Zane and Allan

[2007] FamCA 184

FAMILY COURT OF AUSTRALIA

ZANE & ALLAN [2007] FamCA 184

FAMILY LAW – APPEALS – SECURITY FOR COSTS – Appellant to pay security for the respondent’s costs of the appeals.

APPELLANT: ZANE

RESPONDENT: ALLAN

FILE NUMBER: SYF 6790 of 2000

APPEAL NUMBER: EA 58 of 2006

DATE DELIVERED: 21 February 2007

PLACE DELIVERED: Sydney

JUDGMENT OF: Coleman, Warnick & May JJ

HEARING DATE: 21 February 2007

LOWER COURT JURISDICTION: Family Court of Australia

LOWER COURT JUDGMENT DATE:

LOWER COURT MNC:

REPRESENTATION

COUNSEL FOR THE APPELLANT: Mr Broun QC

SOLICITOR FOR THE APPELLANT: Luminous Legal

COUNSEL FOR THE RESPONDENT: Mr Lloyd

SOLICITOR FOR THE RESPONDENT: Paul and Paul Lawyers

Orders

1. That the appeals EA 98 of 2005 and EA 58 of 2006 be and are hereby dismissed unless within 60 days the appellant husband pay the sum of $5000 to the Family Court of Australia for the appropriate recipient of such moneys by way of security for the wife's costs of the said appeals.

IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Full Court delivered this day will for all publication and reporting purposes be referred to as Zane and Allan.

FAMILY COURT OF AUSTRALIA AT SYDNEY

Appeal Number: EA58 of 2006
File Number: SYD 6790 of 2006

ZANE

Appellant

And

ALLAN

Respondent

REASONS FOR JUDGMENT

Ex Tempore

1. MAY J: The husband appealed against orders made on 16 August 2005 by Le Poer Trench J, which were interlocutory in nature, and also orders made by the Judge on 11 April 2006. 

2. The appeal in relation to the interlocutory orders, which is numbered EA 98 of 2005, was filed on 21 September 2005 and the appeal from final orders, which is numbered EA 58 of 2006, was filed on 21 June 2006. We will refer to this appeal as the substantive appeal.

3. These appeals have a very complicated history and there have been numerous judgments and orders made by the Full Court and individual members of the Appeal Division. 

4. This is an application by the wife filed on 21 June 2006 for security for costs of the appeal. 

Background

1. It is necessary to refer in part to some of the background to this matter. On 27 October 2005 the Full Court heard an application by the wife that the husband's appeal be stayed and for security for costs. The history up to that date is provided in that judgment dated 27 March 2006 between paragraphs 6 and 38.  It is not necessary for us to repeat those facts and issues again. 

2. Other matters contained in the judgment relevant to this application for security for costs are in paragraphs 104-106 and paragraph 117. 

3. On 28 November 2006, Boland J heard an application by the husband to reinstate both appeals, which was allowed, and various orders were made ordering new dates for the preparation of the appeal. 

The Wife’s Application

1. As I have already said, the application of the wife is for security for costs.  It is contained in a response to an application in a case filed by the wife on 21 June 2006.  It responds to the husband's application, filed on 16 June 2006, asking that the time for the filing of the Notice of Appeal in relation to the order of 11 April 2006 be extended.  The order of Boland J of 28 November 2006 gave leave to reinstate the appeal and adjourned the application of the wife for security for costs, which was contained in that response.  It is that part of the application with which we now deal.

2. The wife asked for security for costs in the sum of $25,000, although it was not explained how this was quantified. 

3. The affidavit of Mr Paul, the solicitor for the wife, refers to various factual matters in support of the application. 

4. Mr Paul says the wife owes the solicitors the sum of $42,391.68 and the accountants, $7065.76. The bill from the accountants is attached to the affidavit. The solicitor, as I have said, simply asserts that the respondent’s costs of the appeal would be not less than $25,000. 

5. It is said that the husband apparently has no assets in Australia and therefore should an order for costs be made it would be difficult to recover those monies.

6. The affidavit of the wife, filed 28 July 2006, reveals her poor financial circumstances in that she now has a low income and has no monies, she says, in any bank account either in Australia or overseas of any significance. In the past, she says, monies provided to her have been used entirely for legal or accounting expenses in Australia and in Hong Kong.

7. Apart from the monies the wife owes to her accountants and lawyers, she explains that she has borrowed moneys from friends. In relation to the final orders made by Le Poer Trench J on 11 April 2006, it is understood that only parts of those orders have been effected, in particular in paragraph 4, the property at Hurstville has now been conveyed to the wife. That property, we understand, is valued in the order of $440,000 and some motor vehicles have been transferred. Otherwise there has not been compliance with many of the essential parts of that order, including the payment by the husband to the wife of what could only be described as substantial monies.

The husband’s response

1. The husband's response is that no order should be made by way of security for costs. His evidence, and to some extent the submissions (apart from the oral submissions we have been provided with today) are contained in an affidavit filed on 10 August 2006 from his solicitor, Hudson Lu. We have also been referred to a previous affidavit of the husband. The essential matters asserted in these affidavits are that the husband is aged 66, is retired and is no longer working. It is said that he has no income and lives on borrowings. The instructions to the solicitors are that the husband is in poor health and living in poor financial conditions and that the moneys in their trust account totalling $26,695.42 is from a friend in Japan.

2. The solicitor says that moneys are owing to counsel and others in relation to the appeal and it is his opinion that further costs will be incurred in the preparation of the appeal. Mr Lu's instructions are that there are orders from the High Court of Hong Kong arising from a failed application of the wife where she has been ordered to pay costs of the husband equivalent to about AU$6000. It is further instructed that there is a matter proceeding in Hong Kong where costs for a similar amount were ordered to the husband against the wife. 

3. Mr Lu refers to the orders of Le Poer Trench J and submits, and this has been otherwise emphasised, that the wife retains Australian assets that she received of approximately $220,000 in cash from a deposit at the Bank of China.  It is of course entirely controversial what the nature or the value of these parties assets are and their location although it must be emphasised for the purpose of this judgment that a finding was made by Le Poer Trench J based on expert evidence, both as to the identity and the value of the assets. 

4. If the assertions of the solicitor on the husband's behalf are correct, and those made by counsel today, the husband has no capacity to pay security for costs and thus he would not be able to pursue his appeal, it is submitted, should such an order be made. Of course this also would mean that the wife would not be able to recover her costs should such an order be made subsequently by this Court. 

Principles

1. The principles relating to security for cost are well established (see Luadaka (1998) FLC 92‑830). In this case the matters of significance in exercising the discretion to order costs are, in my view, as follows:

   1)     The respondent husband asserts that he has no means to satisfy an order for costs.

   2)     Each party has outstanding costs orders against the other in a number of Courts in Australia and Hong Kong. As I have already mentioned, the husband has obtained an order in Hong Kong that the wife pay to him costs in the sum of the equivalent of nearly AU$6000.  It is also said by the husband's solicitor that there is another costs order of similar quantity. There was no evidence provided to us, but counsel for the wife asserted that she had obtained a costs order against the husband in Hong Kong.

   3)     The prospect of success of these appeals is a difficult matter to assess, although in earlier judgments the appellant has been given leave. It cannot be said that there is a high probability of either failure or success. 

2. In my view, there are circumstances which would justify an order for security for costs in this case. Although such an order could place the appellant in a position where he has difficulty prosecuting the appeal, I am mindful of the history of this matter and that the husband has been able to meet costs orders in the past with a view to pursuing his appeal. It seems that after numerous directions and orders, and after so many years, the hearing of this appeal is now likely to proceed, and in those circumstances it is impossible to be satisfied that the husband would be deprived of an opportunity to pursue this appeal if an order, even of a modest sum, is made for an order for security for costs.

3. Of real importance, there does not seem to be any suggestion that there are any assets in the jurisdiction which could be available to meet an order for costs in favour of the wife. In those circumstances I would make an order that the husband pay as security for costs the sum of $5000.

4. COLEMAN J:  I agree with the course proposed by May J and I agree with her Honour's reasons for that course. I have nothing to add.

5. WARNICK J:  I also agree.

6. COLEMAN J:  The order of the Court will be that EA 98 of 2005 and EA 58 of 2006 be and are hereby dismissed unless within 60 days the appellant husband pay the sum of $5000 to the Family Court of Australia for the appropriate recipient of such moneys by way of security for the wife's costs of the said appeals.

7. COLEMAN J: We will make the further order that the costs of this application be costs in the appeal.

I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court May J, Coleman J, Warnick J.

Associate: 

Date:  7 March 2007