Sunday, 22 February 2009

Family Court case; security for costs before conciliation conference not proper

In the recent Full Court of the Family Court case of Davey and Davey, the husband appealed against a security for costs order which required him to:
  • provide security for costs to the solicitors' trust accounts of the wife and of their son
  • before the conciliation conference was held
  • and if he did not do so, then his claim was stayed
  • and after the conciliation conference and before the trial, or his claim was stayed.

A security for costs order can be made where it is considered that the chances of success of the claim are low and money ought to be put forward now so that if that party loses, and a costs order is made against that party, then the other party has a means to be able to receive costs.

Applications for security for costs are rarely brought, because the courts are concerned that they might have the effect of denying people rights to argue their case in court.

A conciliation conference is a compulsory conference held in property matters which is aimed to try and settle matters and avoid trial.

The husband had no property. Justice May, sitting as the Full Court, held that the husband's claim had "limited prospects" and that it was therefore appropriate for a security for costs order to be made for after the conciliation conference.

Her Honour held:

It was not a proper exercise of his Honour’s discretion to make the order
requiring security for the conciliation conference particularly in view of
his findings as to the husband’s financial position.
In addition, it was not proper to order that without paying the costs of the hearing before his Honour the conciliation conference could not proceed.

Disclosure: I appeared for the second respondent.

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