Farmer v Donald
[2024] NZHC 2308
•16 August 2024
NOTE: PURSUANT TO S 139 OF THE CARE OF CHILDREN ACT 2004, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B, 11C AND 11D OF THE FAMILY COURT ACT 1980. FOR FURTHER INFORMATION,
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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2023-404-3048
[2024] NZHC 2308
UNDER the Care of Children Act 2024 and
High Court Rules 2016, rr 20.4, 20.5, 20.6,
20.8 and 20.9BETWEEN
LEO FARMER
Appellant
AND
SARA DONALD
Respondent
Hearing: 23 July 2024 Appearances:
Appellant in person
K Jenkins for Respondent
Judgment:
16 August 2024
JUDGMENT OF WILKINSON-SMITH J
This judgment was delivered by me on 16/08/2024 at 1pm Pursuant to Rule 11.5 of the High Court Rules
…………………………
Registrar/Deputy Registrar
Solicitors:
McVeagh Fleming, Auckland Copy to Appellant
FARMER v DONALD [2024] NZHC 2308 [16 August 2024]
Introduction
[1] This is an appeal from an order for security for costs made in the Family Court in respect of Leo Farmer.1
[2] Mr Farmer is self-represented. The respondent Sara Donald is legally aided. The substantive proceedings relate to the parties’ daughter India aged 10 years.
[3] On 15 November 2023 Judge A J Fitzgerald made an order requiring Mr Farmer to pay security for costs in the sum of $34,809.75.2 Mr Farmer had 15 working days from the date of the judgment to pay the security for costs into court. Judge Fitzgerald ordered that if payment was not made within 15 working days the proceedings would be stayed until payment was made.
[4] Mr Farmer did not pay the order for security for costs within that period and appealed seeking:
(a)that the Court overturn the orders made by the Family Court Judge on 15 November 2023; and
(b)equal, unsupervised, shared care of India.
Background
[5] Mr Farmer and Ms Donald have been separated for many years. They have one daughter India. The proceedings between Mr Farmer and Ms Donald have a substantial history in which findings have been made in the Family Court of family violence by Mr Farmer against Ms Donald and also of safety concerns regarding India.
[6] On 28 April 2021 a temporary protection order was made against Mr Farmer in favour of Ms Donald. An interim parenting order providing for India to remain in Ms Donald’s day-to-day care and have supervised contact with Mr Farmer was made the same day.
1 This name and the names of others in this judgment are fictitious.
2 Farmer v Donald [2023] NZFC 12293 [Decision on appeal].
[7] On 17 December 2021 the temporary protection order was made final following a two-day defended hearing before Judge A M Manuel on 21 and 22 October 2021.3
[8] On 17 January 2022 Mr Farmer filed an appeal in the High Court in relation to the decision to make the final protection order against him in favour of Ms Donald. On 14 February 2022 this Court ordered Mr Farmer to file security for costs of
$2,390.00 in respect of the appeal.4 On 28 June 2022 Mr Farmer withdrew the appeal in respect of the final protection order by way of notice of discontinuance. This was filed two days prior to the scheduled hearing in the High Court.5
[9]On 4 March 2022 the Family Court made an order directing Mr Farmer to pay
$12,319.50 towards Ms Donald’s legal costs relating to the Family Court proceedings.
[10] A final parenting order was made on 7 June 2022 providing for India to remain in Ms Donald’s day-to-day care and for Mr Farmer to have supervised access.
[11] On 28 June 2022 Mr Farmer filed an application for the parenting matter between the parties to be reheard. On 24 August 2022 Mr Farmer’s application for rehearing of the parenting matter was struck out due to non-prosecution.
[12] On 6 October 2022 the High Court made an order directing Mr Farmer to pay further security for costs in the sum of $16,013.6 Mr Farmer has not complied with the orders for security for costs.
[13] Mr Farmer filed a further application to vary the final parenting order. That application was served on 18 July 2023. On 5 July 2023 Mr Farmer filed an application to discharge the final protection order. That application was also served on 18 July 2023. The Court consolidated the proceedings in respect of Mr Farmer’s applications.7 Ms Donald sought an order for security for costs on the basis that there
3 Donald v Farmer [2021] NZFC 12836 at [67].
4 Farmer v Donald HC Auckland CIV-2022-404-40, 14 February 2022 (Minute of Venning J).
5 Farmer v Donald HC Auckland CIV-2022-404-40, 28 June 2022 (Minute of Moore J).
6 Farmer v Donald [2022] NZHC 2582 at [16].
7 Donald v Farmer FC Auckland FAM-2021-004-361, 3 August 2023 (Minute of Judge G J Wagner) at [8].
was reason to believe Mr Farmer would be unable to pay Ms Donald’s costs if unsuccessful.
[14] On 3 September 2023 Mr Farmer filed a memorandum ahead of a directions conference stating that Ms Donald’s counsel was “grossly exaggerating” the value of the costs orders against him. He denied owing Ms Donald the amount ordered as security for costs.
[15] In seeking the further order for security for costs Ms Donald’s counsel submitted that it is not appropriate for further legal costs to be incurred in relation to Mr Farmer’s applications without Mr Farmer accepting responsibility in relation to the costs already outstanding in respect of the originating proceedings. Mr Farmer owes significant costs which remain unpaid and has not provided evidence in support of his applications despite being invited to do so at least twice by the Family Court.
[16] Ms Donald is legally aided. She privately funded the costs of the originating proceedings, appeal, and application for rehearing. Ms Donald has a prescribed repayment amount of $81,014.13 under her grant of legal aid. She is liable to repay the cost of her case up to that maximum amount. It was submitted on her behalf in the Family Court that it would not be reasonable for Ms Donald to be put to further expense in relation to these proceedings while Mr Farmer continues to avoid responsibility for the significant costs incurred to defend the applications he has made. Ms Donald’s position is that those applications are unmeritorious.
[17] Mr Farmer filed a document described as a Notice of Appeal on 14 December 2023. He subsequently filed an “updating memorandum appealing the in-chambers [judgment] of [Judge] Fitzgerald” dated 8 March 2024. The documents appear to be identical. Mr Farmer set out his grounds of appeal. They are:
(a)Ms Donald is legally aided, and it is very unreasonable to imply that she will be required to repay legal funding. Ms Donald has only been legally aided for less than four months.
(b)It is strange speculation on the part of Judge Fitzgerald that Mr Farmer would be ordered to repay Ms Donald’s legal aid costs should his three applications be unsuccessful. There is no guarantee of that, and it is not a necessity or foregone conclusion.
(c)The applications to vary the parenting orders once a change of material circumstances is proven and applications to discharge the two protection orders will be successful.
(d)Mr Farmer has already provided fair and sensible evidence of significant material change to the Family Court to date.
(e)The failure to provide evidence of financial position was because that was never requested by any Family Court judge, the lawyer for the child or opposition counsel. Further the financial information is not relevant and is a massive privacy breach.
(f)The decision to impose a stay was unjust, cynical, disingenuous, very speculative, and farfetched. Both decisions are incorrect and unjust.
(g)Mr Farmer is not a danger to his daughter. There is nothing to indicate that he is a bad parent and has ever been a danger to her. India does not feel that way and never has.
[18] Mr Farmer seeks an order setting aside the Family Court security for costs and stay decisions and he seeks unsupervised shared custody of India at his residence.
[19] On 29 May 2024 Mr Farmer filed an additional document described as a “memorandum disputing security for costs”.
[20] Following Mr Farmer filing the appeal Lang J issued a minute allocating a fixture date and making timetabling orders.8 Lang J also directed that Mr Farmer pay
8 Farmer v Donald HC Auckland CIV-2023-404-3048, 12 March 2024 (Minute of Lang J).
security for costs for the appeal in the sum of $2,390 no later than 12 May 2024.9 Mr Farmer was advised that his appeal would be deemed to be abandoned if he did not pay security by the directed date.
[21] Mr Farmer apparently made a request through the Registry for Lang J to reconsider that decision. In a minute dated 2 May 2024 Lang J declined to do so saying:10
[2] I have already made an order requiring [Mr Farmer] to pay security for costs. I decline to revisit that decision.
[3] The fact that the respondent is legally aided is not a relevant factor so far as security for costs is concerned. A legally aided respondent may still (and usually does) obtain an order for costs against the appellant if the appeal is not successful.
[22]Mr Farmer subsequently paid the security for costs in respect of this appeal.
The law
[23] Rule 207B of the Family Court Rules 2002 provides that rr 1.10 and 5.48 of the District Court Rules 2014 apply to matters in the Family Court. Rule 5.48 provides that the Court may order security for costs where there is reason to believe that a plaintiff will be unable to pay the costs of the defendant if the plaintiff is unsuccessful; and the Judge considers the order appropriate in all the circumstances.11
[24] A decision to order security for costs is a decision made in the exercise of a discretion. The criteria for a successful appeal against a decision made exercising a discretion are stricter than in a general appeal. In order to succeed an appellant must point to an error of law or principle or must establish that the Judge took into account irrelevant considerations or failed to take into account a relevant consideration, or that the decision is plainly wrong.12
9 At [4].
10 Farmer v Donald HC Auckland CIV-2023-404-3048, 2 May 2024 (Minute of Lang J).
11 Rule 5.48 of the District Court Rules 2014 is much the same as the equivalent r 5.45 of the High Court Rules 2016.
12 Kacem v Bachir [2010] NZSC 112, [2011] 2 NZLR 1 at [32].
[25] The decision of the Family Court regarding the custody and access of India is not a discretionary decision. That decision was a matter of assessment and judgment not discretion and gives rise to a general appeal. On a general appeal the appellate court considers the merits of the case afresh.
Security for costs
[26] In exercising the discretion to order security for costs the Court takes into account the interests of a defendant who is forced into litigation by the bringing of the claim and those of a plaintiff who may face hardship or even the inability to advance the case if an order for security is made that cannot be met.
[27] Whether to order security is a broad enquiry not to be constrained by reference to “principles”.13 It is relevant that an order for security for costs may prevent a plaintiff from proceeding. A genuine plaintiff is not lightly to be denied the opportunity to advance a claim.14 The amount of security is at the discretion of the court — balancing the interests of the plaintiff and defendant. It is not uncommon for the court to order a discounted amount somewhere between 50 per cent and 100 per cent of future estimated scale steps, plus an estimate of disbursements.15 An offer of a personal undertaking to pay by an individual can be a factor in whether an order for security is granted but such an undertaking cannot be compelled.
[28] A court is not bound to order a stay of proceedings pending security being provided but it is the normal course. Stays have been declined where the matter is so advanced as to make a stay inappropriate. The merit of the respective party’s cases is relevant to whether security should be ordered and to quantum, but it can be very difficult to ascertain the merits pre‑trial.16
13 A S McLachlan Ltd v MEL Network Ltd (2002) 16 PRNZ 747 (CA) at [13]–[14].
14 At [15].
15 David Bullock and Tim Mullins The Law of Costs in New Zealand (LexisNexis, Wellington, 2022) at [7.20].
16 Ambrose v Pickard [2009] NZCA 502; and Meates v Taylor (1992) 5 PRNZ 524 (CA).
The Family Court decision
[29] Judge Fitzgerald set out the procedural history noting that on 17 December 2021 her Honour Judge Manuel made a final protection order against Mr Farmer in favour of Ms Donald which also applied for the benefit of India.17 Judge Fitzgerald noted that an interim parenting order was also made under the Care of Children Act 2004 granting Ms Donald day-to-day care of India and reserving supervised contact to Mr Farmer. On 4 March 2022 Judge Manuel ordered Mr Farmer to pay Ms Donald costs of $12,319.50 in relation to those proceedings.
[30] Judge Fitzgerald set out that on 7 June 2022 his Honour Judge Burns made a final parenting order granting Ms Donald day-to-day care of India with supervised contact with Mr Farmer.18 It was noted that Mr Farmer filed an appeal in the High Court in relation to the final protection order made by Judge Manuel. That appeal was discontinued and on 6 October 2022 the High Court ordered Mr Farmer to pay costs of $16,013 to Ms Donald. Judge Fitzgerald noted that the proceedings before him were Mr Farmer’s applications to discharge the final protection order and to vary the final parenting order.19 Judge Fitzgerald said that Ms Donald applied for Mr Farmer to be ordered to provide security for costs primarily because he failed to pay the costs order referred to above. The amount outstanding was recorded as $28,332.50.20
[31] Judge Fitzgerald set out the rules applicable and said that the question of whether someone is unable to pay is essentially a factual question; there is no burden of proof or predisposition one way or another. The Judge recorded that the threshold of proof for making the order is less than the proof of inability to pay an award of costs. It is enough if the Court is satisfied that there is credible evidence from which it may reasonably be inferred that the plaintiff will be unable to pay any such order. The threshold for being unable to pay does not look only at a person’s financial ability to pay costs, but also whether the person is unwilling to pay costs.21
17 Decision on appeal, above n 2, at [3].
18 At [5].
19 At [6].
20 At [7].
21 At [9].
[32] Judge Fitzgerald said that once the threshold test is met the Court must make a discretionary decision as to whether to order security for costs. Common considerations include whether an order would prevent a party from bringing their case, the probable costs award at the end of the proceedings and the nature of the case.22
[33] Judge Fitzgerald set out the fact that Ms Donald is in receipt of legal aid in the current proceedings. His Honour set out the prescribed repayment amount under the grant of legal aid and said that the right to seek security for costs is preserved by s 116 of the Legal Services Act 2011.23
[34] Judge Fitzgerald said that if Mr Farmer is unsuccessful with his current application Ms Donald will be seeking increased and possibly indemnity costs based partly on the limited evidence provided by Mr Farmer to support his applications and also his abusive manner when dealing with counsel and the Court.24 The amount of security was based on a category 2B award being $9,741.00. Estimated costs were a further $13,465.50 making a total of $23,206.50. A 50 per cent increase on those 2B costs was sought to bring the total to $34,809.75.25
[35] Judge Fitzgerald found credible evidence that Mr Farmer will be unable to meet an award of costs against him. The Judge noted Mr Farmer has not provided specific information about his financial position. An email sent to the Court dated 6 November 2023 in response to the security for costs application is described by the Judge as “mostly just a vitriolic attack on [Ms Donald’s counsel]”. The Judge noted that it contains no useful information. In a letter to the Court dated 4 October 2023 Mr Farmer said he had sufficient income to support himself and India and live independently. On that basis Judge Fitzgerald said that it appears he has some means to pay however the fact that he has two outstanding costs orders against him totalling
$28,332.50 provide strong grounds for believing he is at least constitutionally unwilling to pay costs.26
22 At [10].
23 At [11].
24 At [12].
25 At [13].
26 At [14].
[36] Having made these observations Judge Fitzgerald was satisfied it was appropriate to order security for costs. This was because Mr Farmer has provided limited evidence in support of his applications. That has been pointed out to him twice and time has been provided to address the problem, but he has not done so. On the basis of the evidence currently on the file his applications have little prospect of success. His consistently aggressive, unfocused communication with the Court, and with professionals involved, also adds to the time taken unproductively with the proceedings. That in turn increases the costs involved. Judge Fitzgerald found that it is unreasonable for Ms Donald to face the potential burden of repaying substantial legal aid costs defending applications that are not being prosecuted in a diligent and composed fashion.27
[37] In respect of increased costs, Judge Fitzgerald referenced r 14.6(3)(b)(ii) of the District Court Rules which provides that increased costs may be awarded when a party has contributed unnecessarily to the time or expense of the proceeding, for example by pursuing an argument that lacks merit. His Honour found that based on Mr Farmer’s approach so far, grounds for awarding increased costs are very likely to be met. The amount sought for security for costs was described as appropriate in the circumstances of the case.
Discussion
[38] In oral submissions before me Mr Farmer was confused about the effect of the stay apparently believing it to apply to all of his proceedings before the Court. He said that the stay does not appear to be a genuine stay because one of his three applications, not relating to Ms Donald, was allowed to progress. I explained to Mr Farmer that the stay does not apply to proceedings other than those relating to Ms Donald. Mr Farmer referenced a blog article from a law firm which he relied on to make the submission that security for costs should not be ordered where that will result in a claimant having to discontinue proceedings. Mr Farmer is correct that this is a serious consideration when an order for security for costs is contemplated.
27 At [15].
[39] Mr Farmer submitted that he does not have the capability to pay anything close to the sum ordered as security for costs. He says he has no savings and no assets of any significant value. He owns a vehicle which needs work, and which is costing him money. Mr Farmer says that he feels the matter is a New Zealand Bill of Rights Act 1990 issue and that the requirement for supervised access amounts to torture and psychological abuse of himself and his daughter. He said that supervised visits are not a natural or normal environment and impede his daughter’s enjoyment of contact with him and their freedom of communication. Mr Farmer also said that it was cruel treatment and denied him freedom of association. Mr Farmer said that his understanding of legal aid was that it was highly unlikely Ms Donald would in fact have to repay legal aid. In respect of his purported failure to provide evidence to support his claims, Mr Farmer said that as a self-represented person he did not understand that evidence of a material change referred to any relevant change of circumstances. Rather he thought that it referred only to changes to his financial circumstances. Mr Farmer submitted that the decision was unjust.
[40] In approaching this appeal, I must consider whether there is any error in the approach taken by Judge Fitzgerald, whether Judge Fitzgerald took into account irrelevant matters or failed to take into account relevant matters or whether the decision to order security for costs was plainly wrong.
[41] Judge Fitzgerald correctly set out the law relating to the ability of the Court to make an order for security for costs. His Honour also correctly set out matters to be considered including whether there is reason to believe a plaintiff will be unable or unwilling to pay the costs of the defendant if unsuccessful. Judge Fitzgerald was correct to find that the failure to pay the earlier order for costs is a material consideration. So far as the lack of merit in the plaintiff’s substantive applications, Judge Fitzgerald was in a better position to assess that than this Court being a judge of a specialist jurisdiction, the Family Court and being familiar with the proceedings to date.
[42] Mr Farmer submits that the Judge failed to take account of the fact that Ms Donald is legally aided and would not in fact incur costs. Judge Fitzgerald did consider this argument and dismissed it correctly. In the decision Judge Fitzgerald set
out the section of the Legal Services Act which reserves the right of a defendant to apply for security for costs when legally aided. Judge Fitzgerald was clearly correct in finding that the threshold for making an order for costs is not simply inability to pay. The threshold will be met where the Court is satisfied there is credible evidence from which it may be reasonably inferred that the plaintiff will be unable or unwilling to pay an award of costs.28
[43] Once the threshold of impecuniosity or unwillingness to pay is met the Court has a broad discretion as to whether security for costs should be ordered.
[44] Mr Farmer is correct that where an order for security for costs would impede the ability of a plaintiff to bring a claim that can, in some situations, tell against such an order being made. However, it is not a complete answer. Security for costs will not be avoided where the effect would be to permit an impecunious appellant to advance an appeal that a solvent appellant would not advance. It should not facilitate a hopeless claim or a claim where the benefits are outweighed by the costs. In discussing dispensation for payment of security for costs the Supreme Court has said that where an appellant is acting in person but is unwilling to make an application for legal aid they are less likely to qualify for dispensation.29
[45] Mr Farmer told me that he was previously legally aided but has no faith in lawyers. He said that his previous applications for legal aid were always granted. If Mr Farmer were legally aided an order for security for costs would only be made in exceptional circumstances and would be limited to an amount that is reasonable in the circumstances including his means to pay and his conduct in the dispute. Legal aid encompasses a protection for plaintiffs against unmeritorious claims because legal aid will not be granted where there is no prospect of success. The prospect of a costs award provides a similar safeguard where a party is not legally aided. Mr Farmer is seeking to circumvent both safeguards and bring proceedings that, even if completely unmeritorious, will not result in his having to pay costs. If successful, he could use court proceedings to wear down the resources of Ms Donald without consequence.
28 Highgate on Broadway Ltd v Devine [2012] NZHC 2288, [2013] NZAR 1017 at [7].
29 Reekie v Attorney-General [2014] NZSC 63, [2014] 1 NZLR 737 at [38].
[46] Where a plaintiff brings a strong claim, the merits may mean that an order for security for costs should not be made if the order will likely put an end to the proceeding. The issue for Mr Farmer however is that Judge Fitzgerald made a finding that the merits of the claim are not strong particularly in circumstances where Mr Farmer has failed to provide supporting evidence.
[47] The matters that Mr Farmer raises on appeal are matters that were considered by Judge Fitzgerald. I can find no error in the approach taken by Judge Fitzgerald. There was some additional information of inability to pay given to the Court by Mr Farmer in submission. That simply reinforces the concern that Mr Farmer seeks to force Ms Donald into litigation which has little prospect of success in circumstances where he will not be able to pay costs if he is unsuccessful.
Stay of proceedings
[48] Once a court determines it is appropriate to order security for costs r 5.48(3)(b) of the District Court Rules gives the Family Court power to stay the proceedings until the sum is paid. That is what occurred in this case.
[49] Mr Farmer says that the proceedings are a matter of public interest and should not be stayed. I cannot agree with that. The issues raised are intrinsically personal to the parties involved. The Court’s decision to stay the proceedings in circumstances where Mr Farmer has not paid previous costs orders is reasonable and appropriate. By bringing these proceedings Mr Farmer is exposing Ms Donald to liability for significant costs. His claims do not appear to be being prosecuted in a diligent or responsible manner. Mr Farmer persists in claiming that security for costs is inappropriate because Ms Donald is legally aided. That is not a correct ground to refuse an order for security for costs. This was set out in the decision of Judge Fitzgerald and further addressed by Lang J in the minute dated 2 May 2024.30
[50] In Peart v Chandra, the High Court discussed the effect of a party receiving legal aid on cost awards:31
30 Decision on appeal, above n 2, at [11]; and Farmer v Donald, above n 9, at [3].
31 Peart v Chandra [2022] NZHC 665 at [9].
I consider that the plaintiff is entitled to costs in accordance with the usual principles. There is no issue with the plaintiff receiving an award of costs on the basis that she is legally aided. The plaintiff's counsel will have received payment from the Legal Services Commissioner. The plaintiff will then be required to repay an amount to the Legal Services Commissioner. There is no concern that the plaintiff will be paid twice. Nor should her entitlement to costs be reduced merely because she is legally aided.
(footnote omitted)
[51] As I explained to Mr Farmer at the hearing, liability to an award of costs is a natural consequence of bringing proceedings. A plaintiff forces a defendant to engage and incur costs defending the claim. Where there is a real concern about a plaintiff’s ability to meet a costs award coupled with a lack of apparent merit in the claim, an order for security for costs is unremarkable. Judge Fitzgerald took into account all appropriate matters and the decision to make the order for security for costs was one that was entirely open to the Judge. It was equally open to the Judge to stay the proceedings until the security for costs is paid. If the proceedings are not stayed pending payment the order for security is rendered largely nugatory.
The request for equal shared care
[52] As part of this appeal Mr Farmer sought an order that this Court overturn the parenting order made on 7 June 2022 in the Family Court. Mr Farmer requests that this Court award him equal unsupervised shared care of India. Ms Donald’s counsel submits that such an application is unable to be addressed in the context of an appeal against orders for security for costs and a stay of proceedings. Any decision relating to the ongoing care and contact arrangement for India would require input from counsel for the child. Further Mr Farmer would need to provide evidence to the Court to support his claim that there has been a material change in circumstances as required by s 139A of the Care of Children Act.
[53] I agree that it would be inappropriate for this Court to consider the application to vary the parenting order in the context of this appeal. That application has not been the subject of any Family Court decision. That application is stayed pending payment of the security for costs.
Result
[54]The appeal is dismissed.
Costs
[55]As the appeal has been unsuccessful, Ms Donald is entitled to costs.
[56] Ms Donald is legally aided. A successful legally aided party is entitled to the full sum of the legal aid grant, provided this is the same or less than the appropriate costs award calculated on a scale basis.32
[57] If the parties can agree on costs, I order that the sum of $2,390.00 paid into Court by way of security for costs on this appeal be released by the Registrar to Ms Donald in partial satisfaction of that liability.
[58] However, in case Ms Donald wishes to seek costs on some other basis, or the parties are unable to agree, I reserve leave to the parties to file memoranda of no more than three pages.
Wilkinson-Smith J
32 Fa'agutu v Derhamy [2020] NZHC 1374 at [21].
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