FEDERAL COURT OF AUSTRALIA

BLG23 v BLH23, in the matter of BLG23 [2023] FCA 572

File number(s):

NSD 1121 of 2022

Judgment of:

GOODMAN J

Date of judgment:

2 June 2023

Catchwords:

PRACTICE AND PROCEDURE – security for costs of appeal – real risk that the respondent would be unable to recover costs against the appellant – long history of unpaid costs orders – prospects of success not significant – orders made for the provision of security

PRACTICE AND PROCEDURE – application by a third party for leave to intervene in the appeal – application refused

Legislation:

Bankruptcy Act 1966 (Cth), ss 24, 27, 40, 54

Family Law Act (1975) (Cth), ss 102QB, 117

Federal Court of Australia Act 1976 (Cth), ss 24(1)(d), 27, 56

Judiciary Act 1903 (Cth), s 40

Federal Court Rules 2011 (Cth), rr 9.12, 36.32

Federal Circuit and Family Court of Australia (Division 2) (Bankruptcy) Rules 2021 (Cth)

Bankruptcy Regulations 2021 (Cth)

Strata Schemes Management Act 2015 (NSW)

Cases cited:

Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; (1981) 148 CLR 170

Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd [2012] FCAFC 62

Bell Wholesale Co Ltd v Gates Export Corp (1984) 2 FCR 1

D v P [2020] NSWCA 174

Du Bray v ACW [2020] FCA 1680

Dye v Commonwealth Securities Ltd [2012] FCA 992

Goo v Kim [2022] FCA 1562

Hancock Prospecting Pty Ltd v Rinehart [2017] FCAFC 170; (2017) 257 FCR 442

House v King [1936] HCA 40; (1936) 55 CLR 499

Hua Wang Bank Berhad v Commissioner of Taxation [2013] FCAFC 28; (2013) 296 ALR 479

Jones v Southall & Bourke Pty Ltd [2004] FCA 539

Kordovoulos v Dixon-Hughes [2022] NSWCA 322

Lacey v Attorney General (Qld) [2011] HCA 10; (2011) 242 CLR 573

Live Board Holdings Ltd v Cody Live Pty Ltd [2017] NSWCA 302

Mariconte v Nobarani [2020] FCA 1485

Massalski & Riley (No 3) [2022] FedCFamC1F 562

Massalski & Riley (No 4) [2022] FedCFamC1F 832

Massalski & Riley (No 6) [2022] FedCFamC1F 1029

Massalski & Riley (No 7) [2023] FedCFamC1F 128

Massalski & Riley [2019] FamCA 1013

Massalski & Riley [2021] FamCAFC 116

Massalski & Riley [2022] FedCFamC1F 36; (2022) 65 Fam LR 73

Massalski & Riley [2022] FedCFamC1F 835

Massalski (No 2) [2022] FedCFamC1A 167

Massalski v Riley (No 2) [2021] FamCAFC 152

Massalski v The Owners SP 90255 [2023] NSWSC 23

Mohareb v Harbour Radio Pty Ltd [2020] NSWCA 231

Nobarani v Mariconte [2021] FCAFC 96

Nyoni v Pharmacy Board of Australia [2018] FCA 1313

Riley & Massalski [2020] FamCA 389

Roadshow Films v iiNet Ltd [2011] HCA 54; (2011) 248 CLR 37

Sandell v Porter (1966) 115 CLR 666

Stuart v State of South Australia (Oodnadatta Common Overlap Proceeding) (No 2) [2021] FCA 194

Tait v Bindal People [2002] FCA 322

WAJR v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 106; (2004) 204 ALR 624

Ward v Westpac Banking Corp Ltd [2023] NSWCA 11

Division:

General Division

Registry:

New South Wales

National Practice Area:

Commercial and Corporations

Sub-area:

General and Personal Insolvency

Number of paragraphs:

119

Date of hearing:

8 May 2023

Counsel for the Applicant:

Applicant appeared in person

Counsel for the First Respondent:

Mr G McDonald

Solicitor for the First Respondent:

Byrnes Legal

Solicitor for the Second Respondent:

Mr D Vosnakis of Roser Lawyers

Counsel for the Proposed Intervener:

Appeared in person

ORDERS

NSD 1121 of 2022

IN THE MATTER OF BLG23

BETWEEN:

BLG23

Appellant

AND:

BLH23

First Respondent

ANDREW JAMES BARNDEN AS TRUSTEE OF THE BANKRUPT ESTATE OF BLG23

Second Respondent

order made by:

GOODMAN J

DATE OF ORDER:

2 June 2023

THE COURT ORDERS THAT:

1.    Until further order:

(a)    the appellant be referred to as BLG23;

(b)    the first respondent be referred to as BLH23; and

(c)    the proposed intervener be referred to as BLI23.

2.    Within 21 days of the date of this Order, the appellant give security for the first respondent’s costs of the appeal in the sum of $30,000 to be provided by payment into Court in this proceeding pursuant to r 2.42 of the Federal Court Rules 2011 (Cth).

3.    The appeal be stayed until the security for costs has been provided by the appellant pursuant to Order 2.

4.    The costs of the first respondent’s interlocutory application filed 17 February 2023 be costs of the appeal.

5.    BLI23’s interlocutory application filed 20 March 2023 be dismissed.

6.    The proceeding be listed for a case management hearing at 9:30am on 30 June 2023.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

A. INTRODUCTION

[1]

B. BACKGROUND

[7]

Salient facts

[7]

BLG23’s evidence

[61]

C. THE SECURITY FOR COSTS APPLICATION

[65]

The discretion

[66]

Factors informing the exercise of the discretion

[68]

(1) Prospects of success on the appeal

[68]

(2) The risk that a costs order in favour of BLH23 against BLG23 would not be satisfied

[79]

(3) The cause of BLG23’s impecuniosity

[84]

(4) Potential stultification of the appeal

[85]

(5) Does BLH23 already hold security?

[86]

(6) Is the application for security actuated by improper purposes?

[87]

(7) BLG23’s status as a natural person

[89]

(8) The nature of the proceeding

[90]

(9) Other factors

[91]

Conclusion as to the exercise of the discretion

[92]

Quantum of the order for the provision of security for costs

[94]

D. THE APPLICATION FOR LEAVE TO INTERVENE

[103]

Introduction

[103]

The solvency issue

[118]

Effect of the appeal upon BLI23’s rights in the remaining Victorian Supreme Court proceeding

[118]

Conclusion

[118]

E. CONCLUSION

[120]

REASONS FOR JUDGMENT

GOODMAN J

A. INTRODUCTION

1    In these reasons, it is necessary to give an account of various matters that occurred in the course of various proceedings in the Family Court of Australia. The effect of s 121 of the Family Law Act 1975 (Cth) is to prohibit (subject to certain exceptions) the publishing any account of, or any part of, any proceeding under the Family Law Act that identifies (relevantly) a party to, or a witness in, such a proceeding.

2    As a result, I have taken the precaution of: (1) preparing these reasons in a manner that will not identify the participants in the Family Court proceeding; and (2) making an order that in this proceeding and until further order the appellant be referred to as BLG23, the first respondent as BLH23 and the proposed third party intervener as BLI23.

3    In December 2022, a judge of the Federal Circuit and Family Court of Australia (Division 2) (primary judge) made a sequestration order against the estate of the appellant, BLG23 and published reasons for judgment (J). His Honour did so on the application of the first respondent, BLH23. The second respondent, Mr Andrew Barnden, was appointed as the trustee of BLG23s bankrupt estate.

4    BLG23 has filed an appeal against the sequestration order.

5    These reasons for judgment deal with two interlocutory applications on the appeal: an application by BLH23 for an order that BLG23 provide security for BLH23s costs of the appeal in the sum of $30,000; and an application by a third party, BLI23, for leave pursuant to r 9.12 of the Federal Court Rules 2011 (Cth) to intervene in the appeal.

6    For the reasons set out below, BLG23 should provide security for BLH23s costs of the appeal in the sum of $30,000; and BLI23s application should be refused.

B. BACKGROUND

Salient facts

7    The history, and in particular the litigious history, between BLG23, BLH23 and BLI23 is extensive and the subject of many judgments in various courts and tribunals. The following findings of fact include a summary of that history only in so far as it is relevant to the issues raised on the present applications. The findings set out below are taken from the affidavits of BLH23’s solicitor, Mr Byrnes, made on 15 February and 27 March 2023; the affidavits of BLG23 made on 22 March and 26 April 2023; the affidavit of BLI23 affirmed on 6 March 2023; and various judgments.

8    In 1982, BLG23 married BLI23. They separated in 2002. Subsequently, BLG23 and BLH23 formed a relationship which involved cohabitation from early 2009. Early in their relationship they purchased a property at Ettalong Beach, as tenants in common in equal shares. They caused two units (Lots 1 and 2) to be built on the property.

9    The relationship between BLG23 and BLH23 broke down in 2012. Between 2014 and 2017, BLG23 and BLH23 were involved in various proceedings in the Local Court of New South Wales and the District Court of New South Wales concerning domestic violence orders. A consequence of those proceedings was that BLG23 was ordered to pay BLH23’s costs in an amount which exceeded $60,000 (DVO Costs Orders).

10    BLG23 made a series of applications in the Court of Appeal of the Supreme Court of New South Wales arising out of the orders made by the Local and District Courts concerning domestic violence orders. The Court of Appeal made various costs orders against BLG23 (NSWCA Costs Orders).

11    On 30 January 2015, BLG23 commenced a proceeding in the (then named) Family Court of Australia against BLH23 for a property adjustment order. In 2017, part of a proceeding which BLG23 had commenced against BLH23 and BLI23 in the Supreme Court of Victoria in 2016 was cross-vested to the Family Court and heard as part of the same Family Court proceeding. I will refer to that part of the Victorian Supreme Court proceeding that was cross-vested to the Family Court as the transferred Victorian Supreme Court proceeding; and the balance of that proceeding as the remaining Victorian Supreme Court proceeding.

12    On 19 November 2019, judgment was entered in the District Court of New South Wales in favour of BLH23 against BLG23 for $184,166.25 with respect to the NSWCA Costs Orders. Subsequently, BLG23’s salary was the subject of a garnishee order. Pursuant to that order, BLH23 recovered all of the costs due under the DVO Costs Orders and all but $67,638.33 of the $184,166.25 due under the 19 November 2019 District Court judgment.

13    On 24 December 2019, Deputy Chief Justice McClelland made final orders in the Family Court proceeding (Final Family Court Orders): Massalski & Riley [2019] FamCA 1013. Those orders included that: BLG23 and BLH23 were to “expeditiously do all acts and things and sign all documents required to complete the registration of the proposed strata plan and associated dealings concerning the property; BLG23 was to receive the title to Lot 1; the mortgage secured over Lot 1 was to be discharged, but secured over Lot 2; and BLH23 was to receive the title to Lot 2.

14    On 12 February 2020, the Family Court made consent orders which envisaged the registration of the strata plan and the potential sale of Lot 2.

15    On 25 May 2020, Deputy Chief Justice McClelland delivered a costs judgment: Riley & Massalski [2020] FamCA 389. His Honour ordered that BLG23 pay, within 28 days of agreement or assessment, BLH23’s costs of the Family Court proceeding, including the costs of the transferred Victorian Supreme Court proceeding. On 2 November 2020, the costs of the Family Court proceeding, save with respect to the transferred Victorian Supreme Court proceeding, were assessed at $209,945.25, by Registrar Chayna in the Family Court and an order was made requiring payment by 29 January 2021.

16    In March 2021, a judge of the Supreme Court of New South Wales made orders including an order for the dismissal of an application by BLG23 to file an Amended Statement of Claim and an order that BLG23 pay BLH23’s costs of that application.

17    On 16 May 2021, a strata plan for Lots 1 and 2 was registered and on 29 May 2021, Lot 2 was transferred to BLH23.

18    On 27 May 2021, BLG23 filed an application in the Family Court seeking a range of relief, including a stay of the Final Family Court orders and orders restraining the sale of Lot 2.

19    On 13 July 2021, the Full Court of the Family Court made orders dismissing BLG23’s appeal from the Final Family Court Orders: Massalski & Riley [2021] FamCAFC 116 (Ryan, Aldridge & Watts JJ).

20    On 10 August 2021, BLG23 filed an application in the Family Court seeking, inter alia, to set aside the Final Family Court Orders on bases including: a failure by BLH23 to provide full financial disclosure; that Lot 1 did not meet the definition of an “asset” for the purposes of a property settlement; and a default by BLH23 on consent orders made in proceedings between BLH23 and BLI23 in the Supreme Court of Victoria.

21    On 19 August 2021, the Full Court of the Family Court ordered that BLG23 pay BLH23s costs of the appeal determined on 13 July 2021, with such costs fixed at $30,000 and to be paid within 28 days: Massalski v Riley (No 2) [2021] FamCAFC 152.

22    On 12 October 2021, Bankruptcy Notice BN254429 was issued at the request of BLH23, and on 22 October 2021, BLH23 caused the Bankruptcy Notice to be served on BLG23. The Bankruptcy Notice demanded that BLG23 pay to BLH23 $30,000 owing pursuant to the 19 August 2021 costs order.

23    On 9 November 2021, the sale of Lot 2 was completed.

24    On 3 December 2021, BLG23 filed a further application in the Family Court by which she sought various orders including orders for the termination of the strata plan and for the joinder of the purchasers of Lot 2 to the Family Court proceeding.

25    On 20 December 2021, the costs ordered on 25 May 2020 with respect to the transferred Victorian Supreme Court proceeding (see [11] and [15] above) were assessed in the sum of $39,882.78 and an order was made requiring payment of such costs.

26    On or about 21 December 2021, BLG23 accepted a redundancy offer from her then employer and received a payment of approximately $130,000. The garnishee order then in place became ineffective, being a garnishee of BLG23’s salary.

27    On 4 February 2022, Justice Harper in the Family Court (which had by then become known as the Federal Circuit and Family Court of Australia (Division 1) but which for convenience I will continue to refer to in these reasons for judgment as the Family Court) made a series of orders, including orders:

(1)    providing for the dismissal of the applications filed by BLG23 on 27 May 2021 (see [18] above), 10 August 2021 (see [20] above) and 3 December 2021 (see [24] above); together with an order granting leave to make submissions with respect to the costs of those applications;

(2)    that all moneys that were required to be paid by BLG23 to BLH23, pursuant to costs orders made by the Family Court, Full Court of the Family Court or by the Federal Circuit and Family Court of Australia (Division 1), whether made before or after the date of the order, be charged against BLG23’s interest in Lot 1 (charging order); and

(3)    that no party was to file any further applications in the Family Court proceeding without prior leave of the Court.

28    His Honours reasons for doing so were published as Massalski & Riley [2022] FedCFamC1F 36; (2022) 65 Fam LR 73.

29    In February 2022, a judge of the District Court of New South Wales made orders dismissing a proceeding brought in that Court by BLG23 against BLH23 and his solicitor, Mr Byrnes, with costs. In March 2022, her Honour ordered that BLG23 pay BLH23’s costs of that proceeding on an indemnity basis.

30    On 2 March 2022, BLG23 filed an appeal against the orders made by Justice Harper on 4 February 2022. BLH23 then filed an application for an order that BLG23 provide security for BLH23s costs of that appeal.

31    In April 2022, an Associate Justice of the Supreme Court of Victoria dismissed an application by BLG23 to be joined to the remaining Victorian Supreme Court proceeding and ordered that BLG23 pay BLH23’s costs of that application.

32    On 19 April 2022, Appeal Judicial Registrar Cameron in the Family Court ordered that BLG23 provide security for the costs of her appeal from Justice Harper’s 4 February 2022 decision, in the sum of $30,000 by 17 May 2022, failing which the appeal would be stayed. BLG23 did not provide the security for costs as ordered and on 20 June 2022, Appeal Judicial Registrar Cameron made orders dismissing her appeal from Justice Harper’s 4 February decision. The learned Judicial Registrar also ordered that BLG23 pay BLH23’s costs, fixed in the sum of $7,000, by 18 July 2022.

33    In June 2022, a judge of the District Court of New South Wales dismissed an application by BLG23 to set aside the orders made in February and March 2022 (see [29] above) and ordered BLG23 to pay the costs of that application.

34    In July 2022, an order was made in the Federal Circuit and Family Court of Australia (Division 2) extending until 15 July 2022 the time for BLG23 to satisfy the Bankruptcy Notice.

35    Later in July 2022, Judge Manousaridis in the Federal Circuit and Family Court of Australia (Division 2) dismissed BLG23’s application to set aside the Bankruptcy Notice and ordered that she pay BLH23’s costs of that application.

36    On 19 July 2022, BLG23 filed an application in the Family Court seeking a review of the orders made by Appeal Judicial Registrar Cameron on 19 April 2022 and 20 June 2022.

37    On 4 August 2022, BLH23 presented a creditor’s petition seeking a sequestration order against BLG23’s estate on the ground that she had failed to comply by 15 July 2022 with the Bankruptcy Notice. In the creditor’s petition, rather than relying upon the debt described in the Bankruptcy Notice, BLH23 relied upon an unpaid balance of $67,638.33 from the 19 November 2019 District Court of New South Wales judgment.

38    On 5 August 2022, Justice Harper in the Family Court made a series of orders: Massalski & Riley (No 3) [2022] FedCFamC1F 562 and in particular orders:

(1)    pursuant to s 102QB(2)(a) of the Family Law Act (1975) (Cth) dismissing all extant applications instituted by BLG23 in the Family Court;

(2)    pursuant to s 102QB(2)(b) of the Family Law Act prohibiting BLG23 from instituting a proceeding in any court having jurisdiction under the Family Law Act, in relation to BLH23, without first having been granted leave to commence that proceeding pursuant to s 102QE of the Family Law Act (vexatious litigant order);

(3)    an order appointing a receiver of the income and property of BLG23 (and in particular her bank accounts and Lot 1) so as to give effect to:

(a)    the orders requiring BLG23 to pay BLH23:

(i)    $209,945.25 per the order made on 25 May 2020 and the assessment completed on 2 November 2020 (see [15] above);

(ii)    $30,000.00 per the order made on 19 August 2021 (see [21] above);

(iii)    $39,882.78 per the order made on 20 December 2021 (see [25] above); and

(b)    such further orders as had or may have been made by the Federal Circuit and Family Court of Australia for payment of moneys by BLG23 either to BLH23, or in respect of which BLH23 has made payment which was required to be made by BLG23 including, but not limited to, orders made on 11 March 2016, 3 June 2016 and 24 December 2019,

and the payment of interest on such amounts pursuant to s 117 of the Family Law Act (receiver order);

(4)    orders as to the scope of the receiver’s powers including orders as to the order of application of that receiver is to apply to the net proceeds of sale of assets collected by the receiver;

(5)    orders requiring BLG23 to co-operate with the receiver including orders requiring BLG23:

(a)    to deliver up to the receiver vacant possession of Lot 1;

(b)    to do all things, provide all documents and authorities, and execute all documents as may be requested by, and comply with any other reasonable request made by the receiver, to cause Lot 1 to be transferred into the sole name of BLG23, consistent with the orders made by Deputy Chief Justice McClelland on 24 December 2019 and thereafter to be conveyed to a purchaser of that property upon sale of that property by the receiver; and

(6)    an order that the receiver’s remuneration be paid from BLG23’s property and financial resources.

39    His Honour’s reasons for making the vexatious litigant order included:

57.    In relation to this court, the proceedings the subject of the main judgment were held to be an abuse of process and failed to satisfy the wife’s duty to achieve the overarching purpose. There, I said

130. I refer to my reasons above at [82]–[109], which led to the conclusion the wife has no reasonable prospect of success on her substantive application under s 90SN. For the same reasons, I conclude, like the Full Court, that the wife in truth refuses to accept the outcome of the proceedings before McClelland DCJ and the Full Court. While relying on the discussion above in full, I point in particular to the multiple applications the wife has brought since the final decision of McClelland DCJ. These betray this obdurate refusal, as does her continued and substantial reliance on circumstances which are clearly long past, including the purported claim of Mr K. This is sufficient to warrant a conclusion that the wife wants to relitigate issues already finally determined, and the principles of finality and fairness operate to preclude her doing so, even if her claims had any merit, which I have found they do not.

131. But in addition and separately, for the same reasons, I draw the same inference as the Full Court, namely, that the wife’s multiple applications constitute “no more than a strategy which is designed to delay enforcement of the orders mounting up against her as long as possible”. This clearly brings the administration of justice into disrepute and requires dismissal of the wife’s applications as an abuse of process.

58.    I am satisfied the proceedings the subject of the main judgment were vexatious.

59.    The wife has been criticised for her failures to accept the principles of finality in Massalski & Riley (No 2) [2021] FamCAFC 152:

14. … Clearly the wife had read our reasons for judgment but for whatever reason she is unwilling to accept that the proceedings between her and the husband are a de facto financial cause, that her arguments have failed and principles of finality. It is difficult to come to any view other than the wife’s recently filed s 79A application (or its allied provision under Pt VIIIAB) has no reasonable prospects of success and that it is no more than a strategy which is designed to delay enforcement of the orders mounting up against her as long as possible.

60.    In her oral submissions, the wife was quite clear that she did not accept the finality of the proceedings in this court. She said:

I acknowledge I do not accept the decision of the Family – Family Court because there’s no finality. I was not given an opportunity to transfer a property to my name that would give me financial independence, that would give me a title that is realisable, because the title is not a Torrens title any more and it’s not a strata title. That is the substance of my grievance.

62.    Although the wife’s responses to fairly simple questions were somewhat obscure, it is tolerably clear that, despite professing respect for the decision of this court, she is convinced that the orders of this court about property adjustment cannot be accepted, that she deserves a property to give her financial independence, and she intends to continue an attack on the outcome in this court by litigation in various other courts and tribunals.

64.    There is no doubt that the wife has frequently instituted proceedings.

65.    I am satisfied that the wife is subjectively convinced that all her proceedings are justified, and she has been the victim of deceitful and collusive conduct between the husband and his solicitors. However, over a period of some eight years, the wife has failed to convince anyone else that these convictions are rationally based, let alone reflect a true situation.

66.    In the context of these proceedings, the wife’s refusal to accept decisions which have not been in her favour is beyond debate.

67.    I am satisfied that:

(a)    the proceedings in this court the subject of the substantive judgment had no reasonable prospects of success and were an abuse of process;

(b)    the wife has demonstrated habitual and persistent institution of proceedings which have often and consistently been determined against her;

(c)    the wife has consistently failed to understand the principle of finality, in a range of different jurisdictions, including the Supreme Court of NSW, the Court of Appeal of NSW, the District Court of NSW, and this court, despite receiving explicit guidance from the Full Court on this question;

(d)    the wife has persisted in maintaining or instituting proceedings beyond the point where a rational person would have “abandoned the field”;

(e)    the proceedings instituted in this court, since her failed appeal, have moved from the unlikely to the ridiculous (adopting the phraseology of Perram J); and

(f)    the wife’s persistent renewal of litigation on issues already adversely determined against her has been found in this court to be a strategy to avoid enforcement of orders against her, and generally pose a risk to the public interest by consuming and wasting the resources of this and other courts in a manner inimical to the administration of justice.

68.    The evidence makes clear that for some eight years in multiple jurisdictions, the wife has habitually and persistently instituted proceedings which, as demonstrated by the equally persistent and habitual failure of those proceedings, generally lacked reasonable grounds. Clearly, at times the applications were no more than attempts to relitigate adverse outcomes which the wife just refused to accept. Proceedings in this and other courts have been dismissed as abuses of process, with Judge Olsson SC stating in Massalski v Riley & Anor (Unreported, District Court of NSW, 25 February 2022) that “The pleading in the present case is so similar to that of the earlier proceeding that I conclude that [the wife]’s conduct constitutes an abuse of process or alternatively is vexatious and oppressive.”

(emphasis added)

40    His Honour’s reasons for making the receiver order included:

72.    The husband argues that receivers should be appointed to the property of the wife to bring about payment of amounts owed to him.

73.    He points to reasons which overlap with the reasons which lead to a conclusion that the wife’s conduct has been vexatious. A corollary of the wife’s habitual and persistent applications to this court is her complete failure to satisfy existing orders, coupled with her clear refusal to accept that such orders must be complied with.

74.    The orders sought by the husband identify the significant costs orders already made in his favour, which total about $280,000 excluding any interest. These costs orders are all over twelve months old. As the Full Court observed in awarding costs against the wife, the many applications by the wife constituted a strategy to avoid payment of these costs orders, the validity of which she does not accept. The wife’s submission ignores the fact that her appeal has been stayed by yet another failure to make a payment ordered by the court as security for costs. The basis of that order was the weakness of her appeal.

75.    I am persuaded that the wife has no intention of making any payment to the husband, despite the court’s orders.

...

79.    I am persuaded that a sufficient case for the appointment of a receiver has been made out. An enforcement procedure is necessary. Without enforcement, there is no realistic prospect that the orders of the court for payment of money will be satisfied or that the husband will receive his entitlement. I am satisfied a receiver is the appropriate method and is proportional to the difficulty of recovery and the size of the amounts owing. A receiver with the necessary powers can undertake the process to realise property of the wife to satisfy her payment obligations. In my view, this is a less cumbersome and expensive process than, for example, other possible modes of enforcement, such as an order for sequestration of the wife’s property.

80.    The wife resisted the appointment of a receiver. She argued that if she succeeds on her appeal, the basis for the appointment of a receiver is removed. I reject the argument because her appeal is presently stayed, as she has refused to pay security for costs, the appeal has poor prospects of success, and even if the appeal was allowed, the wife’s unsatisfied obligations to pay money will remain undisturbed unless she ultimately has some success in making arguments which have failed in the main judgment and before the Full Court, and which I held formed part of an abuse of process. I am also persuaded that she is a vexatious litigant.

81.    Accordingly, I will make the orders sought by the husband.

(emphasis added)

41    On 15 August 2022, Justice Aldridge in the Family Court dismissed BLG23’s application for review of the orders made by Appeal Judicial Registrar Cameron on 19 April 2022 and 20 June 2022 and ordered that BLG23 pay BLH23’s costs of that application fixed in the sum of $8,000.

42    In October 2022, the primary judge heard an application by BLH23 to list his creditors petition for hearing. BLG23 opposed that application on the bases that: (1) the proceeding might have been transferred to the Family Court; and (2) the proceeding might have been referred to the High Court of Australia because it raised a constitutional issue. His Honour found both of those arguments to be misconceived and listed the hearing of the creditors petition for hearing in December 2022.

43    On 28 October 2022, Justice Harper made a declaration that BLG23 owed BLH23 the sum of $22,157.18. His Honour’s reasons for doing so are set out in Massalski & Riley [2022] FedCFamC1F 835. The $22,157.58 represented amounts that BLG23 should have, but had not, paid pursuant to earlier orders of the Family Court and which had instead been paid by BLH23.

44    On the same day, Justice Harper in the Family Court made further orders: Massalski & Riley (No 4) [2022] FedCFamC1F 832, including an order that BLG23 pay BLH23’s costs on an indemnity basis of the applications the subject of his Honour’s 4 February 2022 orders. In his reasons for judgment, his Honour noted that previous orders in the Family Court requiring BLG23 to pay BLH23’s costs were unsatisfied, in an amount of approximately $315,000 (at [20], [29]); and that BLG23 had failed to co-operate with the receiver (at [30]). His Honour stated at [33]:

I am satisfied that [BLG23’s] conduct in these proceedings became egregious and would alone constitute a justifying circumstance for a costs order against her.

45    On 1 November 2022, the Full Court of the Family Court (Aldridge, Austin and Tree JJ) dismissed BLG23s application for leave to appeal the 5 August 2022 judgment of Justice Harper: Massalski (No 2) [2022] FedCFamC1A 167.

46    In December 2022, the primary judge heard the creditors petition. As noted above at [3], his Honour made a sequestration order against BLG23s estate and the trustee was appointed.

47    Following his appointment, the trustee sought to discontinue an appeal against the order made by the Associate Justice in April 2022 dismissing BLG23’s application to be joined to the remaining Victorian Supreme Court proceeding (see [31] above). BLI23’s evidence is that leave to discontinue the appeal was refused.

48    On 9 December 2022, Justice Harper in the Family Court dismissed BLG23’s application for the setting aside of the orders made on 4 February 2022 and 5 August 2022. In that application, which was filed in contravention of the vexatious litigant order, BLG23 named as respondents solicitors and counsel who had represented BLH23. His Honour found that the application was an abuse of process: Massalski & Riley (No 6) [2022] FedCFamC1F 1029 at [22].

49    Later in December 2022, a judge of the Supreme Court of New South Wales dismissed, with costs, a proceeding brought by BLG23 against BLH23, a subsequent partner of BLH23, and a solicitor who had acted for BLH23.

50    On 19 December 2022, BLG23 filed a notice of appeal against the decision of the primary judge, thus commencing the present proceeding.

51    On 1 February 2023, Justice Chen in the Supreme Court of New South Wales dismissed, with costs, a proceeding brought by BLG23 in so far as that proceeding was against BLH23: Massalski v The Owners SP 90255 [2023] NSWSC 23.

52    In February 2023, Lot 1 was transferred to BLG23, as envisaged by the earlier orders of the Family Court. This occurred because the receiver took the necessary steps to cause this to occur.

53    On 23 February 2023, I made orders for the preparation of the present applications for hearing. I also ordered that BLG23 file and serve any interlocutory application (as she had foreshadowed) for a stay of her appeal on the basis of an application to the High Court of Australia pursuant to s 40 of the Judiciary Act 1903 (Cth) and affidavit evidence in support of that application by 14 March 2023. No such application was filed.

54    On 8 March 2023, Justice Harper in the Family Court dismissed an application by BLG23 for leave to commence a proceeding against the receiver in relation to decisions made by the receiver affecting the Owners Corporation of the Strata Plan SP 90255, which BLG23 alleged were an abuse of his function as a receiver and in contravention of the Strata Schemes Management Act 2015 (NSW), and which had an effect of degrading the value of Lot 1. His Honour ordered that BLG23 pay BLH23s costs on an indemnity basis in circumstances where his Honour was satisfied that BLG23s conduct sought to interfere with the enforcement processes of that Court and that her application was an abuse of process that brought the administration of justice into disrepute: Massalski & Riley (No 7) [2023] FedCFamC1F 128 at [25].

55    Mr Byrnes gave uncontradicted evidence, which I accept, that:

(1)    a real estate agent who acted for BLH23 in the sale of Lot 2 has estimated that Lot 1 should sell for more than $1,000,000 in its present state;

(2)    BLG23 continues to reside in Lot 1 and has not given vacant possession as required by the orders made by Harper J on 25 August 2022;

(3)    on 29 November 2022, BLG23 affirmed an affidavit in the proceeding from which this appeal is brought in which she stated that she held silver bullion to the value of $71,914.73 in a self-managed superannuation fund with BLI23. BLG23 did not explain how she could access the silver bullion;

(4)    BLG23 also failed to comply with the orders made on 5 August 2022 that she vacate Lot 1 and provide the receiver with documents and financial records and other information sought by the receiver;

(5)    BLI23 has alleged that BLG23 owes him more than $450,000;

(6)    the fees incurred by the receiver exceed $100,000 and continue to be incurred;

(7)    at no time since costs were first awarded against BLG23 in 2016 has she voluntarily paid any costs order made in favour of BLH23; and

(8)    BLG23 has not filed a Statement of Affairs or any other document disclosing her financial position.

56    Mr Byrnes has provided evidence that the amount owed by BLG23 to BLH23 (excluding interest) pursuant to costs orders made in the Family Court and which are charged against Lot 1 and subject to the receivership are:

Date of order

Status

Amount

1

25 May 2020 – Family Court costs – other than the transferred Victorian Supreme Court proceeding (see [15] above)

Assessed (2 November 2020)

$209,945.25

2

25 May 2020 – costs – transferred Victorian Supreme Court proceeding (see [25] above)

Assessed (20 December 2021)

$39,882.78

3

19 August 2021 (see [21] above)

Fixed

$30,000

4

20 June 2022 (see [32] above)

Fixed

$7,000

5

15 August 2022 (see [41] above)

Fixed

$8,000

6

28 October 2022 (see [43] above)

Fixed

$22,157.18

7

28 October 2022 (see [44] above)

Not yet assessed (indemnity costs order)

$224,937.67

Total

$541,922.88

57    I accept Mr Byrnes’s evidence as set out in the previous paragraph but note that BLG23 has filed a notice disputing the quantum of $224,937.67 sought by BLH23 under the 28 October 2022 indemnity costs order.

58    Mr Byrnes has also given uncontradicted evidence, which I accept, concerning the likely quantum of costs (excluding interest) pursuant to costs orders made against BLG23 in favour of BLH23 in courts other than the Family Court which may be summarised as follows:

Date of order

Status

Amount

1

19 November 2019 (see [12] above)

Judgment

$184,166.25 awarded; $67,638.33 balance after deductions via garnishee order

2

March 2022 (see [29] above)

Itemised bill served. Assessment application filed (with 23 June 2022 entry)

$79,845.55 (includes June 2022 entry)

3

April 2022 (see [31] above)

Bill to be prepared

More than $20,000

4

June 2022 (see [33] above)

Itemised bill served. Assessment application filed (with 22 March 2022 entry)

$79,845.55 (includes March 2022 entry)

5

July 2022 (see [35] above)

Bill under preparation

More than $30,000

6

December 2022 (see [49] above)

Bill under preparation

More than $200,000

7

1 February 2023 (see [51] above)

Bill under preparation

More than $80,000

Total

More than $477,483.88

59    To these might be added the costs payable by BLG23 pursuant to the indemnity costs order made by Justice Harper on 8 March 2023 (see [54] above).

60    As is apparent from [56] to [59] above, the outstanding costs owed by BLG23 to BLH23, together with interest thereon (and allowing for some reduction for those estimated amounts, which are yet to be assessed) appear likely to be in the order of $1,000,000.

BLG23’s evidence

61    Before considering the security for costs application it is appropriate to refer to some features of BLG23’s evidence.

62    BLG23’s evidence on this application comprises two affidavits of 56 and 92 paragraphs respectively. Each affidavit has numerous exhibits or annexures. The evidence includes references to the charging order (see [27(2)] above). However, despite its volume, BLG23’s evidence does not address the following critical evidentiary issues on the security for costs application, namely: (1) matters relevant to her prospects of succeeding on the appeal; (2) the risk that a costs order made against her would not be satisfied, and as part of this, her ability and her willingness to pay such an adverse costs order, and her financial position; (3) her non-payment of numerous costs orders; and (4) the effect, if any, that an order for the provision of security would have upon her ability to prosecute the appeal.

63    Instead of addressing these issues, BLG23’s evidence sets out various historical matters. Some of those matters are relied upon in support of a submission that the application for security for costs is actuated by an improper purpose. Others of those historical matters are of no relevance to the present application. Many of them have been the subject of arguments unsuccessfully pursued in other courts.

64    BLG23’s failure to address the salient issues cannot be attributed to any naiveté as a self-represented litigant. As the summary of some of the litigious history between BLG23 and BLH23 set out above demonstrates, BLG23 is not a neophyte. Further, she has had the benefit of defending an application for the provision of security for costs before Appeal Judicial Registrar Cameron and the benefit of his thorough reasons which addressed in detail various factors which inform the exercise of the discretion to make an order for the provision of security for costs (see [32] above). Indeed, as is discussed below, BLG23 identified some such factors in her written submissions on this application.

C. THE SECURITY FOR COSTS APPLICATION

65    Against that necessarily lengthy background, I turn to consider BLH23’s application for security for costs.

The discretion

66    Section 56 of the Federal Court of Australia Act 1976 (Cth) (FCA Act) provides the Court with a discretion to order (relevantly) an appellant in an appeal under Division 2 of Part III of the FCA Act (as this appeal is) to give security for the payment of costs that may be awarded against BLG23. The discretion is unfettered but must be exercised judicially; and each application for an order for the provision of security turns on its own facts: Bell Wholesale Co Ltd v Gates Export Corp (1984) 2 FCR 1 at 3-4 (Sheppard, Morling and Neaves JJ).

67    Set out below is my analysis of the factors relevant to the exercise of the discretion in the present case.

Factors informing the exercise of the discretion

(1) Prospects of success on the appeal

68    The primary judge found that BLG23 had committed an act of bankruptcy and that the debt remained outstanding (J[11], [16]). After satisfying himself of all of the matters required by the Bankruptcy Act 1966 (Cth), the Bankruptcy Regulations 2021 (Cth) and the Federal Circuit and Family Court of Australia (Division 2) (Bankruptcy) Rules 2021 (Cth), the primary judge considered whether he should exercise his discretion not to make a sequestration order (J[10] to [11]).

69    The principal matter considered by the primary judge in the exercise of his discretion was BLG23’s contention, in her grounds of opposition, that she was solvent. His Honour noted (at J[6]) that the threshold question was whether BLG23 could pay her debts as and when they fell due by assets realisable in a relatively short time (Sandell v Porter (1966) 115 CLR 666 at 670). At J[12] to [15], his Honour stated:

12.    When determining whether a party can pay their debts as and when they fall due from readily available resources, the Court is entitled to the fullest and best evidence of the party’s alleged solvency. However, in this case, the Court has not been provided with particulars of BLG23’s income or expenses, with particulars of what I assume would have been a voluntary redundancy payment when she retired from the public service last year, or with particulars of any assets other than the property which is the subject of the family law dispute. Reference was made to a bullion holding, but the account paperwork annexed to BLG23’s affidavit is not in her name and there is no evidence of how the bullion’s value might be made available to her, or when it would be.

13.    The family law property proceedings relate to the only asset of significant value apparently attaching to BLG23, however, that asset is now in the hands of a receiver and there is no indication of when it will be available to BLG23 to sell or mortgage. There are also disputes concerning further work to the property and in relation to its strata plan. I am not persuaded that there is any real likelihood of this asset becoming available for application to the balance of the District Court judgment debt at a sufficiently early date that it could be said that its existence demonstrated that BLG23 was solvent.

14.    The Supreme Court proceedings concern costs of AVO proceedings in the Local Court and related appeals in the District Court and BLG23 says that, if she were successful, she should be awarded damages which would exceed what she presently owes the applicant. I have read the Supreme Court statement of claim and found that a difficult exercise. It would seem, with respect, that the Supreme Court judge dealing with the matter has also found the matter one of some difficulty, as judgment has been reserved since April. The parties have not indicated that his Honour has advised a date for the delivery of judgment and one cannot know when his Honour will finalize his considerations. That being so, one cannot conclude, even if BLG23 were to be successful in that proceeding, that she would be so in a time frame that would indicate solvency. I do not consider that the Supreme Court proceedings provide a basis on which it could be concluded that BLG23 was solvent.

15.    BLG23 has also indicated that she proposes to seek constitutional writs in the High Court for review of the decisions of the Federal Circuit and Family Court of Australia (Division 1) in her case. However, I am told that no application of that sort has been filed and it would not be appropriate to adjourn this matter to permit that to be done at this point, given that such proceedings could have been filed by now or at least readied, or appropriate to delay the relief to which the applicant is entitled.

(emphasis added)

70    BLG23’s grounds of appeal in this Court are as follows:

1.     The learned judge erred making a finding that the Appellant committed an act of bankruptcy, without considering that:

a)     the judgment upon which the issuance of the bankruptcy notice was procured, was subject of recovery available in the Family Court proceedings;

2.     The learned judge erred making a finding that the Appellant was insolvent, without considering that:

a)     the Respondent had sufficient security for the alleged debt, holding his name registered on the title of the property at , Ettalong Beach, that was to be transferred to the Appellant according to the orders of the Family Court from 24 December 2019;

b)     there are pending proceedings in the Family Court and in the Supreme Court of NSW in relation to the issues affecting the property co-owned by the Appellant and the Respondent, that prevent a transfer of Respondent’s interest in the said property to the Appellant, depriving her of her right to get finance to satisfy the judgment debt.

c)     The Appellant had funds available in her self-managed superfund that could be liquidated and satisfy the judgment debt.

3.     The learned deprived the Appellant of procedural fairness, refusing to stay the proceedings until:

a)     the proceedings between the Appellant and the Respondent in other jurisdictions, in respect of the co-owned assets and joint liabilities are finalised;

b)     the questions of law are submitted for consideration of the Hight Court.

c)     The judgment was against dictates of justice because:

a)     the learned judge failed to consider the question of law raised by the Appellant arising in respect of issues related to the Notice of Constitutional matter under s 78B of the Judiciary Act 1919,

b)     the learned judge failed to consider relevant case law providing a definition of the term “immediate future” in respect of Appellant’s ability to meet her liabilities;

c)     the learned judge failed to consider that the cost orders in relation to court proceedings, which provided basis for the bankruptcy petition to be issued were impeachable or could be set-off in effect of the Statement of Claim SYC2019/400687 against the Respondent, pending a judgment to be delivered by Justice Bellew;

d)     the learned judge wrongly assumed that the appointment of the receiver was a determinative factor affecting Appellant’s capacity to pay her debts, without considering the pending proceeding in the Family Court against the receiver;

e)     the Respondent disentitled himself from bringing new proceedings against the Appellant, after he failed to comply with the cost order issued on 23 October 2018 in the proceedings SYG3857 of 2017, where he withdrew the wrongly procured bankruptcy notice and consented to pay Appellant’s costs.

71    BLH23’s counsel contended that the grounds of appeal are hopeless.

72    I have considered the grounds of appeal as pleaded in the context of such evidence as there is before the Court which touches upon the likely prospects of success of those grounds. Having done so, I do not accept the submission of BLH23’s counsel that I should treat the appeal as hopeless. Nevertheless, the impression that I have (and it is only a first impression) is that it is an appeal that does not enjoy significant prospects of success. That is so, for the following reasons.

73    The first ground of appeal contends that the primary judge erred in finding that BLG23 committed an act of bankruptcy without considering that the judgment the subject of the Bankruptcy Notice was the subject of recovery available in the Family Court proceeding. This ground does not appear likely to succeed in circumstances where it was open to the primary judge to conclude that an act of bankruptcy had been committed on the basis that s 40(1)(g) of the Bankruptcy Act had been satisfied, and the recoverability of the underlying debt is not a matter which required consideration under that section. Further, BLG23 sought to set aside the Bankruptcy Notice in a hearing before Judge Manosouridis and was unsuccessful (see [35] above).

74    The second ground of appeal is founded upon a misconception that the primary judge found that BLG23 was insolvent. The true position is that the primary judge considered BLG23’s contention that she was solvent but was not satisfied on the evidence before him that she had made good that contention (see [69] above). Further:

(1)    the foundation of his Honour’s finding that BLG23 had not established that she was solvent, namely the paucity of information concerning her financial position, is not challenged in the notice of appeal;

(2)    sub-grounds (2)(a) and (b), even if established, would not likely gainsay the finding that BLG23 had failed to establish her solvency; and

(3)    sub-ground (2)(c), namely the suggested availability of funds in BLG23’s self-managed superannuation fund that could be liquidated to satisfy the judgment debt, was specifically considered by the primary judge, who stated in the passage set out at [69] above from J[12]:

Reference was made to a bullion holding, but the account paperwork annexed to BLG23’s affidavit is not in her name and there is no evidence of how the bullion’s value might be made available to her, or when it would be.

75    The third ground of appeal contends that there was a denial of procedural fairness by the primary judge’s refusal to stay the proceedings. The details of such a stay application and its refusal do not appear to be before the Court on this application (save to the extent that this may be a reference to the primary judge’s decision, in October 2022, to set the creditor’s petition down for hearing over the opposition of BLG23 (see [42] above)). In any event, the decision the subject of the third ground of appeal is a discretionary decision concerning a routine matter of practice and procedure in respect of which leave to appeal would be required. The prospects of establishing an error of the kind required appear slight: see House v King [1936] HCA 40; (1936) 55 CLR 499 at 504 to 505 (Dixon, Evatt and McTiernan JJ); Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; (1981) 148 CLR 170 at 176 to 177 (Gibbs CJ, Aickin, Wilson and Brennan JJ).

76    On a construction of the third ground of appeal benevolent to BLG23, sub-ground (c) might be read as a separate ground of appeal. However, none of the sub-grounds to ground 3(c), if proven, seem capable of establishing error on the part of the primary judge.

77    Paragraphs [72] to [76] above deal with the grounds of appeal as articulated in the notice of appeal. I note that BLG23’s evidence and submissions addressed many matters outside of those grounds and that BLG23 suggested that she may seek leave to amend her grounds of appeal. However, this application must proceed on the basis of the notice of appeal as filed. Accordingly, I do not address the various other matters floated by BLG23 in her submissions other than to observe that it appears that a number of them have been the subject of earlier proceedings which proceedings were determined adversely to her.

78    Further, to the extent that these arguments touch upon BLG23’s contention that the Bankruptcy Notice was issued for an improper purpose, the occasion for the advancing and determination of such arguments was the application to set aside the Bankruptcy Notice which application was heard and determined by Judge Manosouridis. Indeed, many of those arguments were considered and dismissed by his Honour in his detailed and comprehensive reasons for judgment. For example, as part of his consideration of BLG23’s argument that there was an abuse of process in issuing a bankruptcy notice when there were alternative remedies available to BLH23, his Honour considered and rejected BLG23’s argument that her circumstances were relevantly similar to those which obtained in Mariconte v Nobarani [2020] FCA 1485, a case in which a bankruptcy notice was set aside as an abuse of process. His Honour did so because BLG23 had not proven the facts the existence of which formed the basis of her argument; and because the decision in Mariconte had been overturned on appeal in Nobarani v Mariconte [2021] FCAFC 96 (Allsop CJ, Farrell and Derrington JJ). BLG23 re-ran her argument based on Mariconte as a central argument on the present application.

(2) The risk that a costs order in favour of BLH23 against BLG23 would not be satisfied

79    I am satisfied that there is a real risk that a costs order against BLG23 would not be satisfied for the following reasons.

80    First, the evidence before the Court as to BLG23’s financial position (noting that BLG23 has not adduced any detailed evidence as to her financial position or complied with her obligation under s 54 of the Bankruptcy Act to make and file a statement of affairs) is as follows:

(1)    she owns:

(a)    Lot 1, which a real estate agent has estimated to have a value in excess of $1,000,000;

(b)    an interest in a superannuation fund. There is some evidence that it had a value of $71,914.73 in November 2022;

(2)    she is liable to pay BLH23 an amount likely to be in the order of $1,000,000 pursuant to various costs orders;

(3)    she is liable to the receiver for his fees. Those fees presently exceed $100,000;

(4)    the trustee’s fees will be recoverable from her bankrupt estate;

(5)    BLI23 claims to be a creditor owed more than $450,000;

(6)    there is no evidence of her present income, if any; and

(7)    at least as at 1 December 2022, when the sequestration order was made, she was not able to pay her debts as and when they fell due.

81    Taking these matters into account, there appears to be a real risk that BLG23 will not be in a position to meet an adverse costs order. Moreover, I am comfortably satisfied that BLG23, even if able to meet an adverse costs order, would not do so and that no payment would be made unless BLH23 were to take action to enforce the costs order. Such a conclusion is readily drawn from the evidence of the litany of outstanding costs orders described above and summarised at [56], [58] and [59] above, and the evidence that none of these costs orders have been paid, save only to the extent that amounts were garnisheed from BLG23s wages.

82    In this regard, it is appropriate to take into account, in both the public interest and in the interest of BLH23, the persistence with which BLG23 has pursued unmeritorious proceedings; and to recognise that there are limits to the extent to which litigants with a history of pursuing unmeritorious proceedings should be permitted to do so when the respondent(s) to such proceedings are unlikely to recover any costs order in their favour: see Nyoni v Pharmacy Board of Australia [2018] FCA 1313 (White J). The sorry history of BLG23’s pursuit of litigation against BLH23 (in so far as it is presently relevant) is set out above. As noted at [38(2)] above, she is the subject of the vexatious litigant order in the Family Court. Her approach to litigation has been frequently criticised in that court and in other courts in the decisions cited above.

83    However, the present proceeding is an appeal against a sequestration order made in a proceeding that BLG23 did not instigate and BLG23’s actions might be regarded as defensive. For that reason, whilst I take into account the history of unmeritorious litigation described above, I give this consideration less weight than it would be afforded if this proceeding were one in which BLG23 was the initiating party.

(3) The cause of BLG23’s impecuniosity

84    BLG23 identified in her written submissions that a factor informing the exercise of the discretion is whether her impecuniosity was caused by BLH23. She then submitted that “[t]he circumstances of this case require consideration of evidence showing that [BLG23’s] impecuniosity was caused by [BLH23s] conduct the subject of the claim”. However, the history of proceedings set out above makes plain that the various courts have found in favour of BLH23 and awarded costs against BLG23. Thus, any impecuniosity of BLG23 appears to have been self-inflicted rather than caused by BLH23.

(4) Potential stultification of the appeal

85    BLG23, in her written submissions, identified that a factor informing the exercise of the discretion was whether the making of an order that she provide security for costs would stultify a legitimate claim that she has. However, she did not then contend that her prosecution of the appeal would in fact be stultified by the making of an order requiring her to provide security for costs. Further, I would not have concluded that an order for the provision of security for costs would have stultified the appeal in circumstances where BLG23 has failed to provide any evidence of her own capacity to meet any adverse costs orders: see Live Board Holdings Ltd v Cody Live Pty Ltd [2017] NSWCA 302 at [90] (Bathurst CJ, Leeming JA and Barrett AJA); and where she has failed to comply with s 54 of the Bankruptcy Act. In any event, if I had been satisfied that the appeal would have been stultified then I would have regarded this as an important, but not a decisive factor, in the exercise of the discretion for the reasons set out by White J in Nyoni at [22] to [23] and by Halley J in Goo v Kim [2022] FCA 1562 at [7] to [10].

(5) Does BLH23 already hold security?

86    BLG23 submitted that it was unnecessary for the Court to order the provision of security for costs (and that it was an abuse of process for BLH23 to seek such an order) in circumstances where BLH23 had sufficient security in the form of the charging order. I do not accept this submission. A costs order made by this Court would not be covered by the terms of the charging order, which relates only to orders of the Family Court.

(6) Is the application for security actuated by improper purposes?

87    BLG23 submitted that the application or security for costs was actuated by a purpose of frustrating her in her pursuit of various proceedings.

88    I do not accept this submission. An allegation of improper purpose or abuse of process is a grave allegation and the evidence required to prove it must be commensurately persuasive. In the evidence before the Court there is no basis to conclude that the security for costs application was brought for any purpose other than its ex facie purpose of providing some protection to BLH23, in this proceeding, from the possibility that he becomes the beneficiary of another costs order that will be unsatisfied.

(7) BLG23’s status as a natural person

89    Historically, courts have been cautious about making orders requiring natural persons to provide security for costs: D v P [2020] NSWCA 174 at [31] to [39] (Bell P, as his Honour then was); Mohareb v Harbour Radio Pty Ltd [2020] NSWCA 231 at [15], [63] (Bell P, Leeming JA and Simpson AJA); Ward v Westpac Banking Corp Ltd [2023] NSWCA 11 at [24] (Griffiths AJA, Ward P and Adamson JA agreeing). However, BLG23’s status as a natural person is not a bar to such an order, rather it is a factor to be weighed with other factors informing the exercise of the discretion.

(8) The nature of the proceeding

90    The present proceeding is an appeal. In contrast to a first instance proceeding, BLG23 has already had a prior opportunity to convince a primary judge that the sequestration order should not have been made. I note the comments of Spencer J in Tait v Bindal People [2002] FCA 322 at [3] that at the appellate level, “there has already been a determination adverse to the person against whom security for costs is sought and, if it be shown that there is a substantial risk that even if successful the respondent to the application for leave to appeal, or to an appeal, will be deprived of his costs, such an outcome would clearly be unjust”. See also Kordovoulos v Dixon-Hughes [2022] NSWCA 322 at [31] (Mitchelmore JA); Du Bray v ACW [2020] FCA 1680 at [13] (Flick J); Dye v Commonwealth Securities Ltd [2012] FCA 992 at [27] (Emmett J).

(9) Other factors

91    No other factors relevant to the exercise of the discretion were addressed by the parties. For example, there was no suggestion that there had been a delay in making the application for security.

Conclusion as to the exercise of the discretion

92    I have considered the various factors informing the exercise of the discretion. An order for the provision for security should be made because the following factors strongly favour the making of such an order: (1) my impression that the appeal does not enjoy significant prospects of success; (2) the significant risk that BLG23 will not satisfy any costs order which may be made against her if her appeal is unsuccessful; and (3) the absence of any basis for a conclusion that: (a) BLH23 was a cause of any impecuniosity of BLG23; or (b) the presence of a security for costs order would stultify the appeal.

93    Further, for the reasons set out at [86] to [91] above, none of the other factors which inform the exercise of the discretion in the present case are of any or sufficient moment to overcome the force of the factors identified in the previous paragraph.

Quantum of the order for the provision of security for costs

94    I turn now to consider the quantum of security to be provided.

95    BLH23’s interlocutory application seeks an order for the provision of security in an amount of $30,000.

96    Mr Byrnes, who has practised since 1975 and has extensive litigation experience, estimated that BLH23s costs of the appeal on a solicitor and client basis would be in the order of $21,901 for solicitor’s costs and $15,400 for counsel’s fees, a total of $37,301. That estimate was updated in an attachment to BLH23’s written submissions to a figure of $41,052 on a solicitor and client basis. BLH23’s counsel suggested in oral submissions that the party and party costs are likely to ultimately be in the order of $50,000, but there is no evidentiary basis for that suggestion and I do not take it into account.

97    The appellant has not adduced any evidence to the contrary or otherwise challenged the estimates provided by Mr Byrnes.

98    I accept the evidence of Mr Byrnes as to the likely costs of the appeal. I also accept his evidence that BLH23’s costs are likely to be greater than would otherwise be the case if BLG23 were legally represented. That is because, as history has shown (including on this application) BLG23’s case is unlikely to be confined to relevant and viable arguments and instead is likely to range widely and raise issues and arguments which would likely not be raised by a legal professional, but which nevertheless would require consideration by BLH23’s legal representatives, leading to the incurring of further costs.

99    Taking all of the above matters into account, and adopting a broad brush approach, there should be an order that BLG23 provide security for BLH23’s costs in the amount of $30,000. I will also make an order staying the proceeding until such security has been provided. I will not, however, make the order sought by BLH23 that the proceeding be dismissed if the security has not been provided within 42 days. Any application for an order for dismissal should be made by reference to the facts obtaining as at the date of the hearing of such an application.

D. THE APPLICATION FOR LEAVE TO INTERVENE

Introduction

100    I turn now to consider BLI23’s application for leave to intervene in this proceeding. As noted above, he is BLG23’s former husband and claims to be a creditor of her bankrupt estate. In support of his application he relies upon his affidavit affirmed on 6 March 2023.

101    BLI23’s application is made under r 9.12, which provides:

(1)      A person may apply to the Court for leave to intervene in a proceeding with such rights, privileges and liabilities (including liabilities for costs) as may be determined by the Court.

(2)      The Court may have regard to:

(a)      whether the intervener’s contribution will be useful and different from the contribution of the parties to the proceeding; and

(b)      whether the intervention might unreasonably interfere with the ability of the parties to conduct the proceeding as the parties wish; and

(c)      any other matter that the Court considers relevant.

(3)      When giving leave, the Court may specify the form of assistance to be given by the intervener and the manner of participation of the intervener, including:

(a)      the matters that the intervener may raise; and

(b)      whether the intervener’s submissions are to be oral, in writing, or both.

102    I note that BLI23 could also have relied upon r 36.32, which is in similar terms but is concerned specifically with leave to intervene in an appeal. There is no doubt that r 9.12 is broad enough in its terms to encompass an application for leave to intervene in an appeal: Hua Wang Bank Berhad v Commissioner of Taxation [2013] FCAFC 28; (2013) 296 ALR 479 at 491 [48] (Logan, Jagot and Robertson JJ); and the matters informing the exercise of the discretion to grant leave to intervene are broadly the same whether the application is made under r 9.12 or r 36.32: Hancock Prospecting Pty Ltd v Rinehart [2017] FCAFC 170; (2017) 257 FCR 442 at 513 [284] (Allsop CJ, Besanko and O’Callaghan JJ).

103    At 38 to 39 ([2] to [4] and [6]) of Roadshow Films v iiNet Ltd [2011] HCA 54; (2011) 248 CLR 37, the High Court explained:

2.    In determining whether to allow a non-party intervention the following considerations, reflected in the observations of Brennan CJ in [Levy v Victoria [1997] HCA 579; (1997) 189 CLR 579 at 600-605], are relevant. A non-party whose interests would be directly affected by a decision in the proceeding, that is one who would be bound by the decision, is entitled to intervene to protect the interest likely to be affected. A non-party whose legal interest, for example, in other pending litigation is likely to be affected substantially by the outcome of the proceedings in this Court will satisfy a precondition for leave to intervene. Intervention will not ordinarily be supported by an indirect or contingent affection of legal interests following from the extra-curial operation of the principles enunciated in the decision of the Court or their effect upon future litigation.

3.    Where a person having the necessary legal interest can show that the parties to the particular proceedings may not present fully the submissions on a particular issue, being submissions which the Court should have to assist it to reach a correct determination, the Court may exercise its jurisdiction by granting leave to intervene, albeit subject to such limitations and conditions as to costs as between all parties as it sees fit to impose.

4.    The grant of leave for a person to be heard as an amicus curiae is not dependent upon the same conditions in relation to legal interest as the grant of leave to intervene. The Court will need to be satisfied, however, that it will be significantly assisted by the submissions of the amicus and that any costs to the parties or any delay consequent on agreeing to hear the amicus is not disproportionate to the expected assistance.

6.    In considering whether any applicant should have leave to intervene in order to make submissions or to make submissions as amicus curiae, it is necessary to consider not only whether some legal interests of the applicant may be indirectly affected but also, and in this case critically, whether the applicant will make submissions which the Court should have to assist it to reach a correct determination.

104    As the Full Court of this Court explained in Hua Wang at [48], rr 9.12 and 36.26 require the Court to exercise a discretion, which exercise is informed by the satisfaction or otherwise of the criteria set out in those rules. One such criterion, in the context of the present application, is that BLI23’s contribution to the determination of the appeal be useful and different from the contribution of BLG23. This requires consideration of the Court’s task on appeal and of the anticipated contributions of the parties to the appeal.

105    The appeal is brought under s 24(1)(d) of the FCA Act. As such, it is an appeal by way of rehearing: see WAJR v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 106; (2004) 204 ALR 624 at [18] (French J, as his Honour then was); Jones v Southall & Bourke Pty Ltd [2004] FCA 539 at [2] (Crennan J). The nature of an appeal by way of rehearing was explained by the High Court (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ) in Lacey v Attorney General (Qld) [2011] HCA 10; (2011) 242 CLR 573 at 597 [57] as follows:

Appeal by way of rehearing – where the court conducts a rehearing on the materials before the primary judge in which it is authorised to determine whether the order that is the subject of the appeal is the result of some legal, factual or discretionary error. In some cases in an appeal by way of rehearing there will be a power to receive additional evidence. In some cases there will be a statutory indication that the powers may be exercised whether or not there was error at first instance.

106    Thus, the Court’s task on the appeal is to determine whether the primary judge has made a relevant error. This task is undertaken by reference to the pleaded grounds of appeal. Those grounds are reproduced at [70] above. Such determination is to be made on the basis of the materials before the primary judge unless the Court, in its discretion, allows the introduction of new evidence on the appeal: see s 27 of the FCA Act; Lacey at 597 [57].

107    BLI23’s evidence and submissions are wide-ranging. However, to the extent they raise matters salient to the application for leave to intervene, they reduce to the following central points:

(1)    BLI23 can provide a useful contribution on the issue of BLG23’s solvency; and

(2)    BLI23’s rights to prosecute his counter-claim in the remaining Victorian Supreme Court proceeding are directly affected by the outcome of the appeal because the trustee has or wishes to discontinue the claims brought in that proceeding on behalf of BLG23’s bankrupt estate.

108    I will deal with these in turn.

The solvency issue

109    As to BLI23’s first argument, he has submitted that his intervention would be useful on the issue of solvency, which is the subject of the second ground of appeal (see [70] above), including because he can provide information concerning the funds held to BLG23’s benefit in the superannuation fund. I do not consider that BLI23’s contribution on the issue of solvency would be useful or different from the contribution that BLG23 could make. As noted at J[12] to [15], which are reproduced at [69] above, BLG23 addressed the question of her solvency before the primary judge, but his Honour was not satisfied that she was solvent on the evidence that she presented, including as to the superannuation fund. Whilst it is possible that the Court at the hearing of the appeal might give BLG23 leave to adduce evidence that was not adduced before the primary judge, any such evidence would be capable of introduction by BLG23 through an affidavit of BLI23 and would not require that BLI23 become a party.

110    Further, I am not satisfied that BLG23 would not be capable of presenting her submissions on this issue; or that BLI23’s submissions would present anything different to those of BLG23.

Effect of the appeal upon BLI23’s rights in the remaining Victorian Supreme Court proceeding

111    BLI23’s submission in support of his second argument was to the following effect:

(1)    the High Court stated in Roadshow Films at 38 to 39 [2] (cited at [103] above) that:

A non-party whose interests would be directly affected by a decision in the proceeding, that is one who would be bound by the decision, is entitled to intervene to protect the interest likely to be affected.

(2)    he is a person directly affected by the decision in the appeal because of the effect upon his counter-claim in the remaining Victorian Supreme Court proceeding if the trustee discontinues the appeal against the decision of the Associate Justice; and

(3)    Thus, he has an entitlement to intervene.

112    BLI23 submits that his right to prosecute his interests in the remaining Victorian Supreme Court proceeding would be directly affected by the outcome of the appeal because: (1) the trustee has or has proposed to discontinue the appeal in the remaining Victorian Supreme Court proceeding on behalf of BLG23’s bankrupt estate; (2) as BLI23 lives in Ireland he has no access to relevant documents and he has no prospect of preparing his case without the appellant joining the proceeding as a party; (3) BLG23 initiated all the dealings between BLH23 and BLI23 which are the subject of the remaining Victorian Supreme Court proceeding and as such she is the only person who can lead particular evidence; (4) BLI23 requires BLG23 to lead evidence on various issues in that proceeding; and (5) BLG23 cannot assist BLI23 adequately as a witness and needs to remain a party so as to be actively involved and monitor any misinterpretation of facts.

113    I do not accept this submission for the following reasons. First, on BLI23’s own evidence, the discontinuance relates to an appeal from the decision of an Associate Justice in the remaining Victorian Supreme Court proceeding refusing BLG23 leave to become a party to that proceeding and the Court of Appeal of the Supreme Court of Victoria refused to grant leave to the trustee to discontinue the appeal from that decision. Secondly, in any event, I am not satisfied that if there were to be such a discontinuance by the trustee it would affect the prosecution of BLI23’s counter-claim in the remaining Victorian Supreme Court proceeding. Indeed, BLI23 submitted that his interest in that proceeding is advanced “by the way of a counterclaim against [BLH23], in which [BLI23] relies on the doctrine of equitable fraud, and one which does not affect the estate of [BLG23] in any way or interfere in the due administration of it”. Whilst BLI23 submitted that his counter-claim had been stayed because of the intervention of the trustee, there is no evidence to support a submission that the counter-claim (as opposed to the appeal from the decision refusing BLG23’s application for joinder) had been stayed and it seems an unlikely result.

114    Thirdly, the submission proceeds upon misconceptions that: (1) a discontinuance by the trustee of BLG23’s appeal of the decision to refuse her application to be joined to the remaining Victorian Supreme Court proceeding would prevent BLI23 from prosecuting his counter-claim in that proceeding; and (2) BLG23’s evidence, including documentary evidence, cannot be adduced unless she is a party to that proceeding. The true position is that it will be open to BLI23 to continue to prosecute his counter-claim and to adduce evidence from BLG23, consensually or by compulsion, despite any discontinuance of the appeal brought by BLG23. Fourthly, the passage from Roadshow Films upon which BLI23 relies suggests that the effect upon BLI23 of the outcome of the present appeal must be a direct effect in the sense of BLI23 being bound by the decision. There would be no such effect. Finally, even if all of the elements of the above-quoted passage from Roadshow Films were satisfied, it would still be necessary to exercise the discretion whether to grant leave to intervene and this would require satisfaction of the criterion that BLI23’s contribution be useful to the determination of the appeal: see Hua Wang at [48]; Stuart v State of South Australia (Oodnadatta Common Overlap Proceeding) (No 2) [2021] FCA 194 at [12] to [13] (White J). I am not so satisfied.

115    BLI23’s submissions and affidavit evidence also deal with a number of other topics which are of little to no relevance to the issues raised in the grounds of appeal. An intervener ought not to be allowed to bring arguments in favour of findings not made or sought in the Court below: Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd [2012] FCAFC 62. As the Full Court (Keane CJ, Bennett and Yates JJ) explained at [16]:

It is true that the rule expressly contemplates the making of submissions that are different from those to be advanced by the parties, but that does not mean that the Court should entertain submissions which are alien to the controversy resolved at first instance so as to facilitate a departure from the fundamental presupposition of r 36.32, namely, that the submissions by the intervener are to be germane to the appeal.

116    In any event, for none of these issues, has BLI23 established that his contribution to those issues would be useful or different from that of BLG23.

117    For completeness, I note that BLI23’s interlocutory application also seeks an order that the orders made by the primary judge be stayed until the finalisation of the remaining Victorian Supreme Court proceeding; and that the trustee be restrained from intervening in that proceeding. These orders travel beyond the leave I granted to BLI23 on 23 February 2023 to file an interlocutory application concerning his potential joinder to this proceeding; and were not meaningfully addressed in his submissions. In any event, as I have declined BLI23’s application for leave to intervene, he is not a party to the present proceeding and lacks standing to seek such orders.

Conclusion

118    For the reasons stated above, BLI23’s application should be dismissed. As the trustee (appropriately) adopted a neutral position on this application, there should be no order as to costs.

E. CONCLUSION

119    BLG23 should provide security for BLH23’s costs of the appeal in the sum of $30,000; and BLI23’s application should be dismissed.

I certify that the preceding one hundred and nineteen (119) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Goodman.

Associate:

Dated:    2 June 2023