Clayton v Bant

1. To facilitate the payment in Order 1, the wife shall contact the Canberra registry of Division 1 of the Federal Circuit and Family Court of Australia at ...@fcfcoa.gov.au.

Note: The form of the order is subject to the entry in the Court's records.

Note: This copy of the Court's Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).

1. These proceedings concern an application by the wife to commence property division proceedings in Australia following the parties' divorce and subsequent completion of property division proceedings in Country B. The parties married in 2012 and divorced in August 2019.
2. The parties both live in Country B and share the care of their two children there. The bulk of the property of the relationship is located in Country B, while the husband (who holds dual Country B-Australian nationality) holds a superannuation interest in Australia. It is the superannuation interest that forms the object of the wife's application.
3. The husband's contention as to the overall proceedings is that the Country B legal system has dealt with the whole of the property dispute; that the wife, due to a delay in commencing these proceedings following their divorce, requires leave to commence; that leave should not be given; and that the wife's application warrants summary dismissal on the basis of the Country B proceedings.
4. The wife contends that this court should deal with her application to divide the husband's superannuation interest as it was excluded from the pool of property divided by the Country B determination, and on the basis that the husband failed to provide adequate disclosure and made false claims about the nature of his contributions being mandatory.
5. Orders made by Senior Judicial Registrar Hiles on 27 August 2025 listed the matter for directions and for the determination of the portion of the husband's response that seeks an order for security for costs.

1. The husband seeks that the wife lodge security for costs in the sum of at least $20,000, in order to cover a potential costs award against the wife for the proceedings up to the next phase, being consideration of the wife's application for leave to commence proceedings pursuant to s 44(3) of the Family Law Act 1975 (Cth) ("the Act") and for the husband's summary dismissal application.
2. The wife opposes the application.

1. The applicant wife relied upon the following documents:

(a) Affidavit of the wife filed 19 September 2025;

(b) Affidavit of the husband filed 9 August 2025;

(c) Affidavit of the wife filed 20 August 2025;

(d) Affidavit of the wife filed 5 June 2025;

(e) Court Order dated 27 August 2025;

(f) Affidavit of Mr C filed 17 September 2025;

(g) Financial Statement of the wife filed 28 May 2025;

(h) Financial Statement of the husband dated 9 August 2025;

(i) Letter requesting issue of subpoena dated 4 September 2025; and

(j) Subpoena to Mr C, Gupta & Co Pty Ltd filed 5 September 2025.

1. The respondent husband relied upon the following documents:

(a) Response to Final Orders filed 9 August 2025;

(b) Affidavit of the husband filed 9 August 2025;

(c) Affidavit of Mr C filed 17 September 2025;

(d) Financial Statement of the husband dated 9 August 2025;

(e) Notice of Objection to subpoena filed 16 September 2025; and

(f) Affidavit of the wife filed 9 July 2025.

1. The parties placed material before the court that was limited in its capacity to inform of the nature of the Country B proceedings.
2. However, they agreed that Exhibit C1, which contains the following documents in Country B accompanied by an English translation, set out the proceedings in Country B (other than as to an application made and withdrawn by the husband):

(a) Partial decision given by the court appointed estate distributor of 17 June 2020;

(b) Decision given by the court appointed estate distributor of 9 September 2022; and

(c) Decision of the District Court of Country B of [...] April 2025 in relation to the appeal from the decision of the estate distributor.

1. The estate administrator appears to have arbitrated the matter, with the District Court functioning as the appeal court from the arbitration.
2. The parties further agreed that the husband's Australian superannuation was treated as an excluded asset from the property division, as were the statutory pension accounts held by the parties in Country B. The husband's Australian superannuation was treated in the same manner as the Country B pensions.

1. The wife asserts that the outcome of the Country B proceedings was grossly unfair to her and alleges that the husband failed to disclose material and was misleading.
2. The decision of the estate distributor noted a prenuptial agreement that excluded shares assets and profits of unlisted companies acquired after 1 January 2016. The result of the decision was, in order to effect an equalisation of included assets, the wife was required to pay approximately Country B currency 40,000 to the husband, along with a further approximate Country B currency 17,000 in respect of the benefit of occupation of their home post separation. The wife separately retained excluded assets, and each also retained pension interests, including the husband's superannuation.
3. The wife appealed to the District Court of Country B, where the court discharged the obligation for the wife to make the Country B currency 40,000 payment to the husband, as it considered that it would have led to an unfair result. Although the wife appealed a number of discrete aspects of the estate distributor's decision, she did not challenge the decision to exclude the husband's Australian superannuation in the same manner as the Country B pensions.
4. As a result, the wife retained from the included assets property to the value of approximately Country B currency 304,000, the husband approximately Country B currency 223,000. Each retained cash assets in the form of bank accounts to a value of about Country B currency 12,000, while the wife retained a liability to the husband of about Country B currency 17,000 in respect of the occupation benefit.
5. The wife also retained a number of excluded assets including real estate and shares in a company.
6. It is against this background that the wife now pursues a division of the husband's superannuation interests in Australia.

1. The application for security for costs is made against the statutory background of s 114UB(1) of the Act that provides that each party will bear their own costs. Section 114UB(2) provides that, provided there are circumstances that justify it doing so, a court may make an order for security for costs as it considers just.
2. In Penfold v Penfold (1980) 144 CLR 311 at [13] the High Court considered that whilst justifying circumstances must be determined to enable a costs order to be made, no "additional or special onus" is placed upon applicants in their pursuit of costs.
3. The relevant considerations to assess the circumstances are set out at s 114UB(3) of the Act and are as follows:

(3) In considering what costs order (if any) should be made, the court must have regard to the following:

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

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

(c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting paragraphs (a) and (b), 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, and in relation to their duty of disclosure under subsection 71B(1), 90RI(1) or 90YJA(1);

(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.

1. As indicated in Medlon & Medlon (No. 6) (Indemnity Costs) [2015] FamCAFC 157; (2015) FLC 93-664 (Strickland J), no single factor takes precedence over any other factor. The trial judge is to exercise their discretion with regard to the weight that is afforded each factor under s 117(2A) (now s 114UB).
2. Rule 12.02 further sets out matters the court is to consider where the costs order is for security for costs. It was to these that the parties directed their attention, as they focus the considerations contained at s 114UB(3) to the issue of security for costs. Rule 12.02 is as follows:

(1) A respondent may apply for an order that the applicant in the proceeding give security for the respondent's costs.

(2) In deciding whether to make an order, the court may consider any of the following matters:

(a) the applicant's financial means;

(b) the prospects of success or merits of the application;

(c) the genuineness of the application;

(d) whether the applicant's lack of financial means was caused by the respondent's conduct;

(e) whether an order for security for costs would be oppressive or would stifle the proceeding;

(f) whether the proceeding involves a matter of public importance;

(g) whether a party has an order, in the same or another proceeding (including a proceeding in another court), against the other party for costs that remain unpaid;

(h) whether the applicant ordinarily resides outside Australia;

(i) the likely costs of the proceeding;

(j) whether the applicant is a corporation;

(k) whether a party is receiving legal aid;

(l) any other relevant matter.

(3) In subrule (1):

respondent includes an applicant who has filed a reply because orders in a new cause of action were sought in the response.

1. Of those matters, the parties focussed on financial circumstances (particularly of the wife), the prospects or merits of the application, the genuineness of the application, whether an order would stifle the litigation, the assertion that the wife has not met her obligations to the husband under the Country B orders, the fact that both are outside the jurisdiction, being residents of Country B without assets in Australia, and therefore the inability to enforce a costs award, and to the likely costs of the proceedings. The wife also directed attention to the issue of the alleged financial conduct of the husband.

1. The wife asserts that the husband received the bulk of the liquid assets of the parties, and that she has been subjected to an unfair outcome in the Country B proceedings, by reason of a grossly unfair distribution in a context of a lack of disclosure and then misleading conduct by the husband. She asserts that she has greater care of the children than the husband does.
2. The wife also points to different positions of the parties as revealed by Financial Statements filed by each. The wife's Financial Statement indicates average weekly income of $1,444 and expenses of $1,912. The Financial Statement sits poorly with the determination of the District Court of Country B as to the assets and liabilities of the wife, the wife disclosing in her Financial Statement net assets of about $10,000 AUD, while the Country B District Court determined that the wife would receive or retain property (excluding certain non-matrimonial property) of over Country B currency 300,000.
3. The wife correctly identifies that she did not receive a net cash benefit from the District Court, as the cash accounts she retained were outweighed by the amount owed to the husband. She is required to pay the husband Country B currency 17,252.40.
4. The wife identifies by her Financial Statement that she retains cash accounts of about $14,000, along with publicly traded shares of about $10,500.
5. The husband claims the same level of expenses but asserts an income of just under $2,600.
6. The wife observes that she is self-represented by virtue of her financial circumstances, while the husband has engaged lawyers, in a context of himself being legally qualified.
7. It may be accepted that the wife will find it difficult to meet an order for security for costs from her own resources, even in a limited amount.

1. This matter was addressed in a limited fashion. As the application has been filed by the wife after the expiration of twelve months from the date of divorce, the wife will require leave pursuant to s 44(3) of the Act, which in turn will require her to demonstrate hardship pursuant to s 44(4) of the Act if leave is not granted. The onus will be on the wife to do this.
2. The wife will be required to do this against a background of the property proceedings in Country B, in which specific consideration was given to the husband's Australian superannuation interest, but which was excluded as it was considered to be analogous to the statutory pension scheme in Country B which was also excluded from the consideration.
3. If the wife were to be permitted to commence the proceedings in Australia, directed as identified by her to the superannuation interest only, she will be required to demonstrate that it is just and equitable to make any adjustment of the parties' interests. Given the parties have completed property proceedings in Country B this may not easily be established by the wife.
4. Key to the wife's proposed litigation, the wife asserts that the husband's Australian superannuation scheme was wrongly categorised as equivalent to an excluded Country B pension scheme. However, while the wife appealed from certain aspects of the decision of the estate administrator, this categorisation not one of those aspects. The wife was partially successful in her appeal, meaning that she received a larger portion of the included property than the husband. However, she made no challenge to the decision to treat superannuation like the pension as a form of excluded property. It is now the superannuation that she intends to litigate about in Australia.
5. This may form an additional impediment to the wife either obtaining leave or successfully prosecuting a case in Australia. Clayton v Bant (2020) 272 CLR 1 points to the potential availability to the husband of a claim estoppel in relation to the determination made as to Australian superannuation by the estate administrator, or an Anshun estoppel in relation to the wife's failure to pursue the claim in the District Court of Country B.[1] The onus will lie upon the husband to establish either estoppel as applicable.
6. The husband has also indicated that he will assert that Australia is, under the circumstances, a clearly inappropriate forum. The merits of that issue are presently unexplored.
7. Under those circumstances it is far from clear that the wife will obtain leave to commence the proceedings out of time.

1. The husband characterises the wife's application as grounded in her dissatisfaction with the Country B proceedings, and her maintenance application in part as an attempt to offset those orders. Both of those matters are apparent on the wife's applications.
2. No submissions were made as to how an application may be considered as other than genuine. If an application was made to harass or to harm, such would not be genuine.
3. Here, while issues may arise as to potential abuse of process, or pursuit for an improper or collateral purpose, such matters were not advanced sufficiently to permit, at this stage, the conclusion that the proceedings are not genuine.

Will an order for security stifle the litigation?

1. Given the limited financial circumstances of the wife, an order may stifle the litigation.

1. The wife has not met her obligation pursuant to the Country B District Court orders to pay the husband Country B currency 17,252.40.

1. Both parties are located in Country B. The husband's capacity to enforce any costs order made against the wife should be considered as considerably compromised by the lack of assets in Australia to meet any such order.

1. The wife asserted financial misconduct on the part of the husband, including as to a lack of relevant disclosure of his superannuation interest in Australia in the Country B proceedings, and as to misrepresentation as to the nature of the payments made by him to that interest. At present, it is far from clear that the husband failed to adequately make disclosure in relation to his superannuation interest, or that he was deceptive in his description of the nature of the payments made toward it.
2. The wife made other claims as to the husband's conduct, including directed to his claim in respect of the family home and for the wife to meet an occupation benefit payment, while the wife asserted that she had financed the home.
3. I am, at this stage, unable to conclude that the husband has engaged in relevant financial misconduct as asserted by the wife.

1. The husband's solicitor estimated a total of about $70,000 costs for the husband to finalise the matter. Although the wife was highly critical of the estimate, and of aspects of the conduct of the proceedings, the estimate was not unreasonable.
2. The husband conceded that, at this stage, security for the whole of the costs is not warranted, given the first phase of the proceedings will involve the question of leave, and questions associated with that. The husband estimated costs, including the work to date, of $30,000 to that point, and sought two thirds of this as security, equating to a reasonable estimate of an allowable amount following assessment.
3. Although the wife was critical of the level of costs accrued by the husband, both the amounts involved and the estimates appeared reasonable.

1. Despite the potential to stifle the litigation there are matters that are sufficient to justify an order for the lodging of security to the next stage of the proceedings. Weighing heavily in favour of an order are the questions as to the wife's prospects of success in the litigation. The wife confronts a number of substantial issues in her pursuit of leave, which leaves significant doubt as to her prospects for success. Further, the wife has not met the order to pay the husband arising out of the Country B proceedings. There is no ready means to enforce a costs award against the wife should the husband receive an award in his favour. These matters attract significant weight and mean that an order for security is just, and should be made in the sum of $20,000, in accordance with the reasonable estimate provided by the husband.

1. Orders will be made staying the proceedings pending the payment of security in the sum of $20,000.
2. In the absence of submissions as to a timeframe for payment, a reasonable period of 56 days will be allowed.
3. In the event that the security is not lodged within 56 days, orders will allow for an application to be made for the dismissal of the application.

I certify that the preceding fifty-five (55) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Gill.

[1] Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589.