Bandrey & Woldore [2013] FamCAFC 208; (16 December 2013)

Last Updated: 8 January 2014

FAMILY COURT OF AUSTRALIA

BANDREY & WOLDORE

[2013] FamCAFC 208

FAMILY LAW – APPEAL – SECURITY FOR COSTS – where the respondent in the appeal seeks security for costs – where counsel for the applicant says that the application should succeed because the appeal has limited prospects of success and there is an unpaid costs order – where the respondent is not in a position to meet any order for security for costs – where the appeal is not devoid of all merit – where an order for security for costs will stifle the appeal – where the application for security for costs was filed some seven months after the Notice of Appeal – where the appeal is listed to commence on 17 December 2013 and would have to be adjourned if the security for costs application was successful – application dismissed. FAMILY LAW – APPEAL – COSTS – where the respondent seeks his costs of and incidental to the application – where the respondent submits that the costs of the application should be costs in the cause – costs be costs in the cause.

Family Law Act 1975 (Cth) s 117
Family Law Rules 2004 (Cth) r 19.05(2)


Emmett & Emmett [2011] FamCAFC 213
Jones and Jones [2001] FamCA 460; (2001) FLC 93-080
Sawer & Sawer [2007] FamCA 140

APPLICANT:

Ms Bandrey

RESPONDENT:

Mr Woldore

FILE NUMBER:

SOA

23

of

2013

APPEAL NUMBER:

LNC

611

of

2009

DATE DELIVERED:

16 December 2013

PLACE DELIVERED:

Adelaide

PLACE HEARD:

Adelaide

JUDGMENT OF:

Strickland J

HEARING DATE:

16 December 2013

LOWER COURT JURISDICTION:

Federal Circuit Court

LOWER COURT JUDGMENT DATE:

26 March 2013

LOWER COURT MNC:

[2013] FCCA 237

REPRESENTATION

COUNSEL FOR THE APPLICANT:	Mr Welch
SOLICITOR FOR THE APPLICANT:	McVeity & Associates

COUNSEL FOR THE RESPONDENT:

Mr Kitto

SOLICITOR FOR THE RESPONDENT:

James Kitto

IT IS ORDERED:

(1) The Application in an Appeal filed by Ms Bandrey on 11 November 2013 be dismissed.
(2) The costs of and incidental to the Application in an Appeal filed on
11 November 2013 be costs in the cause.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Bandrey & Woldore has been approved by the Chief Justice pursuant to
s 121(9)(g) of the Family Law Act 1975 (Cth).

IN THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT ADELAIDE

Appeal Number: SOA 23 of 2013
File Number: LNC 611 of 2009

Ms Bandrey

Applicant

And

Mr Woldore

Respondent

EX TEMPORE REASONS FOR JUDGMENT

1. The application before me today is the application in an appeal filed on
   11 November 2013 by the respondent to the appeal seeking that the appellant in the appeal pay within 28 days the sum of $10,461, or such other sum as the court deems fit, by way of security for the respondent’s costs of and incidental to the Notice of Appeal filed by the appellant in the appeal on 23 April 2013. A further order is sought that in the event the appellant in the appeal does not make payment pursuant to that order sought, then the Notice of Appeal filed on 23 April 2013 be dismissed.
2. That application is supported by an affidavit of the applicant also filed on
   11 November 2013.
3. The respondent to the application filed a response on 12 December 2013 seeking that the application for security for costs be dismissed, and seeking an order for costs of and incidental to the response. That is supported by an affidavit of the respondent also filed on 12 December 2013.
4. In relation to the application Mr Welch for the applicant has taken me to the relevant authorities and the relevant sections of the Family Law Act 1976 (Cth) (“the “Act”), and the relevant rules of the Family Law Rules 2004 (Cth) (“the Rules”).
5. The principles governing an application for security for costs are well settled. For example the Full Court said this in Sawer & Sawer [2007] FamCA 140:
   19. The power in this Court to make an order for security for costs is to be found in s 117(2) of the Act, which is in the following terms:

If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.

20. The provisions of s 117(2A) are as follows (s 117(4) and (5) are not presently relevant):

In considering what order (if any) should be made under subsection (2), the court shall have regard to:

(a) the financial circumstances of each of the parties to the proceedings;

(b) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;

(c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;

(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;

(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;

(f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and

(g) such other matters as the court considers relevant.

21. The authorities establish that in exercising the discretion to order security for costs, it may also be relevant for the Court to consider in addition to the financial circumstances of the parties and the other five specific matters mentioned in s 117(2A), the following matters:

a) the prospect of success of the litigation;

b) whether the claim for security is made bona fide;

100. whether or not an order for security would stifle the litigation;

4. whether or not the litigation may involve a matter of public importance;
5. whether or not there has been a delay in bringing the application for security;
6. whether there would be difficulty in enforcing an order for costs

(Luadaka v Luadaka [1998] FamCA 1520; (1998) FLC 92-830; Jones and Jones [2001] FamCA 460; (2001) FLC 93-080.)

6. Mr Welch has conveniently taken me through Rule 19.05(2) of the Rules which it is accepted largely mirrors the factors which have been established by the relevant authorities, including those to which I have already referred.
7. Mr Welch’s initial submission is that the respondent has failed to provide sufficient financial information in his affidavit for this court to be satisfied that he is unable to meet an order for costs. It is common ground that there is financial information in the affidavit filed by Mr Woldore, but Mr Welch’s point is that it only relates to the appellant’s lack of income and does not address any assets that he may have.
8. In terms of the effect of impecuniosity, Mr Welch has also appropriately referred me to the cases of Emmett & Emmett [2011] FamCAFC 213 and Jones where the Full Court confirmed that a court is more disposed to grant security for costs in an appeal, even where the respondent to the application is impecunious. Mr Welch’s submission, with which I agree, is that it is not as simple as a party saying that they cannot pay any order for costs, and thus no order for security for costs should be made.
9. The next topic addressed by Mr Welch was the merits of the appeal, and of course, as I corrected Mr Welch, it is the appeal against the orders for costs which is the relevant appeal to look at in terms of making some assessment of the merits. Mr Welch’s submission is that, and these are my words, the appellant has little chance of success, and Mr Welch described his case as weak, if not bound to fail.
10. The next relevant issue is the question of whether the making of an order for security for costs will stifle the appeal. Mr Welch conceded that it may do so depending upon the view taken of the impecuniosity, or otherwise, of the respondent.
11. Mr Welch then highlighted the fact that there is certainly one order for costs that has previously been made which is unpaid by the respondent. That is in fact addressed in the respondent’s affidavit, and it is conceded.
12. The question of delay in bringing the application is a relevant issue which
    Mr Welch addressed, and that is a matter which the respondent himself has raised in his affidavit in support of his application to dismiss the application for security for costs.
13. Mr Welch also referred to the likely costs of the appeal, and that is another relevant factor. I challenged Mr Welch as to the estimated costs that are set out in his client’s affidavit, but whether they are $10,000, or $5,000, or some other figure, the fact of the matter is that there will be significant costs incurred by the respondent to the appeal if the appeal is allowed to proceed at this stage, without any security for costs being ordered.
14. In summary, Mr Welch said that the application should succeed because of, and using his words, the limited prospects of success in the appeal, and the unpaid costs order.
15. As for the respondent, to repeat, he filed a response and an affidavit. In my view the affidavit contains some irrelevant material as well as irrelevant annexures, and I have challenged Mr Kitto about that and referred him specifically to the concerns that I have, but I do not propose to take that any further.
16. It seems to me that the most relevant factors in relation to this application are the financial circumstances of the respondent to the application, the merits of the respondent’s appeal, the fact there is an unpaid costs order, and the question of delay in bringing the application for security for costs. I also mention that the issue of whether the appeal would be stifled if the application is granted is also highly relevant, but as referred to above, that is really dependent on the issue of impecuniosity, as well as the merits of the appeal.
17. In terms of the financial circumstances of the respondent, I am satisfied that he is not in a position to meet any order for security for costs. That of course is a two-edged sword, as the primary reason for making an order for security for costs is not to provide for the costs of the applicant in opposing the appeal, but to cover the circumstance that if the appeal is unsuccessful, and if there is an order for costs as a result, then if the appellant is unable to pay that order for costs the respondent to the appeal is severely prejudiced.
18. As for the merits of the appeal, I am not satisfied that the appeal is devoid of all merit. I am perhaps better placed than I might otherwise be in making some assessment of the merits of the appeal because the appeal is indeed listed for hearing tomorrow, and it is ready to proceed. The summaries of argument have been filed, as have lists of authorities, the transcript has been provided and although in these appeals an appeal book is not required, the relevant documents have been identified in the appeal index. I am not in a position to make a definitive assessment of the success or otherwise of the appeal because of course I will need to, if the appeal is to proceed, hear oral argument, and that can sometimes, and usually does, have a significant bearing upon the outcome of an appeal. However, as I say, I am not satisfied on the material before me that the appeal is devoid of all merit.
19. That brings in the factor that I have indicated is also highly relevant namely, whether the appeal would be stifled. If the appeal is not devoid of merit, and if Mr Woldore is as I have found not in a position to pay an order for security for costs, to make an order for security will certainly stifle the appeal.
20. I am concerned about the fact of there being an unpaid costs order. I am less than impressed with what the respondent says about that in his affidavit. In paragraph 8 he confirms that there is an order for costs, he says that he has not paid it, and then he says “that apart from the above, I have always complied with Court Orders”. I do not know how that avoids the consequence of the fact of there being an unpaid costs order. It is an order of the court and it has to be complied with. However, that cannot be a basis for ordering security given the other factors in play.
21. I mentioned delay as a relevant and important factor and that equally concerns me. The judgment of his Honour was delivered on 26 March 2013, the appeal was filed on 23 April 2013, and the draft appeal index was filed on 21 May 2013. Thus the appellant complied with the relevant time frames to get the appeal up and running. Yet, it is only on 11 November 2013, some seven months or thereabouts after the Notice of Appeal was filed, that the application for security for costs was filed. Because of that late filing it has not been able to be listed before today, today being the day before the hearing of the appeal, yet the applicant still chose to proceed with the application, knowing that if the application is successful then the appeal simply could not be heard tomorrow and would have to be adjourned. That would not only affect this court and its listings, but would affect both parties, including the applicant. The fact of the matter is the appeal is ready to be heard, and frankly it should be. I am bemused by the applicant still wishing to pursue the application in those circumstances.
22. For those reasons, and in particular my finding that the granting of this application would stifle the appeal, the appeal not being devoid of merit, and the delay in filing the application, and the circumstances now confronting this court and the parties in that the appeal is listed tomorrow and ready to proceed, I propose to dismiss the application.
23. I now have an application for costs by the respondent of and incidental to the application. Mr Kitto has submitted that the costs of this application should be costs in the cause, and I agree with that.

I certify that the preceding twenty-three (23) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered on
16 December 2013.

Associate:

Date: 20 December 2013