Akbar and Mali & Anor
[2015] FamCAFC 244
•21 December 2015
FAMILY COURT OF AUSTRALIA
| AKBAR & MALI AND ANOR | [2015] FamCAFC 244 |
| FAMILY LAW – APPEAL – PROPERTY – Where the wife appeals against final property settlement orders – Where the trial judge struck out the wife’s affidavit as it did not comply with s 98AB(2) of the Family Law Act 1975 (Cth) – Where the trial judge refused the wife’s adjournment application – Where having struck out the wife’s affidavit the proceedings were deemed “undefended” – Where final property orders were made in terms sought by the husband – Whether the wife’s failure to comply with a procedural obligation could be rectified – Consideration of s 98AB(2) of the Family Law Act 1975 (Cth) and r 11.02 and r 11.03 of the Family Law Rules 2004 (Cth) – Whether the trial judge erred in dismissing the wife’s application for an adjournment – Where the trial judge erred in failing to consider an application for relief from compliance per r 11.03 – Appeal allowed. FAMILY LAW – APPEAL – COSTS – Where the appeal succeeded on an error of law – Where the proceedings are to be remitted for rehearing – Costs certificates ordered pursuant to sections 6, 8 and 9 of the Federal Proceedings (Costs) Act 1981 (Cth). |
| Family Law Act 1975 (Cth): s 98AB(2) Family Law Rules 2004 (Cth): rr 1.04, 11.02, 11.03 |
| APPELLANT: | Ms Akbar |
| FIRST RESPONDENT: | Mr Mali |
| SECOND RESPONDENT: | Mr B |
| FILE NUMBER: | PAC | 5300 | of | 2011 |
| FIRST APPEAL NUMBER: | EA | 8 | of | 2014 |
| SECOND APPEAL NUMBER: | EA | 16 | of | 2014 |
| DATE DELIVERED: | 21 December 2015 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Strickland, Ryan and Austin JJ |
| HEARING DATE: | 1 September 2015 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 20 December 2013 |
| LOWER COURT MNC: | [2013] FamCA 1010 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Foster |
| SOLICITOR FOR THE APPELLANT: | Sydney Metropolitan Lawyers |
| COUNSEL FOR THE FIRST RESPONDENT: | Ms Bateman |
| SOLICITOR FOR THE FIRST RESPONDENT: | Bannisters Lawyers and Attorneys |
| COUNSEL FOR THE SECOND RESPONDENT: | Mr Jacobs |
| SOLICITOR FOR THE SECOND RESPONDENT: | Turnbull Kasif Lawyers |
Orders
EA 8 of 2014
The Appellant have leave to appeal the orders made on 12 December 2013.
The appeal be allowed.
The orders of 12 December 2013 be set aside.
The proceedings be remitted for rehearing before a judge other than Foster J.
EA 16 of 2014
The appeal be allowed.
The orders and declarations of 20 December 2013 be set aside.
The proceedings be remitted for rehearing before a judge other than Foster J.
Costs
That the Court grants to the Appellant a costs certificate pursuant to s 9 of the Federal Proceedings (Costs) Act1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the Appellant in respect of the costs incurred by her in relation to the appeals.
The Court grants to the First Respondent a costs certificate pursuant to s 6 of the Federal Proceedings (Costs) Act1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the First Respondent in respect of the costs incurred by him in relation to the appeals.
The Court grants to the Second Respondent a costs certificate pursuant to s 6 of the Federal Proceedings (Costs) Act1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the Second Respondent in respect of the costs incurred by him in relation to the appeals.
The Court grants to each of the parties a costs certificate pursuant to s 8 of the Federal Proceedings (Costs) Act1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to each of the parties in respect of the costs incurred by them in relation to the new trials ordered.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Akbar & Mali and Anor has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Numbers: EA 8 of 2014; EA 16 of 2014
File Number: PAC 5300 of 2011
| Ms Akbar |
Appellant
And
| Mr Mali |
First Respondent
And
Mr B
Second Respondent
REASONS FOR JUDGMENT
By Amended Notice of Appeal filed on 19 March 2014 (EA 8 of 2014) Ms Akbar (“the wife”) seeks leave to appeal orders made by Foster J on 12 December 2013 and, if leave is given, to appeal those orders.
By Notice of Appeal filed on 17 January 2014 (EA 16 of 2014) the wife appeals against orders for property settlement made by Foster J on 20 December 2013.
The wife, who lives abroad, filed her trial affidavit late. Further difficulties arose because her affidavit was not sworn before a person authorised to administer an oath or affirmation as a consequence of which the affidavit was inadmissible (s 98AB(2) of the Family Law Act 1975 (Cth) (“the Act”)). In broad terms, the appeal filed first in time relates to his Honour’s decision to strike out the wife’s affidavit and to refuse her application for an adjournment of what his Honour described as an undefended hearing. As will become apparent the first appeal raises questions about the application of r 11.03 of the Family Law Rules 2004 (“the rules”) (which deals with the circumstances in which a party may be relieved from the consequences of failure to comply with a procedural order) or the ease with which the wife’s failure to comply with s 98AB(2) could be rectified. The second appeal concerns the orders for property settlement which resulted from that undefended hearing.
The proceedings before his Honour were commenced by the wife in November 2011. By her application, the wife applied for an order for the sale of a property she owned with Mr Mali (“the husband”) at E Street, Suburb F (“the F property”). After payment of certain expenses and other adjustments, the wife sought 55 per cent of the net sale proceeds. The wife also sought that the husband pay her an amount equivalent to 50 per cent of his interest in a property registered in his sole name at C Street, Suburb D (“the D property”).
The husband opposed the orders sought by the wife and applied for orders that the wife transfer her interest in the F property to him without payment, that he discharge the mortgage secured thereon (for which he and the wife were jointly liable) and that the D property be transferred to his father Mr B (“the Second Respondent”).
The Second Respondent was a party to the proceedings. He and the husband asserted that the husband held the D property on trust for the Second Respondent and that the Second Respondent was the beneficial owner of that property. Both the husband and the Second Respondent sought a declaration that the Second Respondent was entitled to the D property to the exclusion of the husband and wife.
The primary judge dismissed the wife’s application and made orders along the lines of those sought by the husband and the Second Respondent. The husband and Second Respondent resist the appeals and seek to uphold his Honour’s orders.
Appeal ea 8 of 2014
So as to give the first appeal context it is necessary to set out key events in chronological order.
The husband and wife were married in 2008 and separated on 1 July 2010. At separation, the wife, who had moved to Australia to live with the husband, returned to Country H.
The wife commenced proceedings for settlement of property in the Federal Magistrates Court (now Federal Circuit Court) on 10 November 2011. It would seem that the husband did not file his documents in accordance with that court’s rules and thus it was necessary for that court to twice make directions for him to file a response, financial statement and affidavit. We mention this only to point out that his Honour’s approach to the wife’s subsequent failure to comply with directions was far more draconian than the more constructive approach which was taken by the Federal Magistrate to the husband’s failure to initially comply with the rules and directions.
In any event, on 4 March 2013, the proceedings were transferred to the Family Court of Australia.
Thereafter, various directions were made by a registrar to prepare the matter to be listed before the judge who would in due course determine the property settlement application.
With the registrar’s pre-trial preparation completed, the proceedings were listed before his Honour on 3 September 2013 for case management. Relevantly, on that occasion, his Honour made orders:
·that the parties file and serve one consolidated affidavit in chief together with any witnesses’ affidavits by 8 November 2013; and
·adjourned the proceedings to 11 November 2013 “for the purposes of allocating trial dates subject to compliance with orders”.
The husband filed his affidavit on 8 November 2013. The wife did not file her consolidated affidavit.
In accordance with his Honour’s order, the proceedings were listed before him on 11 November 2013 on which occasion the wife was given an additional two weeks to file her trial affidavits, and the proceedings were adjourned to 15 November 2013. The purpose of that adjournment was to enable the wife’s solicitor, who represented the wife throughout the proceedings, to ascertain whether the wife would be able to attend a hearing in the week commencing 13 December 2013. There was no week commencing 13 December 2013 and we anticipate that the enquiry related to the week commencing 3 December 2013. In other words, approximately three weeks thereafter.
On 15 November 2013, the wife’s solicitor informed his Honour that she had been unable to obtain further instructions from the wife. Relevantly his Honour ordered “[t]hat in the absence of the [wife] complying with the order as to filing her affidavit material by 25 November 2013 proceedings [sic] be listed for undefended hearing on 12 December 2013”.
The wife did not file her consolidated affidavit by 25 November 2013, and thus the effect of his Honour’s orders was that her application and each of the responses thereto were listed for an undefended hearing on 12 December 2013.
The wife’s consolidated trial affidavit was sworn before a lawyer in City G, Country H on 2 December 2013 and filed and served on 11 December 2013.
All the parties were represented before his Honour on 12 December 2013, albeit the wife was not present. As the exchanges below demonstrate, without, in effect, hearing from the parties, his Honour struck out the wife’s affidavit. The proceedings were then determined on the basis they were “undefended” by the wife. We think the better description of what unfolded is that the wife’s application was dismissed for want of evidence and the applications for orders sought by the husband and Second Respondent were determined undefended qua the wife.
The exchanges between his Honour and the wife’s solicitor were as follows:
HIS HONOUR: It doesn’t comply with the requirements for overseas swearing. Somebody who purports to be able to take an oath overseas can take the oath but they need to have their ability to do so certified under the provisions of section 98AB(2) of the Family Law Act by either an Australian diplomatic officer or an employee of the Commonwealth. So the affidavit is of no effect. So the affidavit of the applicant filed on 11 December 2013 is struck out. Thank you. On that basis, the matter is to proceed on an undefended basis. That means that on behalf of the applicant, you have the ability to cross-examine but you don’t have the ability to adduce evidence.
MS ABOU-HAMAD: Today?
HIS HONOUR: Today.
MS ABOU-HAMAD: I’m not prepared, your Honour. I’m not prepared.
HIS HONOUR: The matter’s for hearing.
MS ABOU-HAMAD: Indeed. I’m not prepared.
HIS HONOUR: What’s the matter? Do you want to withdraw your case?
MS ABOU-HAMAD: I thought the affidavit will be – will be ‑ ‑ ‑
HIS HONOUR: Well, maybe you should look at the rules and the requirements and ensure your client complies with directions which have not been complied with consistently for months. So the bottom line is now she has no evidence. On an undefended hearing, she’s entitled to be represented and her legal representative is entitled to cross-examine but not to adduce evidence-in-chief.
MS ABOU-HAMAD: Your Honour, I mean ‑ ‑ ‑
HIS HONOUR: So you can remain in the proceeding should you wish and you can cross-examine. At this stage, I’m not sure what the issues are as between the respondent and the second respondent but that’s the extent of your role in the proceeding.
MS ABOU-HAMAD: Your Honour, I mean, my client’s mother is on her death bed. I was struggling to get the affidavit.
HIS HONOUR: Well, don’t give evidence from the bar table. Thank you. She hasn’t complied. She hasn’t appeared. The affidavit has been struck out because it’s not an affidavit I can receive into evidence in any event because it’s inappropriately sworn. It doesn’t comply with the court’s directions as to filing for a further time and it has been struck out so I’m not going to cavil with my own ruling. So it’s a matter for you. You can remain and cross-examine. At this stage, I’m not sure what the issues are that remain between the respondent and the second respondent so I will inquire from Ms Bateman. Thank you. Ms Bateman, in relation to the second respondent’s – sorry, the first respondent’s response, you seek orders in relation to – do I have a case outline from you?
MS BATEMAN: No, but I can provide one to your Honour.
HIS HONOUR: Thank you.
MS ABOU-HAMAD: Basically to go outside and contact counsel, if you don’t mind?
HIS HONOUR: All right. You can be excused. Thank you. I will mark the – do you have a document – a copy of this, Mr Jacobs?
(Transcript of proceedings, 12 December 2013, pp 3 – 4)
Although it was open to his Honour to briefly stand the matter down while the wife’s solicitor obtained advice from counsel, the hearing continued in her absence.
A short time later, the solicitor for the mother returned and applied for an adjournment. The adjournment application is encapsulated in the following exchanges:
MS ABOU-HAMAD: Yes, your Honour. I had a chance to speak to counsel. He’s in Parramatta. He’s in this court, level – court 8. We’re seeking that the matter be adjourned to a different date to proceed – to proceed on an undefended basis so counsel can be prepared. I’m not prepared today, your Honour.
HIS HONOUR: No, no. It’s undefended today.
MS ABOU-HAMAD: Well, that’s fine, your Honour.
HIS HONOUR: All right.
MS ABOU-HAMAD: That’s we are seeking today, your Honour. I mean, to – counsel cannot appear today. He’s in a different matter and I – I’m not prepared. It’s prejudice to my client’s matter. The ‑ ‑ ‑
HIS HONOUR: Well ‑ ‑ ‑
MS ABOU-HAMAD: We’re seeking by ‑ ‑ ‑
HIS HONOUR: Ms Abou-Hamad, the difficult [sic] is that you haven’t complied with the orders. You filed an affidavit that’s meaningless because it’s not properly sworn and out of time. You’ve had significant difficulty obtaining instructions from your client historically, in any event, which has occasioned the matter being adjourned. And so your application for adjournment is refused.
MS ABOU-HAMAD: Court pleases.
HIS HONOUR: Do you seek leave to be excused?
MS ABOU-HAMAD: Yes. But I mentioned before, your Honour, my client’s mum is dying. I mean, this is – I can’t create miracles, you see. I mean ‑ ‑ ‑
HIS HONOUR: You don’t give evidence from the bar table.
MS ABOU-HAMAD: I can’t understand.
HIS HONOUR: You seek to be excused, you’re excused.
MS ABOU-HAMAD: Thank you.
(Transcript of proceedings, 12 December 2013, p 11)
It is appropriate to observe that notwithstanding his Honour’s statement concerning the absence of evidence concerning the wife’s mother’s poor health, at [50] of the wife’s affidavit, she said that she currently cared for her ill mother. In any event, the solicitor for the wife departed and the hearing was completed in her absence.
In his Honour’s reasons for judgment published on 20 December 2013 in relation to the property settlement proceedings, he restated his reasons for having struck out the wife’s affidavit and conducting the proceedings “undefended”. The only point of difference between his Honour’s oral and published reasons is that at [17] of the published reasons there is an indication that his Honour understood that “[t]he prima facie severity” of r 11.02 “is ameliorated by the provisions of Rule 11.03”. So that it is clear, his Honour did not consider the operation of r 11.03 of the rules.
Rule 11.03 and the application for an adjournment
The somewhat inelegantly constructed grounds of appeal were distilled into propositions that his Honour erred by:
·failing to apply the provisions of r 11.03; and
·dismissing the wife’s application for an adjournment.
We will first consider the challenge made to his Honour’s approach to r 11.03. Rules 11.02 and 11.03 are linked and in combination address the consequences of failure to comply with a procedural obligation and how a party may be relieved of those consequences. As we will explain these rules establish a three part process as follows:
·a step taken contrary to a procedural obligation is of no effect;
·consideration of the consequences of non-compliance; and
·how a party may apply for relief from the effect of r 11.02(1) or an order made pursuant to r 11.02(2).
Rules 11.02 and 11.03 are set out below.
11.02 Failure to comply with a legislative provision or order
(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.
Note: A defaulter may apply to the court for relief from this rule (see rule 11.03).
(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).
Note: This list does not limit the powers of the court. It is an expectation that a non‑defaulting party will minimise any loss.
11.03 Relief from orders
(1) A party may apply for relief from:
(a) the effect of subrule 11.02(1); or
(b) an order under subrule 11.02(2).
(2)In determining an application under subrule (1), the court may consider:
(a) whether there is a good reason for the non‑compliance;
(b)the extent to which the party has complied with orders, legislative provisions and the pre‑action procedures;
(c)whether the non‑compliance was caused by the party or the party’s lawyer;
(d)the impact of the non‑compliance on the management of the case;
(e) the effect of non‑compliance on each other party;
(f) costs;
(g)whether the applicant should be stayed from taking any further steps in the case until the costs are paid; and
(h)if the application is for relief from the effect of subrule 11.02(1)—whether all parties consent to the step being taken after the specified time.
Note 1: This list does not limit the powers of the court. See also subrule 1.12(3).
Note 2: A party may make an application under this rule by filing an Application in a Case or, with the court’s permission, orally at a court event.
It can be seen that the effect of r 11.02(1) is that if a step is taken after the time specified by the rules, the regulations or a procedural order, the step is of no effect. The step thus deemed not to have been taken, the effect of r 11.02(2) is that the court can next determine the consequences of that non-compliance in accordance with r 11.02(2) which comprises a non-exhaustive list of the court’s case management powers.
Of course, when determining the consequences of non-compliance regard must also be had to the main purpose of the rules, which is to be found at r 1.04. That rule provides:
The main purpose of these Rules is to ensure that each case is resolved in a just and timely manner at a cost to the parties and the court that is reasonable in the circumstances of the case.
(Note omitted)
It follows that the just resolution of proceedings is pivotal to the application of the rules. What is “just” includes considerations of timeliness and cost and takes into account the interests of the parties as well as those of the court and other litigants who may be affected by delay.
Thus, the combined effect of rr 1.04 and 11.02(2) is that the consequence of non-compliance imposed pursuant to r 11.02(2) must be:
1.responsive to the particular breach;
2.proportionate to the seriousness of the breach; and
3.may take into account the wider interests of case management and other litigants.
Self-evidently, before the court determines which, if any, of the r 11.02(2) consequences should be imposed, the affected parties must be given the opportunity to address the issue. Not only did his Honour determine the issue without effectively hearing from the solicitor for the wife, as counsel for the husband wryly observed, he did so without giving either counsel for the husband or counsel for the Second Respondent an opportunity to speak to the issue. Notwithstanding that this specific denial of procedural fairness is not captured by the grounds of appeal, we are sufficiently concerned about the approach which was adopted that we could not allow it to pass without reminding his Honour of his obligation to afford parties procedural fairness.
The third aspect of these rules arises from r 11.03 which enables a party to apply for an order relieving him or her from the consequences of r 11.02(1) or an order under r 11.02(2). The factors which the court in the exercise of its discretion, may consider in determining whether or not to grant relief pursuant to r 11.03(1) are set out in r 11.03(2). As Note 2 to this rule makes plain, an application for relief pursuant to r 11.03(2) may be made by filing an application in a case or, with the court’s permission, orally at a court event. Irrespective of how the application is made, the court is obliged to afford the affected parties procedural fairness.
Inter alia, the factors set out in r 11.03(2) are designed to ensure that a party would not suffer unfair consequences of non-compliance with a procedural obligation if the non-compliance was caused by that party’s lawyer, where there is a good explanation for the breach, or the other parties agree the party should be excused. In other words, the scheme of this sub rule is to ensure that these rules do not operate as instruments of injustice and there is a just and proportionate response to any breach.
The wife did not file an application for relief pursuant to r 11.03(1). However, the transcript demonstrates that notwithstanding her difficulty being heard, the solicitor for the wife attempted to make an oral application for relief of the type available under r 11.03(1). In so doing, the solicitor demonstrated she was unaware of the provisions of s 98AB(2) of the Act and that in relation to the failure to comply with the provision, the wife was not at fault. Otherwise, attempts were made to explain that because of the wife’s responsibility for her mother’s care, there was a good reason why she filed her affidavit late. These were all relevant matters. It needs to be remembered that the wife is resident overseas and prosecuted her case with all the difficulties inherent in that circumstance. In addition, although the proceedings had been underway for some time they had only recently moved into the trial management phase and, albeit she was late, the wife had filed her affidavit. This was not a case of persistent non-compliance, and thus it was incumbent on his Honour to consider whether by the application of r 11.03 the court could facilitate a just and timely hearing. It is tolerably clear that his Honour’s refusal to even consider r 11.03 was influenced by the fact that s 98AB(2) rendered the wife’s affidavit inadmissible. Yet, that difficulty was easily addressed, for example, by the wife re-swearing the affidavit so that it complied with the provision or adopting the contents of the affidavit in chief. These simple steps ought to have been considered in the context of the wife’s attempt to obtain relief under r 11.03.
Regrettably his Honour failed to engage with r 11.03 at all. There can be no doubt that the effect of his Honour’s failure to entertain the wife’s application for relief pursuant to r 11.03 had a substantial impact on her entitlement to a just hearing in which she could present evidence and fully participate. His Honour’s failure to consider r 11.03 and the imposition of a sanction that was disproportionate to the breach warrants appellate intervention.
It follows we are satisfied that his Honour should have granted the solicitor for the wife’s application for an adjournment. Although it is well settled that a decision of a court to grant or refuse an adjournment of proceedings will not lightly be set aside on appeal, his Honour’s decision was unreasonable and plainly wrong.
Conclusion – EA 8 of 2014
The application for leave to appeal and the appeal were heard concurrently and on the basis that, in the event the challenges raised in this appeal were established, the wife would be granted leave to appeal. We agree that an order that the wife have leave to appeal is appropriate, and the appeal will be allowed and his Honour’s orders of 12 December 2013 will be set aside.
EA 16 of 2014
The outcome of the first appeal is directly relevant to the disposition of the second appeal. As we have already explained, his Honour determined the wife’s entitlement to a property settlement without evidence from her. The circumstances under which this came about were contrary to the interests of justice and taint the entire process which resulted in his Honour’s orders made on 20 December 2013. It follows that his Honour could not be satisfied that the orders he made are just and equitable in consequence of which this appeal must succeed and his Honour’s orders set aside.
The proceedings will thus be remitted for rehearing by a different judge.
Costs of appeals ea 8 of 2014 and ea 16 of 2014
None of the parties sought costs in the event that his Honour’s orders were set aside. We agree an order for costs against one or other of the parties would not be appropriate. However, the appeals having succeeded on an error of law, it is appropriate that each of the parties has the benefit of certificates pursuant to the Federal Proceedings (Costs) Act1981 (Cth) for both the appeal and rehearing.
I certify that the preceding forty one (41) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Strickland, Ryan & Austin JJ) delivered on 21 December 2015.
Associate:
Date: 21 December 2015
5