
Merits of the appeal
Taken from the reasons for judgment of the trial judge, the wife was born in China in 1948 and is 71 years old. The husband was born in China in 1950 and is 69 years old. Those parties married in 1976 and in 1978 their only son was born, who is now 41 years of age.
In 2002, the son moved to Australia to study and in 2003 he obtained a permanent residency visa. Soon thereafter, the son sponsored the husband and the wife to obtain residency visas in Australia. The son became a citizen in 2004.
Once the family were resident in Australia the husband and wife purchased their son a house in suburb M. They also began a business importing stock from China and selling it in Australia. That business was owned by the company N Pty Ltd and the business traded under the name “O Business”. The son was primarily responsible for the running of that business as neither the husband nor the wife spoke English.
Between 2004 and the parties’ separation in April of 2012, there were a significant number of purchases of real property with complex and ill-disclosed financial arrangements between family discretionary trusts controlled by the son; corporations set up by the parties jointly or as individuals, some with the involvement of other extended family members. The reasons for judgment refer to approximately 10 properties being purchased and reference is made to multiple family trusts and corporations and various business operations.
As already referred to, the trial judge made it clear that it was impossible to know the full extent of the financial circumstances of the parties.
The trial judge determined that within that significant limitation his Honour could identify property and superannuation interests with a total value of $1,191,000. This was over and above the husband’s current interest the trial judge found the husband to have in businesses and Melbourne property (which his Honour could not value by reason of the husband’s defaults) and similarly did not include any amount for the wife’s interests in a company and a business conducted in conjunction with the son, likewise the result of non- disclosure and recalcitrance.
The trial judge determined that, taking into account the wife’s superior post- separation contributions justifying an adjustment of 5 per cent in the wife’s favour, the known property and superannuation “pool” should be divided in the proportions of 55 per cent/45 per cent in the wife’s favour. That resulted in the husband being entitled to receive or retain property worth $535,950.
In determining orders the trial judge assigned a debt owing to the husband by the son’s trust to the wife.
Notably, the trial judge recorded this at [211]:
211.As I have observed already, the husband proudly told the Court about how he regards the business that he is running as his business and that he has the confidence to run it well. Given the large amount of rent it is paying for premises ultimately owned by his wife and given the very large amount of money it is paying for “management fees” that he said he could not explain (which I did not accept as honest), I am more than satisfied that the husband is doing well from this business. I reject his assertions that it is not making any money and that he earns nothing from it. In the circumstances, after considering the matters required to be considered by s 79(4)(e) and s 75(2) of the Family Law Act, I do consider a further adjustment in favour of the wife such as displaces that amount of $26,515 that would still be owing to the husband is appropriate, so that orders that I consider just and equitable as between the husband and wife can be made.
As the authorities referred to above confirm, ordinarily the Court does not undertake a detailed assessment of the likelihood of the appellant’s success unless it can be demonstrated that there is a high probability of success or failure. The essential contention of each of the wife and the son is that there is a high probability of failure of the husband’s appeal.
The husband’s grounds of appeal are endorsed with a notation to the effect that the grounds ought be treated as “preliminary” pending receipt and review of the transcript of the proceedings “at which point the [a]ppellant will file more detailed grounds of appeal.” The husband’s counsel sought to emphasise at the hearing the prospect of significant amendments of the grounds.
Of course, it would be speculative to embark upon a consideration of how the current grounds might be improved or replaced and obviously this factor falls to be considered by reference to the current grounds of appeal as framed.
Those grounds are as follows:
1.The Trial Judge erred in concluding that the corpus of the [Mr C Weng Family Trust] was beneficially the property of the Second Respondent, to the exclusion of the Husband and the Wife.
2.The Trial Judge erred in finding (at paragraph 194) that that the Husband never acquired a beneficial interest in the business commenced by [N Pty Ltd] and ultimately operated by [G Pty Ltd].
3.The Trial Judge erred in finding (at paragraph 198) that the assets of the Husband included a beneficial interest in the property of which his new wife is the registered proprietor.
4.The Trial Judge erred in finding (at paragraph 206) that the Wife had made an indirect contribution to the establishment of the business operated by [K Pty Ltd].
5.The Trial Judge erred in finding (at paragraph 208) that there was a disparity in the parties’ post separation contributions.
6. The orders were manifestly wrong and unjust.
7. The trial judge erred in law.
8.The learned trial judge failed to give adequate reasons for his ultimate decision.
9.The learned trial judge erred in the exercise of his discretion in making the orders.
10.The orders made were against the evidence and against the weight of the evidence.
(As per the original)
It can be seen that Grounds 6 to 10 inclusive constitute bare assertions devoid of sufficient particulars as to the error purportedly asserted. These in reality are not proper grounds of appeal at all. Certainly, none of these grounds support any conclusion to the effect that there is some merit in the husband’s appeal.
With respect to the balance of the grounds of appeal it can be seen that each of the grounds challenge an ultimate finding of fact made by the trial judge but not any foundational findings. There are limited confines in challenging findings of fact made by a trial judge. As observed by the High Court in Robinson Helicopter Co Inc v McDermott (2016) 91 ALJR 679 at [43]:
… A court of appeal conducting an appeal by way of rehearing is bound to conduct a “real review” of the evidence given at first instance and of the judge’s reasons for judgment to determine whether the judge has erred in fact or law. If the court of appeal concludes that the judge has erred in fact, it is required to make its own findings of fact and to formulate its own reasoning based on those findings. But a court of appeal should not interfere with a judge’s findings of fact unless they are demonstrated to be wrong by “incontrovertible facts or uncontested testimony”, or they are “glaringly improbable” or “contrary to compelling inferences” …
(Footnotes omitted)
Nothing put forward by the husband demonstrates how it is that the ultimate findings of fact of the trial judge referred to may be liable to be set aside as falling into one of the categories referred to by the High Court.
With respect to Ground 1, by which the husband asserts error in the finding that the subject trust was beneficially the property of the son, it can be seen from the reasons for judgment that the trial judge primarily relied upon the presumption of advancement and that the husband had not discharged the burden resting upon him of proving that the presumption of advancement did not apply.
In short, the husband does not demonstrate how it is that, on appeal, he has prospects of demonstrating that the subject finding of fact constitutes an error on the part of the trial judge.
Much the same can be said in relation to each of the other grounds of appeal. That is, a reading of the reasons for judgment demonstrates how the trial judge arrived at each of the ultimate findings of fact the subject of these challenges but the husband does not demonstrate how it is that he has prospects of disturbing those ultimate findings on appeal or his arguments in support of his claims of error.
It would seem that, at best, the husband will advance arguments similar to those he advanced at trial in an effort to challenge the subject findings by reference to the weight of evidence. Weight challenges are notoriously difficult to establish on appeal (see, for example, Gronow v Gronow (1979) 144 CLR 513).
It follows then that on the grounds of appeal as currently framed, and within the limitations of not yet having available the husband’s Summary of Argument on appeal, the husband’s appeal does not appear to be burdened with merit. Whether it is doomed to fail is not something the Court can conclude at this stage however, it can be said that on the grounds as presently framed, and given the strong findings made by the trial judge as explained in the reasons (including adverse credit findings against the husband), there would appear to be a probability of failure of the appeal.
That noted, it is not established to my satisfaction that the husband is pursuing this appeal only as an abuse of process or as a means to “persecute” the wife and/or the son, as is submitted by the wife. Nor do I consider that it is established that a relevant consideration is, as each of the wife and son would have it, that the husband’s method of conduct of the appeal is likely to be vexatious by reference to his conduct at the trial stage. There is yet to be any non-compliance by the husband with the requirements of prosecuting his appeal and the applicable rules of court governing appeals is the means by which any default in conduct may be addressed.
It scarcely lies in the mouths of the wife and the son to say that the husband’s conduct in the trial proceedings can be contrasted, adversely, with their own conduct, when the reasons for judgment of the trial judge in discussing their approach to their own business interests includes the following example:
170.There was little other disclosure by them about the business. Certainly, no valuation of the [Q business] or the shareholdings in [G Pty Ltd] was produced, despite order made by me early in the proceedings. What came out was only partial disclosure and it only came out through the efforts of the husband and his legal representatives by way of subpoenas and persistence in questioning. I am quite satisfied that the son and the mother wilfully failed to disclose as they were obliged to and as they knew they were obliged to.
Resolution
On the findings of the trial judge, whilst the conduct of each of these parties precluded anything remotely approaching a complete picture of the financial circumstances of each party to be ascertainable, it can be concluded that on such of the findings the trial judge was able to make, none of these parties is financially impoverished. What is impossible to know is whether there exists any relevant financial disparity as between the parties. Plainly enough on the findings the trial judge made the son holds property interests of significant value as compared with the value of the limited identifiable property of the husband and the wife but, of course, the financial picture is far from complete for the reasons already discussed. It may be that the true financial position of one of these parties is vastly superior to that of the others, but there is no way of telling that.
Again, on the findings of the trial judge, the husband, as appellant, would have the means to satisfy orders for costs if his appeal is unsuccessful. I am not persuaded that any difficulty in enforcing orders for costs against the husband assumes determinative significance. The husband is an Australian citizen with established links to living in Melbourne with his Melbourne based wife. On the findings of the trial judge, the husband has significant business interests in Melbourne. As his counsel pointed out at the hearing, the husband has no history of failing to comply with orders for costs. Whilst there may be issues confronted in enforcing costs orders, I am not persuaded that this of itself looms as a significant or determinative factor, balanced against others.
On the findings of the trial judge, each of the wife and the son have the means of meeting their own costs of the proceedings, taking into account also the financial effect of the orders the trial judge made. It follows that it does not appear that an order for security for costs is necessary to ensure that if the husband’s appeal is unsuccessful, and costs are ordered against the husband, there is likely to be injustice occasioned to the wife or the son. That is the overriding purpose of an order for security for costs.
Reference has already been made to the feature that, in her evidence filed in support of this application, the wife did not unequivocally assert that she would in fact be legally represented for the appeal and thus did not establish that she would necessarily incur any legal costs for the appeal. It is readily apparent that the wife and the son are united in their approach to opposing the husband’s appeal.
There has been no delay in bringing the applications for security; the litigation does not involve any matter of public importance and the husband does not provide evidence to support a conclusion that orders for security would stifle the litigation. Added to these features, the apparent limited prospects of success of the appeal is a factor in favour of security being ordered.
However, in Malcher & Malcher (Security for Costs) (cited above) the Full Court observed at [60] as follows:
60.It is important to bear in mind that the starting position under s 117(1) is that each party is to bear his or her own costs. We also bear in mind what was said by the Court in Halsbury & Halsbury [2008] FamCAFC 170:
34. Before concluding we take the opportunity to make the following observations regarding applications for security in relation to the costs of an appeal. Such applications appear increasingly to be taking up the time and resources of the litigants and of the Court. The proper place of such applications and the competing rights that lie at the heart of such applications need to be borne in mind by those seeking them.
35. Appeals are a part of our system of law. They operate as part of the proper checks and balances on the actions and decisions of trial judges. Litigants have a right to appeal in circumstances where they, properly and bona fide, allege error on the part of the trial judge (subject of course to the requirements in certain circumstances of leave to appeal being granted). That right to appeal is an important part of our system of law. It should not be fettered except for good reason.
In my judgment this serves to highlight that orders for security for costs of an appeal are appropriately reserved for the most obvious of cases. For the reasons discussed, in particular, the bona fides of the applicants in these applications, I am not persuaded that, on balance, this is such a case.
In my judgment, each of the applications for security for costs ought be dismissed.
Costs of these applications
In the event the applications were dismissed the husband seeks an order for costs in his favour. To that end, the husband filed on 5 December 2019 a schedule of his claimed costs in accordance with Order 4 made by the Appeals Registrar on 5 November 2019. The total of the amount claimed for costs as per that schedule is $12,861.67.
The first six items in that schedule bear dates which pre-date the filing and service of the subject Applications in an Appeal and thus cannot be items referable to these applications. Allowance is made in that estimate for attendance by a lawyer for four hours on the hearing of the applications in circumstances where about half of that time was occupied in the hearing. It is not readily apparent to me that it is reasonable to allow counsel’s fees for two hours for a telephone appearance at the procedural hearing before Registrar Kane and a following conference with instructing solicitors by counsel.
In my judgment, doing the best I can on the available material, the husband’s reasonable party and party costs of and incidental to these applications amount to a total of $10,000.
In my judgment, the husband’s costs referable to these applications ought be reserved to the Full Court hearing the appeal which can deal with all relevant costs when the outcome of the appeal is known. That Court will have the benefit of the grounds of appeal as ultimately argued by the husband together with his Summary of Argument. It may be that the husband does not enhance his grounds of appeal in any material respect and that a Full Court determines that his appeal was so lacking in merit, that the husband ought not receive any order for costs of this interlocutory application. Alternatively, it may be that the Full Court determines that the husband’s appeal succeeds or that in all of the circumstances he ought at least have the costs of these Applications in an Appeal in the sum fixed by me.
For these reasons I make the orders set out at the commencement of them.
I certify that the preceding sixty-four (64) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Kent delivered on 10 December 2019.
Associate:
Date: 10 December 2019
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