A & Z
[2006] FamCA 179
•27 March 2006
[2006] FamCA 179
FAMILY LAW ACT 1975
IN THE FULL COURT OF
THE FAMILY COURT OF AUSTRALIA
AT SYDNEY
Appeal No. EA 98 of 2005
File No. SYF 6790 of 2000
IN THE MATTER OF:
A
Applicant/Wife
- and -
Z
Respondent/Husband
REASONS FOR JUDGMENT
BEFORE:Faulks DCJ, Warnick and Boland JJ
HEARD:27 October 2005
JUDGMENT: 27 March 2006
APPEARANCES:
Mr Broun QC (instructed by Guardian Legal, 2/183 Liverpool Road, Ashfield NSW 2131) appeared on behalf of the Appellant Husband.
Mr Paul (of Paul and Paul Lawyers, 15th floor, Tattersalls Building, 179 Elizabeth Street, Sydney NSW 2000) appeared on behalf of the Respondent Wife.
APPEAL SUMMARY
MATTER:A and Z
APPEAL NUMBER: EA 98 of 2005; SYF 6790 of 2000
CORAM:Faulks DCJ, Warnick and Boland JJ
DATE OF HEARING: 27 October 2005
DATE OF JUDGMENT: 27 March 2006
CATCHWORDS:
PER FAULKS DCJ AND BOLAND J - Whether application for leave to appeal under s 94AA should be dismissed or permanently stayed because of non compliance with, or contraventions of Court’s orders – Distinction between dismissal of an appeal and dismissal of an application for leave to appeal – Consideration of consequences of dismissal of husband’s application – Meaning of undefended hearing - Whether an undefended hearing should be allowed –Balance between effective case management and need to ensure justice between the parties – Husband’s application not dismissed – Whether wife should be provided with security for costs – Requirement for security in the event husband’s application for leave to appeal is unsuccessful is not made out.
PER WARNICK J - Court has inherent jurisdiction to entertain application – The exercise of power is discretionary – A “conviction” not necessary to invoke discretion to stay or dismiss appeal – May not be necessary that contempt be shown on a prima facie basis, however something more than contravention may be required before remedy of stay/dismissal can be invoked – Remedy may be invoked in respect of failure to comply – any evidence of “reasonable excuse” for failure to comply must be considered – Not an appropriate exercise of discretion to stay or dismiss application.
Legislation
Sections 69F, 79, 94AA, 96AA, 112AB, 112AC, 112 AD, 112AP, 117(2) and Parts XIIIA and XIIIB of the Family Law Act (1975) (Cth)
Section 140 of the Evidence Act 1995 (Cth)
Rules 11.02, 11.03, 22.58 and Part 22.8 of the Family Law Rules 2004
Order 4 Rule 1A of the Family Law Rules 1984
Order 10 rule 7 of the Federal Court Rules
Case law
Abbott and Abbott (1999) FLC 92-582
Allesch v Maunz (2000) 203 CLR 172; (2000) FLC 93-300
Australian Securities Commission v MacLeod (1994) 130 ALR 717
Birkett v James [1978] AC 297
Chang and Su (2002) FLC 93-117
Dickson and Dickson (No 2) (1999) FLC 92-857
Fahmi v Fahmi (1995) FLC 92-637
Hadkinson v Hadkinson [1952] 2 All ER 567
J and J [2000] FamCA 729
Lanceley and Lanceley (1994) FLC 92-491
Lenijamar Pty Limited and Ors v AGC (Advances) Limited (1990) 98 ALR 200
Luakdaka and Luakdaka (1998) FLC 92-830
Malpass and Mayson (2000) FLC 93-061
Marchant v Dunlop (1927) 44 WN (NSW) 108
Permewan Wright Consolidated Pty Ltd v A-G (1978) 35 NSWLR 365
State of Queensland & Anor v JL Holdings State of Queensland v JL Holdings (1997) 189 CLR 146
Tate v Tate (2000) FLC 93-047
X Ltd v Morgan-Grampian Ltd [1990] 2 All ER 1
Young v Jackman (1986) 11 Fam LR 331
APPLICATION DISMISSED
FAULKS DCJ AND BOLAND J:
Introduction
This is an application brought by the wife in an Application in a Case filed in proceedings commenced by the husband in the Full Court in which he seeks leave to appeal under s 94AA of the Family Law Act 1975 (“the Act”) against interlocutory orders made by Le Poer Trench J on 16 August 2005. Subsequent to that application the wife filed, on 27 October 2005, a document described as Amended Response to an Application in a Case.
The wife seeks a number of orders in her Amended Response. In summary, the wife seeks that the husband’s leave to appeal, and appeal if leave is granted, should be dismissed, or permanently stayed. In the event that the husband’s application proceeds, then the wife seeks security for costs of the appeal. The significance of the wife’s application, if successful, is that her application under s 79 of the Act will be determined shortly on an undefended basis.
At this stage we note that the wife also seeks payment to her of a sum by way of interim costs, the characterisation of which she seeks should be determined by the trial Judge. During the hearing before us we indicated that this was an application which should properly be made at first instance, and was not an application which we would entertain.
The husband’s counsel orally opposed the orders sought by the wife, and relied on an affidavit sworn by the husband’s solicitor Mr L on 25 October 2005.
Before us the wife relied on the Court’s inherent power to dismiss the husband’s application. The wife’s application requires a consideration of whether the husband’s application should be dismissed or permanently stayed because of non compliance with, or contraventions of the Court’s orders, including orders to enable the substantive proceedings to be determined in a timely, cost effective way.
This argument requires some examination of the asserted breaches of orders, and/or any excuse or mitigating circumstances relied on by the husband.
Procedural history and background
In order to understand the matters in issue before us, it is necessary to set out a summary of procedural history and some background of this matter as disclosed in the trial Judge’s judgment, and from the material before us.
On 16 August 2005 Le Poer Trench J made interlocutory orders which are the subject of the husband’s application to the Full Court. They are as follows:
1.“I make orders pursuant to paragraphs 1, 2 and 4 of the Minute of Order filed in Court today by the applicant wife as set out hereunder: -
1.That the husband do forthwith pursuant to Section 203A of the Corporations Act tender to the registered office of [the Australian company] a letter of resignation as director of the company.
2.That the husband do forthwith tender to the wife’s solicitors a letter of resignation as secretary of the Company.
4.(sic) That the husband’s solicitors authorise the Registrar General to accept from the wife any application for the issue of a new or replacement Certificate of Title [ ].
2.The husband within 14 days cause to be delivered to the wife’s solicitors the Certificate of Title [for the south Sydney property]
3.In the event of the husband failing to comply with order 2 hereof within the time stipulated then the husband is to immediately sign all documents tendered to [G] Legal as may be necessary to transfer to the wife the whole of his right, title and interest in the [south Sydney property].
4.Upon the transfer being effected to the wife of the husband’s interest in [the south Sydney property] the wife is to hold her interest in that property upon trust for the parties pending further order of the Court.
5.Pending further order the wife be restrained from dealing with her interest in the [south Sydney property] as required pursuant to these orders otherwise than as ordered by the Court.
6.In the event of the husband failing to sign and return documents produced the [G] Legal pursuant to order 3 hereof within 10 days of delivery of the documents to that Firm the Registrar upon application by the wife is empowered to sign pursuant 106A of the Act all documents to necessary to effect the transfer of title to the wife in the name of the husband.
7.Pending further order the husband be restrained as follows : -
(a)From exercising any duties, obligations or rights as a Director of [the Australian company] otherwise than as requested by the wife.
(b)Dealing with any payment due to or paid to him as a result of the winding up of [the Hong Kong company]
(c)Any funds received as a result of his dealing with the [south Sydney property].
8.Pending further order the wife is to act as the sole Director of [the Australian company].
9.The wife forthwith do all acts and things and execute all such documents which are necessary so as to cause to be withdrawn from the accounts of the Australian Company with the Bank of China, York Street, Sydney and transferred to the credit of the Trust Account of [P and P] Lawyers [ ] all of the funds standing to the credit of the company in that account.
10.Pending further order [P and P] Lawyers are to hold any funds received pursuant to order 9 hereof in trust for the company and the parties.
11.That the matter be set down for hearing as an undefended final hearing for 1 day as soon as possible.
12.That the wife’s solicitors cause to be delivered to my Associate within 7 days a list of all documents filed which the wife seeks to rely upon in the undefended hearing.
13.I reserve my reasons and will provided reasons for judgment in relation to proceeding on an undefended basis and the orders made today as soon as possible.
14.In the event of the husband failing to sign documents required by paragraphs 1, 2 and 4 of the Minute of Order filed in Court today within 10 days of the date hereof then the Registrar of the Court is appointed pursuant to section 106A to execute any documents or instruments to give effect to those orders in the name of the husband.
15.I reserve the wife’s costs.”
On 1 September 2000 the wife filed an application seeking property settlement orders under s 79 of the Act. It appears the wife filed an interim application and affidavit at the same time as she filed her application for final orders.
In her affidavit the wife deposed to the parties being sole directors and shareholders of TUD Pty Ltd (“the Australian company”) and TUD Limited (“the Hong Kong company”). The wife asserted the Australian company had funds of AUD$1,210,580 held in the Bank of China. She further asserted the husband and wife each had credit loan accounts with the Australian company in the amount of $610,340. The financial statements for the Australian company as at 30 June 1999, which were annexed to the wife’s affidavit, disclosed the husband had a credit loan account of $610,340 and the wife’s credit loan account was $610,340.
On 4 September 2000 the husband caused two affidavits to be filed. In one affidavit he responded to assertions made in the wife’s affidavit about the parties’ assets, and in particular, disputed the wife’s assertions about the parties having credit loan accounts with the Australian company. He asserted the Australian company did not owe funds to the parties, but rather it owed funds to the Hong Kong company.
In his affidavit the husband asserted the Hong Kong company was established in 1994 and that he contributed capital of US$240,000 and the wife contributed capital of US$60,000.
The husband asserted that in 1996 the Hong Kong company was restructured, that the Australian company was incorporated, and the Hong Kong company lent the Australian company US$699,970 to fund the operation of the Australian company. The husband further asserted there was an agreement between the parties for the funds advanced to the Australian company to be repaid to the Hong Kong company by way of instalments. The husband did not dispute the holding of the sum of AUD$1,200,000 in the Bank of China but asserted the funds were “frozen” and the bank would not allow him to transfer funds out of the account.
The husband asserted in 1997 the Australian company lent the parties AUD$350,000 to purchase a home unit in south Sydney (“the south Sydney property”). The unit was purchased in the husband’s sole name.
The husband asserted the wife owns two units in China. He said funds to purchase one of the wife’s properties in China were acquired with borrowings from the Hong Kong and Australian companies.
On 4 September 2000 Lawrie J made a number of orders, and made injunctions in the following terms:
“1.That until further order, orders are made in accordance with the Wife’s application filed 1 September 2000 in accordance with paragraphs 1, 2, 3, 4 and 5 as set out hereunder: -
·Order, pending further order, that the husband be restrained from disposing, encumbering or otherwise dealing with any deposit or fund of [the Australian company] in excess of $5,000.00 held by the Bank of China, or any other financial institution in Australia or elsewhere, save in the usual course of business and upon the provision of not less than 3 working days notice in writing to the solicitors for the wife specifying full particulars of such proposed transaction including the proposed date, amount, nature of the transaction and particulars of the underlying obligation or requirement causing such payment.
·Order, pending further order, that the husband be restrained from disposing, encumbering or otherwise dealing with any deposit or fund of [BTUS] Co Incorporated in excess of $5,000.00 held by the Bank of China, or any other financial institution in Australia or elsewhere, save in the usual course of business and upon the provision of not less than 3 working days notice in writing to the solicitors for the wife specifying full particulars of such proposed transaction including the proposed date, amount, nature of the transaction and particulars of the underlying obligation or requirement causing such payment.
·Order, pending further order, that the husband be restrained from disposing, encumbering or otherwise dealing with any deposit or fund of [the Hong Kong company] in excess of $5,000.00 held by the Bank of China, or any other financial institution in Australia or elsewhere, save in the usual course and upon the provision of not less than 3 working days notice in writing to the solicitors for the wife specifying full particulars of such proposed transaction including the proposed date, amount, nature of the transaction and particulars of the underlying obligation or requirement causing such payment.
·Order, pending further order, that the husband be restrained from doing any act or thing or issuing any direction, instruction or authority which would interfere or restrict the right of the wife to continue to utilise credit card facilities provided to:
·[the Australian company];
·[BTUS] Co Incorporated, Beijing;
·[the Hong Kong company], Hong Kong any financial institution.
·Order, pending further order, that the husband be restrained from disposing of, encumbering or otherwise dealing with any interest in the [south Sydney property] in the State of New South Wales being the land comprised in Folio Identifier.
…
5.That the wife be restrained from disposing of or encumbering or otherwise dealing with any interest in any real property situated in Beijing or any other part of China.”
On 5 October 2000 the husband’s present solicitors, M and Company, filed a Notice of Ceasing to Act. On and from 13 October 2000 the husband was represented by RY & Co. The wife also changed solicitors on two occasions in the period from September until November 2000. The wife’s present solicitors commenced acting on her behalf on 11 November 2002.
On 18 November 2002 the husband filed an Application in a Case seeking exclusive occupation of the unit which he had occupied following the parties’ separation. The husband asserted the wife broke into the unit in October 2002 whilst he was overseas. This application was filed on his behalf by M and Company.
On 16 December 2002 the wife was granted exclusive occupation of the unit.
On 8 January 2003 a decree nisi of dissolution of the parties’ marriage was pronounced.
On 22 January 2003 a third firm of solicitors filed a Notice of Address for Service for the husband.
On 5 February 2003 the husband was ordered to file and serve a Statement of Financial Circumstances by 24 February 2003. On 26 February 2003 a fourth firm of solicitors filed a Notice of Address on behalf of the husband. On the same day the solicitors filed the husband’s Statement of Financial Circumstances. The trial Judge noted the Statement of Financial Circumstances disclosed the husband had withdrawn AUD$107,520 which he asserted was salary. His Honour said “As best I can determine this contravened the orders made by Lawrie J on 4th of September, 2000”.
On 17 March 2003 the parties were granted an extension of time to file affidavits, which were to be filed seven days prior to the Pre-Trial Conference which was fixed for 25 November 2003.
On 17 September 2003 orders were made, including the following orders:
“2.That orders be made in accordance with the handwritten minute filed in Court today, signed by me and placed with the Court papers as set out hereunder: -
1.That the application of the husband filed 25 July 2003 be dismissed.
2.That each party file an affidavit of documents on or before 7 November 2003.
3.That until further order the First Respondent be restrained from dealing in any way with his interest in [the Australian company] and [the Hong Kong company] except for the purpose of drawing $4,000.00 per month therefrom towards his living expenses and for the purpose of complying with Order No 4.
4.…
5.That until further order the wife have the exclusive use and occupation of the [south Sydney property] and that the husband be restrained for (sic) being in or upon the unit or the common property appurtenant thereto.
6.…
7.That the Court noted the undertaking of the wife as to damages she being present in Court.
8.…
9.That the second respondent file and serve :-
(1)a Response to the Further Amended Application filed 4 September 2003.
(2)…
within 28 days of these orders.
10.Note that the Second Respondent makes no admission that the First Respondent has any interest in [the Australian company]
11.…
12.That the Applicant and First Respondent do within seven days provide the Second Respondent with copies of all documents filed by them in the proceedings.
13.Liberty to all parties to apply in relation to Order No 9.
14.Leave to all parties to file affidavits of Evidence no later than seven days prior to the Pre Trial Conference date.”
3.That the matter be adjourned to the Judicial Registrar’s List at 10.00am on 10 November 2003.
4.That the application filed by the husband on 25 July 2003 be dismissed.”
It is not clear from the trial Judge’s reasons who was, or is, the Second Respondent, and when such Respondent was joined to the proceedings.
On 10 November 2003 a further Trial Notice issued. On that day orders were made by the Judicial Registrar as follows:
1.“That an order be made in accordance with paragraph 4 of the wife’s amended response filed in Court today and as set out hereunder:-
‘4.That the husband and/or the wife forthwith sign all authorities, cheques and such documents and forms as the Bank may require so as to forthwith transfer to the Trust Account of his solicitors the whole of the funds held in all of the banking accounts of [the Hong Kong company] and that he do not thereafter draw upon same without the leave of the Court.’
2.That pursuant to s 106A(1)of the Act, the Deputy Registrars of this Court are authorised to do all acts and things and execute all documents in the name of the husband to give effect to the said paragraph 4.
3.That all costs be reserved.
4.That by consent the Pre-Trial Conference listed for 25 November 2003 be vacated.
5.That the parties have leave to approach the Deputy Registrar and request issue of a new Trial Notice and appointment of a Pre- Trial Conference.
IT IS NOTED:
6.That the applicant wife undertakes through her solicitor to abide by any order the Court might make in relation to damages in the event the Court should hereafter be of the opinion that the respondent shall have sustained any such damage by reason of these orders which the applicant ought to pay.”
On 16 December 2003 the wife commenced proceedings in the High Court of Hong Kong seeking orders for the winding up of the Hong Kong company. She also commenced proceedings in the Hong Kong court seeking registration of the orders made by Judicial Registration Johnston on 10 November 2003.
There was non compliance by the parties with directions for filing affidavits as provided in the trial notice and the matter was listed in the Defaulter’s List on 13 August 2004 when further orders were made for filing of affidavits and Statements of Financial Circumstances.
On 1 September 2004 the wife’s application for expedition came before the trial Judge. On that day M and Company filed an affidavit on behalf of the husband in which he deposed to having returned to Hong Kong to seek specialist legal advice about the orders sought by the wife. The trial Judge also recorded:
“59The husband alleged in the affidavit that he had discovered “huge deficit” in the [Hong Kong] company of $4,729,757. Hong Kong dollars, This was money, he said, was due to a related company. He effectively alleged that the wife had fraudulently misrepresented the true position of loan accounts in the company.
60The husband said that in July 2003 he had discovered the wife had not disclosed the income of Hong Kong dollars of $988,968. to the Inland Revenue Department of Hong Kong. The husband said that in April 2004 he reported the matter. He claimed the wife had attempted to cover up irregularities.”
On 10 September 2004 the trial Judge made a number of orders including orders for the husband to file his affidavit of evidence in chief, any other affidavits and his Statement of Financial Circumstances by 11 October 2004. The trial Judge noted:
“48On the 14th of October 2004 I first raised with the husband’s legal representative the possibility that in the event of the husband failing again to file his principal affidavit I would thereafter consider any application of the wife for the matter to proceed undefended. The wording of the orders made that day indicate I was anticipating such an application from the wife if the husband failed to comply.”
On 14 October 2004 the husband was granted an extension of time to file his affidavit of evidence in chief. That affidavit was filed on 26 October 2004.
On 9 May 2005 the husband was hospitalised in S Provincial People’s Hospital.
On 22 June 2005 the husband’s present solicitors made an application to the Court to “stay” the proceedings because of the husband’s hospitalisation. It appears the husband has not prosecuted that application.
On 4 July 2005 the trial Judge made an order that the husband be medically examined by a medical practitioner appointed by the wife.
On 27 July 2005 a Notice of Assessment addressed to the Australian company’s registered office was issued from the Australian Tax Office (“ATO”) for year ended 30 June 1999 requiring payment of $424,459.80. The wife asserted that she was not consulted about a change of address to the registered office of the Australian company. On 4 August 2005 the sum of $424,459.80 was paid from the Australian company’s account with the Bank of China to the ATO.
The trial Judge noted a letter tendered to him dated 9 August 2005 from BT, Hong Kong. It appears BT are the liquidators or otherwise associated with the liquidation of the Hong Kong company. The letter revealed BT received information from the husband on 8 July 2005 and a Statement of Affairs dated 1 August 2005. The trial Judge noted “[t]hus is appears the husband has been well enough the (sic) cope with this aspect of his affairs.”
On 9 August 2005 the trial Judge made the following orders:
“1.I note Mr [C], solicitor appears today for the husband.
2.I Order Mr [C] to file and serve a Notice of Address for Service for the husband by the 12th of August 2005.
3.I note the contents of an affidavit filed by the wife in Court today which contains as annexures “C” and “D” a report relating to an attempted medical examination of the husband. Such medical examination was organised following orders made by myself on the 4th of July 2005 requiring the husband to submit himself to a medical examination.
4.I note I have been told by Mr [C] that he is instructed the husband has a different view of what happened when the attempted medical examination occurred as recited in the affidavit referred to earlier in these orders.
5.I adjourn this matter to 9.00am on the 16th of August 2005 for the possible hearing of the matter on an undefended basis.
6.I note I intend, in the absence of further evidence from the husband persuading me that a contrary procedure would be required, to hear on a final basis the wife’s case for final property orders on the 16th of August 2005. Should I do so I will give reasons for dealing with this matter on an undefended basis on that occasion.”
After asserted initial refusal of the husband to see the medical practitioner appointed by the wife, the medical practitioner again attended the S Provincial People’s Hospital, China on 11 August 2005. The medical practitioner saw, but did not examine the husband. The medical practitioner was provided with medical records relevant to the husband. The parties are in dispute about the qualifications of the medical practitioner appointed by the wife, and the events which occurred when that medical practitioner visited the hospital.
On 16 August 2005 the trial Judge made the orders which led to the husband’s application for leave to appeal, and the wife’s amended response for dismissal or permanent stay of the husband’s application.
The basis for dismissing the husband’s application
We propose to examine issues relevant to the dismissal of the husband’s application for leave to appeal on the basis of an asserted breach of the Court’s orders. That examination requires our consideration of the trial Judge’s reasons for judgment, and the wife’s submissions. It also requires some examination of case management principles and natural justice. We deal with the application for security for costs as a discrete topic.
Evidence and submissions
The wife’s evidence
The wife’s solicitor in his written summary of argument seeks to rely on the following applications and affidavits in support of the orders sought by the wife:
·the wife’s Response filed 2 September 2005;
·the wife’s Amended Response dated 11 October 2005;
·the wife’s Application filed 20 September 2005;
·the wife’s affidavit sworn 22 March 2005;
·the wife’s affidavit sworn 1 September 2005;
·the affidavit of the wife’s solicitor sworn 1 September 2005;
·the affidavit of the wife’s solicitor sworn 20 September 2005; and
·the wife’s Application filed 20 September 2005.
The wife’s submissions
The wife’s submissions raise three discrete areas relied on by her to support the orders she is seeking. In summary they are:
·issues relating to the husband’s failure to comply with orders relating to the appointment of the single expert;
·asserted breaches by the husband of orders, including injunctions, made during the course of the proceedings; and
·failure to comply with directions for the preparation of the proposed appeal, including filing of appeal books within the time ordered.
The wife’s solicitor submits that the order for the appointment of a single expert was made over twelve months ago, but has been ineffective by reason of the husband’s actions. The trial Judge at paragraph 79 of his reasons notes:
“a letter from [Accountants] dated the 21st of April 2005 which notes that husband has returned a signed Terms of Engagement document where the husband had made alterations which were unacceptable to the Single Expert Mr [M]. Also annexed is a letter from [A] Legal to Mr [M] received on the 28th of April 2005. The letter advises the husband had paid AUD$5,143.37 to the Expert’s account. The letter argues that the changes sought by the husband in the Terms of Engagement are reasonable and/or are simply comments. No unconditional authority has been signed by the husband. On the 27th of April 2005 the Expert [Mr M] wrote to [A] Legal and to [P and P] Lawyers in relation to the husbands (sic) comments on the Experts (sic) appointment documents and the letter from [A] Legal referred to earlier in these reasons. He pressed for his original document to be signed by the husband. In a facsimile to the wife’s solicitor dated the 2nd of May 2005 Mr [M] said he had received a 36 page facsimile from the husband. The husband had asked that the Mr [M] communicate directly with him. Mr [M] declined to do that. The wife’s solicitors wrote to the husband’s solicitors on the 3rd of May 2005 objecting to direct communication between the husband and the Court Expert. Notwithstanding that complaint the husband sent a 27 page facsimile to the Court Expert on the 7th of May 2005. The Court Expert pointed out the husband still had not signed his Terms of Engagement document in a form acceptable to the Court Expert. Further correspondence shows that as at 30th of May 2005 the husband still had not signed the Terms of Engagement document.”
The wife particularises asserted breaches by the husband of orders made by the Court to include:
·withdrawal of $197,520 contrary to the orders of Lawrie J;
·failure to direct the Bank of China to forward statements to the wife’s solicitors;
·failure to pay the costs ordered by the Full Court of $3,491.30 on 4 May 2005;
·payment of $424,459.80 to the ATO contrary to orders of Lawrie J; and
·failure to comply with orders of Boland J made at the procedural hearing of the husband’s application for leave to appeal the orders of the trial Judge made 16 August 2005.
In regard to the last asserted breach we note this application was made when the husband was one day late in filing his appeal books, and the husband’s solicitor had failed to relist the matter as provided for in Boland J’s orders. Counsel for the husband conceded the failure by the husband’s solicitor to relist the matter in a timely manner was inappropriate and a discourtesy to the Court. We accept this failure of itself would be insufficient to ground the relief sought by the wife.
The wife’s solicitor submitted that the Court should not exercise its discretion in favour of the husband because of:
·his breaches of the orders of Lawrie J;
·his failure to comply with the orders for the appointment of the single expert;
·his failure to submit to a medical examination;
·the significant and ongoing costs incurred by the wife; and
·the lack of certainty as to when the husband would be in a position to conduct the appeal or travel to Australia for the final hearing.
The husband’s evidence
The husband’s solicitor deposed to receiving limited instructions from the husband who is in China. He said that he received instructions via a lady named CW. Mr L deposed to the husband suffering a sudden illness and being hospitalised on 9 May 2005. He annexed to his affidavit a doctor’s certificate from the S Provincial People’s Hospital dated 13 September 2005 and a translation of that document. The translation of the certificate records, inter alia, the husband’s diagnosis and advice on discharge on 13 September 2005 as follows:
“Discharge diagnosis:
1.Lacunar infarction;
2.Type II diabetes, diabetic ophthalmopathy, diabetic neuropathy;
3.Hypertension;
4.Vertebrobasilar insufficiency;
5.Cervical spondylosis;
6.Atherosclerosis;
7.Hyperplasia of prostate;
8.Lumbar vertebra hyperosteogeny
…
Doctors instructions:
1.Continue medical treatment; subject to regular follow-up visits from our outpatient department; pay regular visits to this hospital for examinations; suggest taking a full-time rest for three months.
2.Rest and recuperate in an environment without any external interference and avoid direct contact with matters that would lead to emotional excitement and increase in blood pressure.
3.Avoid tiredness, avoid paperwork and avoid long journey.
4.Continue taking medicines to lower the blood pressure, dilate the blood vessels and lower the blood glucose level; continue the treatment with regular oxygen inhalation and protection of brain cells.”
The husband’s solicitor further deposed that the husband only received the trial Judge’s reasons for judgment on 20 September 2005, and was unable to get an immediate translation of the judgment. The husband anticipated the translation of the judgment would not be available until 21 October 2005.
Mr L also deposed to difficulty in settling a draft index for the appeal books by reason of his lack of knowledge of the husband’s affidavit material to be included in the appeal books. He indicated that the husband should be in a position to commence preparing an affidavit to be relied on in support of his application for permission to appeal the orders of the trial Judge by 13 December 2005 and to submit the affidavit by 21 February 2006 at the earliest, but more likely by 21 March 2006. He also deposed to advice received by him from a third party that the husband did not have the funds to pay legal costs, and needed more time to raise such funds from family and friends.
Mr L annexed to his affidavit statements purported to have been made by persons who were present when the doctor appointed by the wife to examine the husband attended at the S Provincial People’s Hospital. A significant portion of Mr L’s affidavit comprised hearsay material.
The husband’s submissions
The husband’s counsel submitted that the husband’s application for leave to appeal could not be said to be hopeless, although he conceded the husband had a “lot of explaining”. Essentially the husband’s counsel relied on three matters in opposition to the wife’s application:
·the lack of adequate notice of the listing of this application;
·the provision by the husband of the medical certificate; and
·the seriousness of shutting the husband out of the final hearing.
He conceded that the wife was put in a difficult position.
The wife’s application to permanently stay or dismiss the husband’s leave to appeal application based on breach of Court orders
The wife’s solicitor filed the application leading to these proceedings one day after the expiration of the due date for filing of the appeal books by the husband. In these circumstances, he does not seek, nor could he seek to rely on rule 22.56, which rule deems an appeal (but not an application for leave to appeal) to be abandoned if 28 days after appeal books are ordered to be filed an appellant fails to file the books.
Although the wife’s solicitor initially sought that the leave to appeal application be “struck out”, by the time of the hearing before us he sought dismissal of the husband’s application or a permanent stay of that application. He did not in his written submissions, or in his oral submissions before us, seek to rely on rule 22.58 of the Rules (which rule applies to appeals) and/or rule 11.02, rather, he relied on “the common law position and the inherent jurisdiction of the court (sic) in financial matters”. He submitted:
“The general rule is that a person who is (sic) breach of an Order of the court will not ordinarily be allowed to institute later proceedings in that court until he or she has perjured (sic) himself or herself of contempt.”
He referred to and relied on the decision of Young J in Young v Jackman (1986) 11 Fam LR 331.
Discussion about undefended proceedings – dismissal or permanent stay of husband’s application
The Rules
In our determination as to whether or not the husband’s application to seek leave to appeal should be dismissed or that his application be permanently stayed, we consider it is necessary to discuss and consider the concepts of dismissal, permanent stay and undefended proceedings. We acknowledge in this discussion we are not dealing with dismissal of an appeal, but an application for dismissal of an application for leave to appeal. Whilst that distinction may appear technical, it is necessary to note that, prima facie, Part 22.8 of the Rules deals only with concluding appeals, and does not specifically refer to applications for leave to appeal.
Section 96AA of the Act was inserted in 2005. It provides as follows:
“If it appears to a court hearing an appeal under this Part that the notice of the appeal does not disclose proper grounds of appeal (whether generally, or in relation to a particular ground of appeal), the court may order that the proceedings on the appeal be stayed or dismissed (either generally or in relation to that ground).”
We will return to discuss this section. It is however relevant to note the power to dismiss is confined to a court hearing the appeal.
The Court’s powers in respect of case management are set out in Rule 11.02. They are as follows:
“(1)If a step is taken after the time specified for taking the step by these Rules, the Regulations or a procedural order, the step is of no effect.
(2) If a party does not comply with these Rules, the Regulations or a procedural order, the court may:
(a)dismiss all or part of the case;
(b)set aside a step taken or an order made;
(c)determine the case as if it were undefended;
(d)make any of the orders mentioned in rule 11.01;
(e)order costs;
(f)prohibit the party from taking a further step in the case until the occurrence of a specified event; or
(g)make any other order the court considers necessary, having regard to the main purpose of these Rules (see rule 1.04).”
It appears from the trial Judge’s judgment that he set the wife’s application down for an undefended hearing based primarily on this rule.
It is not clear, however, on the material before us whether, when the wife sought to have her application heard as an “undefended” application, she sought an order that the Court dismiss the husband’s response as part of her then application.
Rule 11.02 is founded on a failure to comply with a procedural order. The rule requires as a prerequisite non-compliance with Rules, regulations or a procedural order. The rule does not provide such non-compliance must be proved in contravention or contempt proceedings. The prima facie severity of the rule is ameliorated by the provisions of rule 11.03. The Explanatory Statement to the rule makes it clear the Court retains a broad discretion in applying rule 11.03.
We are satisfied that this rule, which provides non-compliance with procedural orders, is not directly applicable to appeals or the exercise of the Court’s inherent power to summarily dismiss or permanently stay an application for leave to appeal or an appeal.
Undefended proceedings
It appears to us that we cannot properly determine, in the exercise of our discretion, whether we should dismiss the husband’s application pursuant to the Court’s inherent jurisdiction without some consideration of the consequences of such dismissal. That consideration must involve what is meant by an undefended hearing in this case. The term “undefended hearing” is not defined in the Dictionary to the Rules. Although not part of the Rules, the Explanatory Guide to the Rules explains the term “undefended basis” as follows:
“the court may order that a hearing or trial may proceed, because of the respondent’s failure to comply with a rule or order, as if a response has not been filed. The court may make the orders set out in the application on being satisfied by evidence that the orders should be made.”
Rule 11.02(c), which we have already set out, provides the Court may “determine the case as if it were undefended”.
In Abbott and Abbott (1999) FLC 92-582, the Full Court dealt with a complaint that an application for dissolution of marriage (as it was then known) was dealt with on an undefended basis. Fogarty, Baker and Kay JJ, dealing with undefended proceedings said at 81,772-81,773:
“It appears to us that the terms ‘undefended’ and ‘defended’ are used in this context as the obverse of each other and are intended to cover the whole spectrum of the hearing of divorce applications. The only qualification to that would ordinarily be ex parte applications which would normally not be described as either ‘defended’ or ‘undefended’, but that would have no practical application in the context here.
The Macquarie Dictionary defines ‘defended’ to include ‘to contest (a legal charge, claim, etcetera); to enter or make a defence’; and ‘undefended’ to include ‘(1) without defences or protection, not defended; (2) (of a legal action) not defended by counsel; having no defence put forward’.
The Shorter Oxford English Dictionary defines ‘defend’ in relation to Law to include ‘to deny, repel, oppose the plaintiff’s plea, the action raised against him; to make defence, to vindicate (himself, his cause); to take legal measures to vindicate; to appear, address the Court, etcetera, in defence of’ whilst ‘undefended’ is defined in relation to Law as ‘not assisted by legal defence; against which no defence is raised’.”
Their Honours, having noted the husband had not filed a response, but had sought to be heard, concluded at 81,774-81,775:
“It appears to us that a proceeding will be treated as ‘undefended’ where the respondent does not challenge or put in issue any of the components of the cause of action in question. The fact that the respondent is opposed to the Court making the order in question and/or wishes to defend the granting of the order which is sought does not make the proceedings defended if the issues raised by the respondent are irrelevant to the issues constituting the cause of action.
…
The test here is analogous to that stated by Dixon J in Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91:-
‘A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury. The fact that a transaction is intricate may not disentitle the court to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abuse of process or is vexatious. But once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process.’”
The term undefended proceedings was also referred to in Lanceley and Lanceley (1994) FLC 92-491. The Full Court considered the position of a respondent who took no active part in proceedings. Barblett DCJ, Frederico and Lindenmayer JJ said at 81,104:
“A respondent who merely wishes to ask the court to dismiss the appellant’s application (and seeks no other order) and who wishes to place no evidence before the court, but who wishes to submit that the application should be dismissed even on the applicant’s evidence, is certainly not obliged by the Rules to file any answer or affidavit, but only a Notice of Address for Service. However, if such a respondent then attends the hearing and in fact makes no submissions against the application (as the husband did in this case) then, in anyone’s language, the application is ‘undefended’ or ‘unopposed’.
Unlike some other jurisdictions, such a circumstance does not and cannot lead, in this Court, to a ‘judgment by default’ in favour of the applicant, because the Court must still decide, on the evidence before it, that the applicant is entitled, in law, to the relief claimed and that, in the exercise of its discretion, it is appropriate to grant that relief. Nevertheless, the proceedings in such a case are clearly ‘undefended’, and it would be a misuse of language to describe them otherwise. They certainly could not be described as ‘defended’.”
The question of the nature of undefended proceedings was also considered in Tate v Tate (2000) FLC 93-047. In this case the husband sought leave to appeal against the trial Judge’s decision to dismiss his response, and subsequently her refusal to allow him to cross examine the wife when the proceedings were listed for an undefended hearing. The Full Court (Nicholson CJ, Kay and Waddy JJ) referring to Lanceley, concluded that the dismissal of the husband’s response (Form 7A) “did not put the husband in any worse position than a litigant who had not even filed a Form 7A”. Their Honours considered Drummond J’s reasoning in Australian Securities Commission v MacLeod (1994) 130 ALR 717. In that case Drummond J said at 721-722:
“In my opinion, where final judgment is sought against a respondent pursuant to O. 10, r. 7(1)(b) on the ground that he is in default in complying with directions given under the order, the applicant must support its motion for judgment with material in legally admissible form sufficient to prove not only that the Court has jurisdiction in the matter and that the circumstances are such as to justify the grant of this discretionary remedy, but also all the facts necessary to prove its entitlement to the relief claimed under the judgment applied for. An application for ‘judgment’, rather than for ‘an order’, pursuant to O. 10, r. 7(1)(b) is an application for final rather than interlocutory relief. It is therefore a proceeding which constitutes a ‘trial’ within the meaning of that term in O. 1, r. 4. It follows that all facts must be proved by direct, as opposed to hearsay, evidence, since O. 33, r. 2 has no application to such a proceeding. See Warea Pty Ltd v Waterloo Industries Pty Ltd (1986) 66 ALR 537 at 539.
I recognise that in theory to so hold means that a recalcitrant respondent will be able to put an applicant for judgment to proof by appearing on the application and cross-examining, after notice has been given requiring the attendance of the applicant’s witnesses; such a proceeding could become very protracted indeed. But, as with all procedures enabling a party to bring an action to an end summarily, judgment can only properly be applied for under the rule in a clear case. In such a case, it will generally be fairly plain whether the respondent who wants to cross-examine all and sundry is engaging in delaying tactics: the Court has power to deal with that. For example, under O. 14, r. 9(3), the Court has power to allow an applicant to rely on an affidavit even though the deponent has not attended for cross-examination despite appropriate notice and, notwithstanding the generally restrictive approach the Court has taken to O. 33, r. 3, as to which see Pearce v Button (1986) 8 FCR 408, it will often be appropriate on such an application for judgment to exercise in favour of the applicant the dispensing power conferred on the Court by O. 33, r. 3.”
The Full Court rejected Drummond J’s approach and said at 87,712:
“In the exercise of its jurisdiction under the Family Law Act, this Court ought in the exceptional case where a matter is ordered to proceed ‘undefended’, not follow the approach adopted by Drummond J (above). The Family Court of Australia is all too frequently confronted with litigants who fail in their duties of full and frank (and prompt) disclosure of their financial affairs. Where such failure results in a Form 7A being struck out, as here, then that party ought have no further right to be heard without further order of the Court which is a matter for the judge in his or her discretion.”
We do not understand the Full Court to have been saying that in an undefended hearing an applicant does not have to put appropriate evidence before the Court in proceedings under s 79 to satisfy the Court that the orders sought are just and equitable having regard to the provisions of s 79(2). Rather, we read the Full Court’s remarks to be directed, in exceptional cases, to the removal of the right of the defaulting party to cross-examine at the hearing.
The trial Judge, having regard to rule 11.02 and the relevant case law, in the exercise of his discretion formed the view that this case fell within the category “exceptional cases” referred to in Tate. It follows if the husband’s application for leave to appeal against the trial Judge is dismissed, or permanently stayed, that one consequence for the husband will be that he will not be permitted to cross-examine the wife or her witnesses at the hearing.
The present case law does not illuminate the situation if the husband’s response has not been dismissed. It would appear, if weight is given to the Explanatory Guide, the husband’s response would not be taken into account by the trial Judge. There may be some conflict between the Explanatory Guide and the requirements of s 79(2) in which case the latter must prevail. Further, there is no dispute that the husband has filed his affidavit of evidence in chief and a Statement of Financial Circumstances. The Act, Rules, Explanatory Guide and authorities are silent on the status of these documents in undefended proceedings. Before us the husband’s counsel indicated this material would require updating before the trial. The question of the status and weight, if any, to be given to such material is relevant.
In Chang and Su (2002) FLC 93-117 Finn, Kay and Dawe JJ concluded a trial Judge had discretion under the then rule dealing with the requirement of notice for cross-examination (now rule 15.14 of the Rules) to exclude affidavits from witnesses who were not available for cross-examination. Their Honours reviewed case law and other literature on the evidentiary impact of a lack of cross-examination, and said “[t]he assumption underlying the rules requiring attendance is that unless evidence can be tested by cross-examination, it can be of little weight”. While the material filed by the husband may be of little weight, not being subject to testing in cross-examination, it appears to us to make a proper determination pursuant to s 79(2) the trial Judge should read that material. Our comments in relation to an undefended hearing are subject to our consideration of case management principles and natural justice principles which we discuss below.
We conclude that an undefended hearing in the circumstances of this case will significantly curtail the husband’s participation in the proceedings. In summary:
·he will not be able to test the wife’s and/or her witnesses’ evidence in cross-examination;
·his own affidavit material if read in the wife’s case will be out of date; and
·the trial Judge may give little or no weight to the material filed on behalf of the husband.
Inherent power to dismiss application by reason of contempt
Discussion
The wife’s solicitor primarily seeks to rely on a number of asserted breaches by the husband of orders including injunctions made by Lawrie J in September 2000 to support her application for dismissal or permanent stay. We have particularised the alleged breaches above. In Young v Jackman, Young J as he then was, made findings in the context of a dispute between parents of an ex nuptial child, where there was an earlier finding by Kearney J that the father had “prima facie committed a contumacious contempt of the court”. A warrant had issued for the father’s arrest. Having accepted the general principle that contempt prevented a further application by the contemnor, Young J considered the question of what was meant by “a person who is guilty of contempt”. He compared and contrasted the authorities which held a person was not in contempt unless under committal or in the process of attachment, or that “disobedience itself of an order of the court places the applicant in contempt”. His Honour concluded
“Accordingly, in my view, for the purposes of the rule a party is in contempt if the court can see that he has disobeyed an order of the court and thus the rule applies in this case, unless there is some applicable exception”.
This decision, being one of the NSW Supreme Court, is based on principles derived from the Court of Chancery. The application of the relevant principles led to courts staying proceedings until the contempt was purged rather than dismissing an application. The English authorities have proceeded on the basis any application for permanent stay is not automatic, but subject to the court’s overriding discretion (see Hadkinson v Hadkinson [1952] 2 All ER 567; X Ltd v Morgan-Grampian Ltd [1990] 2 All ER 1 at 11). However New South Wales courts do not consider discretionary remedies applicable (Permewan Wright Consolidated Pty Ltd v A-G (1978) 35 NSWLR 365).
It is not clear if, or how, the equitable principles enunciated in Young v Jackman are affected by the specific statutory requirements to ground a finding of contempt under s 112AP of the Act (a statutory code), and the requirement to be satisfied that the breach of the order “involves a flagrant challenge to the authority of the court” proved to the necessary standard under s 140 of the Evidence Act 1995 (Cth). The asserted breaches by the husband have not been determined under Part XIIIB of the Act. The asserted breaches may, or may not, be matters which satisfy the criteria to prove contempt. They may be maintainable as contraventions under Part XIIIA rather than under Part XIIIB. Further, if the equitable principles apply, it is open as to whether the Court maintains a residual discretion to depart from such principles.
In X Ltd v Morgan-Grampian Lord Bridge discussed departure from the formulation of the general rule and said:
“I cannot help thinking that the more flexible treatment of the jurisdiction as one of discretion to be exercised in accordance with the principle stated by Denning LJ better accords with contemporary judicial attitudes to the importance of ensuring procedural justice than confining its exercise within the limits of a strict rule subject to defined exceptions.”
Denning LJ in Hadkinson’s case at 574-575 said:
“It is a strong thing for a court to refuse to hear a party to a cause and it is only to be justified by grave considerations of public policy. It is a step which a court will only take when the contempt itself impedes the course of justice and there is no other effective means of securing his compliance. In this regard I would like to refer to what Sir George Jessel M.R. said in a similar connection in In re Clements, Republic of Costa Rica v. Erlanger (1877) 46 LJ Ch 375, 383: ‘I have myself had on many occasions to consider this jurisdiction, and I have always thought that, necessary though it be, it is necessary only in the sense in which extreme measures are sometimes necessary to preserve men's rights, that is, if no other pertinent remedy can be found. Probably that will be discovered after consideration to be the true measure of the exercise of the jurisdiction.’ Applying this principle I am of opinion that the fact that a party to a cause has disobeyed an order of the court is not of itself a bar to his being heard, but if his disobedience is such that, so long as it continues, it impedes the course of justice in the cause, by making it more difficult for the court to ascertain the truth or to enforce the orders which it may make, then the court may in its discretion refuse to hear him until the impediment is removed or good reason is shown why it should not be removed.”
We are attracted to the reasoning of Lord Bridge in X Ltd v Morgan-Grampian, adopting as he does the approach of Denning LJ, rather than the strict formulation referred to in Permewan and Young v Jackman. It appears to us to provide flexibility, particularly where there is doubt about whether a party is in breach of an order under the Act, and/or a party’s ability to remedy the breach.
We now examine the alleged breaches of orders of the Court relied on by the wife in this Application. The first asserted breach involved the withdrawal of the husband of AUD$107,520 asserted to be “contrary to the orders of Lawrie J”. The trial Judge, having noted the husband’s evidence in his Statement of Financial Circumstances that he had withdrawn AUD$107,520 representing 20 months salary, said “as best I can determine this contravened the orders made by Lawrie J on 4 September 2000”. The husband deposed to such withdrawals for salary between May 2002 and August 2002. We accept the trial Judge properly qualified his findings about the asserted breach of the orders of Lawrie J. There is no evidence before us to suggest, as required by Lawrie J’s orders, that the husband gave notice to the wife of his withdrawal of salary which may, when and if examined, be found to have been in the ordinary course of business. However, the wife has not brought contravention proceedings or otherwise sought to have the husband dealt with for breach of the injunction in respect of this withdrawal. We are satisfied the trial Judge was correct to qualify his findings about this alleged breach.
The wife’s solicitor asserts that the husband was in breach of orders of 10 September 2004 which required him to forthwith authorise and direct the Bank of China (Hong Kong) Limited to forward to the wife’s solicitors statements of all accounts conducted by the Hong Kong company with the bank together with various other statements which the wife may request. The trial Judge noted that on 14 October 2004 an officer of the Bank of China notified the wife’s solicitor of the husband’s withdrawal of his authorisation to provide information to the wife’s solicitors. The findings of the trial Judge, based on evidence from an officer of the bank, prima facie, suggests a breach by the husband of the orders made on 10 September 2004.
The wife’s solicitor also asserts that the husband has failed to comply with costs orders made by the Full Court on 4 May 2005. Those costs were incurred when the Full Court ordered the husband should pay the wife’s costs incurred on discontinuance of an appeal instituted by him challenging the basis on which the Court can appoint a single expert. Whilst the orders provide for a specific sum to be paid by the husband to the wife they do not provide a specific period of time for payment. However, absent a date by which payment should be made, a payment within a reasonable period can be inferred.
The most significant asserted breach is the trial Judge’s finding that on 4 August 2005 the husband paid to the ATO AUD$424,459.80. The trial Judge found “the payment of the funds to the Australian Tax Office was in direct contravention of an injunction made by this Court on 9 September 2000”. Again, this finding was not one made following contravention or contempt proceedings, although there is no dispute such a payment was made which, prima facie, appears in breach of Lawrie J’s orders.
The wife’s solicitor points out that although s 69F of the Act provides that a court may proceed with a hearing of a proceeding in relation to a child even though the person who instituted the proceedings has failed to comply with an order of the court, there is no similar provision or latitude afforded a litigant in financial proceedings.
The husband has not to date rebutted the wife’s assertion that he failed to instruct the single expert, pay the costs ordered by the Full Court, or that he failed to give the wife notice of withdrawals from the Hong Kong company account including the significant payment of AUD$424,459.80 paid to the ATO. However, his proposed Notice of Appeal challenges the weight afforded by the trial Judge to the payment to the ATO, and other matters including issues relating to the appointment of the single expert.
Case management guidelines/natural justice
The assets of the parties, as best we can ascertain, include the unit which has a value of approximately $440,000 and is unencumbered. This unit is to be or has been transferred to the wife as trustee pending final determination of the s 79 proceedings pursuant to the orders of the trial Judge. Additionally, there is approximately $246,000 held in the wife’s solicitor’s trust account. There may be a small amount held in Hong Kong after the winding up of the Hong Kong company, and the wife owns two properties of relatively modest value in China.
While it is the wife’s case that the husband has appropriated significant sums of money, and accordingly she should be entitled to the whole of the assets in Australia at the conclusion of the proceedings, that assertion remains for determination by the trial Judge. There are substantial assets in Australia available to satisfy any order made for costs.
We have also considered the prospects of success of the application for leave to appeal. On the material before us, we could not be satisfied that there is no likelihood of the appeal being successful, although as senior counsel for the husband conceded there is presently little material filed on behalf of the husband which indicates, prima facie, the likelihood of success of the appeal.
The trial Judge has made a number of findings about delay and other actions by the husband which appear designed to frustrate a just and equitable outcome for the wife. However, the nature of the husband’s application for leave to appeal, as well as challenging the exercise of discretion by the trial Judge, is directed to his fundamental right to be heard at the proceedings and is not trivial, vexatious or a sham.
In the circumstances of this case we are satisfied, given the husband’s disclosed access to funds to date, that an order for security would not be oppressive or stifle the litigation, notwithstanding the assertions in Mr L’s affidavit that the husband needs to borrow funds from family members for legal fees. However, for reasons set out below, in this case, we do not find this factor to be a significant consideration.
We are satisfied that the litigation does not involve any question of public importance.
It is clear there has been no delay on the husband’s part in bringing his application for leave to appeal the orders of the trial Judge made on 16 August 2005, such application having been filed on 30 August 2005.
At the commencement of our reasons on this question we referred to the fact there are assets presently available in Australia and in the control of the wife to satisfy any order for costs. We find this factor to be an overriding consideration, and notwithstanding the wife’s position at trial is likely to be that she should, in addition to her units in China, retain the whole of the assets available in Australia and perhaps Hong Kong, we are not satisfied the requirement for security in the event the husband’s application for leave to appeal is unsuccessful has been made out.
Further conduct of the husband’s application for leave to appeal
The orders made by Boland J on 16 September 2005 provide that either party may restore the matter upon five days notice in writing to the other party and to the Appeals Registrar. It is apparent that the timetable fixed in the orders of 16 September 2005 is no longer practical and requires amendment.
WARNICK J:
I agree with the orders proposed by their Honours the Deputy Chief Justice and Boland J. I have had the advantage of reading the reasons (“the joint reasons”) given by their Honours for those orders. In relation to the dismissal of the wife’s application for security for costs of the appeal, I agree with the reasons given by their Honours and have nothing to add.
In relation to the application for dismissal or permanent stay of the husband’s application for leave to appeal, on the basis that the husband is in “contempt” of orders of the court, although reaching the same conclusion as their Honours, I do so for the following reasons.
I consider that the application for stay or dismissal of the husband’s application for leave to appeal raises the following questions:
(i)whether there is an inherent jurisdiction to entertain such applications;
(ii)if so, whether the exercise of power is discretionary;
(iii)whether the “contempt” invoked by the applicant for stay needs only to appear “on the face of it” or whether there must have been a conviction;
(iv)whether the “contempt” invoked must be of any particular character;
(v)whether the “contempt” invoked must have arisen in the same cause as that in which the proceedings of which stay or dismissal is sought, are brought; and
(vi)whether the power ought be exercised in this case.
Is there inherent jurisdiction?
The answer to this question is yes. In Malpass and Mayson (2000) FLC 93-061 the Full Court of the Family Court of Australia said:
“13.There undoubtedly exists a discretion in a court to refuse to entertain an application by a party who is in contempt. There is a convenient gathering of the relevant principles in the decision of Fahmi v Fahmi (1995) FLC 92-637.”
Whether the exercise of power is discretionary
As seen from the quote from Malpass and Mayson the answer to this question is also yes.
Whether the “contempt” invoked by the applicant for stay needs only to appear “on the face of it” or whether there must have been a conviction
In a decision now of some age, Marchant v Dunlop (1927) 44 WN (NSW) 108, Davidson J said at 109:
“There is strong authority for saying that a person is not in contempt at all unless he is either under committal or in the process of attachment.…”
This however seems not the modern view. That in proceedings for a stay, “contempt” might be found by the party whose application it is sought to stay, on evidence short of a “conviction”, is implicit in Romer LJ’s discussion in Hadkinson v Hadkinson (1952) at 285. There he recognised exceptions to the “rule” (that a person in contempt will not be heard) as including:
“A person…can appeal with a view to setting aside the order upon which the alleged contempt is founded.” and
“[a] person against whom contempt is alleged will also, of course, be heard in support of a submission that, having regard to the true meaning and intendment of the order which he is said to have disobeyed, his actions did not constitute a breach of it; or that, having regard to all the circumstances, he ought not to be treated as being in contempt.” (at 289) (emphasis added)
In Young v Jackman (1986) 11 FamLR 331, Young J referred to the application of the “rule”:
“where there had been prima facie such a contumacious contempt…” (p 335) (emphasis added)
In Malpass and Mayson the wife, who was respondent to the husband’s appeal, had sought a summary dismissal or stay of it on the basis that he had not complied with the orders appealed, requiring the payment of money. The Full Court said:
“16.We should add that the mere fact that the husband had not paid the money due did not of itself amount to a contempt.
…
17.Generally speaking more would be needed than merely asserting that the order has not been complied with to bring into play the exercise of the discretion to refuse to hear an appeal as of right where the contempt asserted is non-payment of money. There would usually have to be some significant feature that would cause a court to refuse to hear the appeal which might render any enforcement proceedings unnecessary and remove or radically alter the orders which are yet to be obeyed.”
As with regard to the words of Romer LJ, it is implicit in what the Full Court said in Malpass and Mayson that a “conviction” was not considered necessary to invoke the discretion to stay or dismiss.
Whether the “contempt” invoked must be of a particular character
It will be noted that in the authorities quoted, including that of the Full Court of the Family Court in Malpass and Mayson, the term “contempt” is used. However, the Family Law Act 1975, as amended, contains provisions which treat “failures to comply” with court orders on two different levels; contempt on the one hand and contravention on the other.
Pursuant to section 112AB of the Act, a person bound by an order shall be taken to have contravened it, if and only if he or she has intentionally failed to comply with the order or made no reasonable attempt to comply with the order.
Contempt, as defined in section 112AP of the Act only arises where the circumstance:
“…
(b)constitutes a contravention of an order under this Act and involves a flagrant challenge to the authority of the court.”
The question arises whether the “rule” applies to alleged contraventions as well as contempts.
In the instant case, as indicated in the joint reasons, the trial Judge at least in respect of one set of allegations, concluded that “as best I can determine this contravened the orders made by Lawrie J on the 4th September 2000.
However, this issue was not argued before us, so I mention it primarily for the sake of completeness.
The terms of section 69F, namely:
“A court may proceed with the hearing of proceedings in relation to a child even though the person who instituted the proceedings has failed to comply with an order of the court or of another court having jurisdiction under this Act.”
may offer some support for the argument that the “rule” as it applies in proceedings other than in relation to a child, can be invoked in respect of any failure to comply with an order.
In both Malpass and Mayson and Fahmi the facts seemed indicative of contravention, without necessarily amounting to contempt, though as indicated the term “contempt” was used in discussing the application of the “rule”.
However, as later discussed, at least in Malpass and Mayson there may be support for the proposition that, while to invoke the rule it may not be necessary that contempt is shown on a prima facie basis, something more than contravention, albeit without reasonable excuse, is required, before the remedy of stay/dismissal can be invoked. Arguably, there must be an element of challenge to the authority of the court, or at least the contravention must be in circumstances that impede the delivery of justice in the primary proceedings, to the applicant for stay.
Alternatively, perhaps the remedy may be invoked in respect of any failure of compliance (although the Family Law Rules may provide the appropriate remedy in many instances), leaving the character of the failure as a factor to be considered in the exercise of discretion.
Finally, I think it clear from the provisions of ss 112AC and 112 AD, read with ss 112AB and 112AP (referred to above) and consistent with the passage earlier quoted from the reasons of Romer LJ in Hadkinson, that any evidence of “reasonable excuse” for a failure to comply with an order, must be considered by the judge hearing the application for stay.
Whether the “contempt” invoked must have arisen in the same proceedings as those in which the application, stay or dismissal of which is sought, is brought
This point was also not raised before us.
It was expressly considered by the Full Court of this court in Fahmi and Fahmi (1995) FLC 92-637 where, at p 82,427, it was said:
“In light of the above authorities and texts we are satisfied that the rule that a party in contempt may not be heard is a discretionary rule and is limited, at least in its modern operation, to circumstances in which the person in contempt makes an application in the same proceedings or in the same cause in which the contempt has been committed. For present purposes, the question, therefore, becomes what is meant by the expression in the ‘same proceeding’ or ‘same cause’.”
Their Honours later said (p 82,428):
“We have quoted the relevant passages from the judgments of Lord Bridge and Lord Oliver because they make clear that the discretionary approach is now the preferred approach in circumstances where the question arises as to whether or not a person in contempt should be heard when that person seeks to appeal the order in respect of which that person is in contempt. We would respectfully agree that this is the correct approach in the circumstances of an appeal or in other circumstances which can be categorized as being in the same cause or the same proceedings as that in which the order, which is the subject of the contempt, was made.”
While the observations in Fahmi may appear restricted to applications for stay or dismissal of appeals from the very order which has been allegedly contravened, the last phrase does refer to “other circumstances” which can be categorised as being in the same cause or the same proceedings as that in which the order which is the subject of the contempt was made.
While I have previously concluded (Dickson and Dickson (No 2) (1999) FLC 92-857) that appeal proceedings are not the same proceedings, at least for the purposes of section 117(2A) of the Act, as the proceedings resulting in the orders appealed, I do not necessarily consider that, for the application of the “rule” under discussion, appeal proceedings ought be seen as entirely separate from the proceedings in which the order appealed was made. As the former issue depends on the terms of the Act, but the current question relates to the application of a “rule” originating in the broader civil jurisdiction, it may not be necessary to reconcile the two positions. However, a difference may be that the appeal proceedings are in the same “cause” as the trial proceedings.
It accords with common sense that in considering an application for stay of an appeal against an order made because of delay and non-compliance with court orders, where an appeal might operate as a further delay, that regard must be had to the circumstances of earlier non-compliance. If that is a valid approach, no doubt there might be cases, rare I suspect, in which there has been admitted non-compliance without reasonable excuse, or clear evidence of behaviour impeding the course of litigation or even “convictions” upon which a Full Court, asked to stay an appeal, might grant the application.
Whether the power ought be exercised in this case
If the contempt or contravention relied upon to support the stay application must have arisen in the proceedings commenced by the application for leave to appeal (stay of which is sought) then, as discussed in the joint reasons, the infringement was minor.
If it is appropriate to consider the contempts or contraventions allegedly committed in the property proceedings (as I consider it is) then as earlier seen there are some indications that it is appropriate in the discretionary exercise to consider the “character” of the alleged contempt.
As was seen earlier in the passage quoted from Malpass and Mayson the court said:
“17.Generally speaking more would be needed than merely asserting that the order has not been complied with to bring into play the exercise of the discretion to refuse to hear an appeal as of right where the contempt asserted is non-payment of money. There would usually have to be some significant feature that would cause a court to refuse to hear the appeal which might render any enforcement proceedings unnecessary and remove or radically alter the orders which are yet to be obeyed.”
In Young v Jackman, in a passage, a clause from which was earlier quoted, Young J, indicating that the character of the contempt might be relevant to an exercise of discretion, said:
“No matter what might be the attitude that the court would take to a technical contempt if there was some discretion, it seems to me that it would hardly ever be the case, where there had been prima facie such a contumacious contempt, that the court would exercise such a discretion in the plaintiff’s favour.”
In the instant case, as set out in the joint reasons, the trial Judge on more than one occasion considered that the evidence disclosed contravention and/or non-compliance by the husband with court orders. Those findings were a basis for the orders under appeal. However, in the proposed appeal, the husband challenges at least some of those findings, and in particular, asserts a failure by the trial Judge to have proper regard to excuses for the contravention of orders. So, the very question to be determined on appeal, if leave be granted, is whether on the evidence before the trial Judge, any failures of the husband to comply with court orders were such that the order excluding him from participation in the hearing of the application for property settlement, was justified.
The application for leave to appeal is not patently without merit.
In considering the exercise of discretion the words of Lord Justice Denning in Hadkinson are worthy of note:
“I need hardly say that it is very rare for this court to refuse to hear counsel for an appellant. No matter how badly a litigant has behaved, nevertheless, generally speaking, if he has a right of appeal, he has a right to be heard; for the simple reason that, if he is not heard, his right of appeal is valueless.” (at 295)
And at 298:
“It is a strong thing for a court to refuse to hear a party to a cause and it is only to be justified by grave considerations of public policy. It is a step which a court will only take when the contempt itself impedes the course of justice and there is no other effective means of securing his compliance.
Applying this principle I am of the opinion that the fact that a party to a cause has disobeyed an order of the court is not of itself a bar to his being heard, but if his disobedience is such that, so long as it continues, it impedes the course of justice in the cause, by making it more difficult for the court to ascertain the truth or to enforce the orders which it may make, then the court may in its discretion refuse to hear him until the impediment is removed or good reason is shown why it should not be removed.”
In my view, to stay the husband’s application for leave to appeal would be to render the husband’s right to seek leave, valueless. It would not be an appropriate exercise of discretion to stay or dismiss the husband’s application for leave to appeal.
ORDERS
1. That the Amended Response to an Application in a Case dated 26 October 2005 filed by the wife is hereby dismissed.
2. The matter be listed for a further procedural hearing in respect of the husband’s Application for leave to appeal filed 30 August 2005 at a date and time to be notified by the Appeals Registrar.
I certify that the preceding 154 paragraphs
are a true copy of the reasons
for judgment delivered by
this Honourable Full Court.
Associate
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