Alfred and Alfred - [2008] FamCAFC 103

FAMILY COURT OF AUSTRALIA

ALFRED & ALFRED

[2008] FamCAFC 103

FAMILY LAW - APPEAL – Application to extend time to appeal – Property settlement in relation to marriage – Fifteen months after reasons for judgment were published and orders made the husband sought an extension of time within which to appeal all of the property settlement orders – He also sought to appeal a costs order made 5 months later in respect of those proceedings – Whether there is a substantial issue to be raised on appeal – The delay in bringing the explanation and the explanation for such delay – Whether there is any hardship or prejudice to the wife in the husband being allowed to re-open property settlement issues – Application dismissed

Family Law Act 1975 (Cth)

Joshua v Joshua (1997) FLC 92-767

APPELLANT:

MR ALFRED

RESPONDENT:

MS ALFRED

APPEAL NUMBER:

2008

FILE NUMBER:

BRM

8622

2005

DATE DELIVERED:

11 July 2008

PLACE DELIVERED:

Brisbane

PLACE HEARD:

Brisbane

JUDGMENT OF:

WARNICK J

HEARING DATE:

3 July 2008

LOWER COURT JURISDICTION:

Federal Magistrates Court

LOWER COURT JUDGMENT DATE:

26 April 2007

LOWER COURT MNC:

[2007] FMCAfam 225

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Ms Kirkham-Scroope

SOLICITOR FOR THE APPELLANT:

Carter Naughton Rice

COUNSEL FOR THE RESPONDENT:

Mr Jordan

SOLICITOR FOR THE RESPONDENT:

Wheldon & Associates

Orders

That the application for an extension of time within which to appeal the orders made by Federal Magistrate Burnett on 26 April 2007 and 19 September 2007 be dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Alfred & Alfred is approved pursuant to s 121(g) of the Family Law Act 1975 (Cth).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE

Appeal Number: NA 51 L of 2008

File Number: BRM 8622 of 2005

MR ALFRED

Appellant

And

MS ALFRED

Respondent

REASONS FOR JUDGMENT

In December 2006, Federal Magistrate Burnett tried competing applications for alteration of property interests between Mr and Mrs Alfred. On 26 April 2007 the learned Magistrate made orders in disposition of those applications and he published his reasons. Fifteen months later, before me, the husband seeks an extension of time within which to appeal all of the orders made 26 April 2007 and a costs order in respect of the property settlement proceedings, made by Burnett FM on 19 September 2007.
The principles applicable to applications such as this are conveniently set out in the judgment of Lindenmayer J in Joshua v Joshua (1997) FLC 92-767 at 84,440:
Accordingly, the first and most important question to be determined upon such an application as this is whether the applicant has established that there is a substantial issue to be raised on appeal. If not, the application must fail. If so, then other considerations may become relevant to the exercise of the discretion, namely: the extent of the delay and the reasonableness of any explanations offered for it; any hardship or prejudice flowing to the respondent from the applicant’s delay which cannot be compensated for by orders as to costs or otherwise; and the desirability, in the public interest, that there be finality to litigation. In that regard see also McMahon and McMahon (1976) FLC 90-038 at 75,144 and Tormsen and Tormsen (1993) FLC 92-392.

Is there a substantial issue to be raised on appeal?

The proposed grounds of appeal attack two “add backs” into the “property pool” identified by the Federal Magistrate. These add backs were described as firstly, “Unaccounted proceeds on sale of [Property G] 120 000” and secondly, as a series of some ten transactions, totalling $132,580.52. Most of these ten transactions involved withdrawals from bank accounts, the use of which was found by the Federal Magistrate to be unexplained. However, one involved legal fees of $22,432.50; one an operation at $10,000.00 and another a gift of $8,160.00 to an adult child of the husband from a former marriage. I accept that the two add backs constitute a significant portion of a total assessed property pool of $822,387.00 (according to the total in the judgment, which I think may be a few thousand out).
In paragraph 34 of his reasons for judgment, the learned Magistrate said, in respect of some of the husband’s evidence, that he found it “on this matter incredible”. The matter in question was the purchase of a piece of real estate and the construction of a house on it. The husband’s evidence was that the property was purchased by his son, although the contract was in the husband’s name, as was the memorandum of transfer. Of the same matter, he later said:
38.I regard the evidence of both the Respondent and [his son N] in respect of this matter as most unsatisfactory. I regarded both as having engaged in a collaborative scheme to deceive the Court in respect of these matters. Their motive for such an approach is clearly to minimise the matrimonial pool. …
Burnett FM dealt with the issue of the first add back, now challenged, namely the Property G proceeds, in paragraphs 64 to 82 of his judgment. During his consideration, the learned Magistrate made findings such as:
The plainly slovenly approach to detail and accuracy as identified on this occasion and others which have been noted earlier in this judgment lead me to conclude that the respondent has not adopted a particularly vigilant approach to informing the court accurately of events. …
The husband’s son N deposed that he had acquired the property at Property G. He contended that funds had been provided by his mother, the husband’s second wife, J. Of J, Burnett FM said:
76.Despite the above I did not find [J] a particularly satisfactory witness. She appeared as evasive, hesitant and vague. She struck me as a witness who was anxious not to inform the Court unconditionally of any matter. Indeed the impression I had was that the witness was anxious, if not fearful, about giving evidence.
And later, of the evidence of the husband, J and N, Burnett FM said:
77.… The presentation of these three witnesses’ evidence on that matter was in my view a transparent tissue of lies.
He continued:
78.I reject the evidence of the Respondent in respect of the circumstances surrounding his acquisition of the property at [Property G]. I find that he initially attempted to employ a pseudonym for the purposes of registering the transfer of the property to himself. For reasons which were not explored in evidence that matter did not come to pass and the property was registered in his name. That occurred in April 2001 and approximately twelve months later was subject to the transaction sworn to by [J] in her statutory declaration (exhibit 11). The property was conveyed into [N]’s name.
79.It was conveyed into his name in the circumstances deposed by [Mrs Alfred] in her statutory declaration, Exhibit 11. She paid the Respondent a sum of $120,000 (or forgave in part indebtedness to that value and acquired a motor vehicle for him). As she provided the consideration but permitted the transfer to be registered in her son’s name a presumption of advancement clearly arises.
80.The presumption has not been rebutted and the property remains his. However the disposition constitutes a premature disposition of matrimonial property by the Respondent in his favour as he did not account for the funds in respect of which he received the sole benefit. “What the (Respondent) did was to distribute to himself an asset in which the wife had a legitimate interest”.
81.Consistent with the approach In the Marriage of Townsend I consider that in the circumstances the correct way to deal with the Respondent’s receipt of the money is to “bring them into the pool of assets on a notational basis and make a distribution accordingly”.
82.As the Respondent has received in cash and kind a sum of $120,000 which has not been accounted for in the matrimonial estate it should be brought to book in this proceeding.
The challenge to the Federal Magistrate’s findings and conclusions in respect of these matters is, perhaps rather unusually, set out not in argument, but in the affidavit of the husband. I have some difficulty identifying from the husband’s deposition exactly what his attack on this aspect of the Federal Magistrate’s findings is, although it would seem to be contained in these two sentences:
31.… Although the Federal Magistrate found that I had not accounted for the proceeds of [Property G] there were never in fact any proceeds received by me. The learned Federal Magistrate was therefore in error at paragraph 82 of this judgment when he found that I had “received in cash and kind the sum of $120,000 which has not been accounted for in the matrimonial estate”. …
However, based on the statutory declaration of J, the Federal Magistrate had found:
75.… She further deposed that she paid a cash deposit of $26,000 and further cash payments amounting to $94,000 over the following two years. The first cash payment was sworn to having been paid on 12 February 2002. It would seem that this deposition more accurately reflects the truth of events than the depositions contained in her affidavits sworn in the proceedings. Again by reference to the material contained in the memorandum of transfer forming part of exhibit CIA14 it can be seen that the date of execution of the memorandum of transfer was 27 March 2002 and that the consideration was for a sum of $120,000. …
Support for the conclusions attacked seems clear.
As to the series of transactions totalling $132,580.00, which he added back under the heading “Surplus Cash”, the learned Federal Magistrate made findings about the various transactions, of which findings the following are typical:
107.… No explanation accompanied those withdrawals.
…
110.However what is unexplained is the actual expenditure. …
111.… Those payments appear to have been made notwithstanding that during most of that period the Respondent was in prison. Interestingly there are also in that account significant cash withdrawals made from that account on a regular basis. The payment of these sums remains unaccounted for particularly when regard is had to the payments made on the Respondent’s behalf from [X] account [xxxx], during the period when the Respondent was in prison and arguably had little need for funds.
…
113.In any event it is apparent that the manner in which these transactions were undertaken was designed to conceal and stymie any attempt by the Applicant to access these funds and have the benefit of a proper account in respect of their use. … There was in my view clear motive on the part of the Respondent at this time (if not earlier) to conceal his ongoing financial position from the Applicant.
Of the challenge to these conclusions, the husband deposes:
33.… Add backs should be the exception rather than the rule – see Chorn v Hopkins [2004] FLC93-204. While it is largely accepted that funds expended in legal costs should be generally added back to the divisible pool, there is no general rule that in circumstances where I was not working (I was in prison) expenses associated with maintaining the various properties as well as supporting me, should be included as a notional add back – see Chorn v Hopkins [2004] FLC93-204 and the cases cited therein.
The learned Magistrates’ review of these issues was detailed. Many of his findings are based on his assessment of credibility of the husband and his witnesses, and, as seen, those assessments were adverse. I do not say that the proposed appeal has no prospects of success, but the prospects are not obvious.
I answer the question posed, “Is there a substantial issue to be raised on appeal?” by saying that it is doubtful if that is so. However, since I do not conclude that the answer is “No”, I proceed to consider the other questions referred to by Lindenmayer J in Joshua (supra).

Delay and the explanation for it

In support of his application, the husband deposes that he finished a sentence of imprisonment in or about December 2006, which is the month when, on the 12^th and 21^st, the property settlement proceedings were heard. In January 2007, the husband was sentenced to a further period of 12 months for further offences of driving whilst disqualified. He remained in prison until 20 December 2007.
At trial, the husband had been represented by solicitors, J W Lawyers, and they remained his solicitors until the end of July 2007. On or about 27 April 2007, the husband received a letter from his solicitors, enclosing a copy of the reasons for judgment. A further letter was received on or about 9 May 2007 in which, according to the husband, his then solicitor:
35.…referred to the Federal Magistrate’s decision and gave me certain advice in relation to the prospects of a successful appeal. That letter did not refer to the time limit for an appeal. I do not otherwise recall Mr ]W] advising me of the time limit for an appeal.
36.After receipt of the letter of 9 May 2007 from Mr [W] I formed a view that I should obtain alternative representation and as I was incarcerated I asked my former wife [J] to make enquiries on my behalf. Ultimately that led to her enquiry of [WH] on 26 July 2007.
Costs of the property proceedings were argued on 30 July 2007. On 3 August 2007, WH forwarded the husband a letter enclosing a costs agreement and on Monday, 10 September 2007 the husband first met with a solicitor from that firm. The husband deposed:
When Mr [WH] when to see the husband on 10 September 2007 he confirmed to me that I was out of time for lodgement of an appeal. That was the first occasion upon which I was informed that there was a time limit for lodgement of an appeal.
On 13 September 2007 these solicitors forwarded a brief to Mr Burridge of counsel, requesting advice on the prospects of success of an appeal against the decision of Burnett FM and asking that counsel draft documentation for the appeal if he thought that course should be taken. Burnett FM delivered his judgment in respect of costs on 17 September 2007.
Counsel’s advice was given on 29 October 2007. The solicitors forwarded it to the husband on 2 November 2007 and he deposes that on 12 November 2007 he provided instructions to his then solicitors by telephone to proceed with an application to extend time for the appeal. The solicitors immediately sought funding from the husband and instructions in writing. The husband says he forwarded a letter to his solicitors which was received by the solicitors on 15 November 2007. However, the solicitors wrote again on 22 November 2007 about instructions in writing. The husband says that he had not appreciated that his letter of 15 November 2007 did not contain a specific instruction to prepare appeal documents. In any event, he says, he had “assumed that I had given instructions whether via me or whether via my former wife…for the appeal to proceed”. On 20 November 2007, the husband forwarded another letter to his solicitors, asking him to proceed in respect of the appeal.
Between September and November 2007, the husband’s solicitors and the wife’s solicitors exchanged correspondence relating to the costs order to be paid by the husband and relating to enforcement of the judgment of 26 April 2007.
Mr Burridge was again briefed on 28 November 2007 to prepare appeal documents. Documents were received on 6 December 2007. On 7 January 2007 the husband was advised by his solicitors that from 31 December 2007 those solicitors would cease operation. On 10 January 2008 the husband had an initial conference with the solicitors who now act for him. On 15 February 2008 an application was filed in the Federal Magistrates Court seeking an extension of time within which to appeal. That application was transferred to this court on 23 March 2008.
The husband deposes that there were restrictions on telephone contact whilst he was in gaol. Also, he says, sometimes security meant that correspondence was delayed. I place no weight on these claims. Elsewhere in his affidavit, the husband indicates an ability to receive correspondence promptly and to respond promptly by telephone.
Mr Jordan, counsel for the wife, submitted that the husband’s statements about interactions with his solicitors did not explain the delay. I agree. Many questions bearing upon the delay and the husband’s state of knowledge from time to time about the time limit for an appeal, remain unanswered. Because of these unanswered questions, I am not prepared to accept, on its face, the husband’s deposition that the 10^th of September 2007 was the first occasion upon which he was informed that there was a time limit for the lodgement of an appeal.
The husband received the orders and reasons for judgment within a couple of days of their making and delivery, together with a letter from his solicitors. That letter is not produced. I cannot say whether that letter would or would not have contained any advice about an appeal, including the time limitations, but merely observe that it provided an opportunity for such advice to be given and it would have been timely to then give it.
Then, on Wednesday 9 May 2007, a further letter was sent by the solicitors to the husband referring to the decision and giving certain advice in relation to the prospects of success of an appeal. That letter is not in evidence. It would seem extraordinary that the matter of an appeal would be raised by the solicitors without some instructions from the husband and that that appeal would be discussed in the fortnight after the decision was given, but no mention made of a time limit.
The husband then formed the view that he should obtain alternative representation. One can only think that a prospective appeal was a part of, if not the sole reason for seeking continued representation. He offers no other reason and the prospects of an appeal were the last matter that he mentions he received advice on. The delay between 9 May 2007 and 26 July 2007, when Mr WH was engaged and then until 10 September 2007, when Mr WH first saw the husband is not the subject of explanation, in circumstances where one would have expected, even if there had been no awareness of a particular time limit by the husband, a degree of urgency would have been felt by the husband.
The issue of costs of the property proceedings was argued on 30 July 2007. On the husband’s case, at this time he wished to appeal the substantive orders. I think it improbable that the costs hearing could take place without some discussion between the husband and his legal representatives about any proposed appeal against the substantive orders, and about the time limit in respect of it.
Though the delay since the costs judgment may be explained, the explanation indicates tardiness and inefficiency on the husband’s side, in bringing an application for an extension of time on for hearing, in the court where it had to be heard. These features taint the explanation.
There is no corroboration of the husband’s contentions. There could have been, but no explanation is given for the absence of such evidence. I do not accept that delay is persuasively or sufficiently explained.

Hardship or prejudice to the wife

The wife commenced proceedings for property settlement on 19 October 2005. She obtained a judgment in April 2007. Well over one year later, the husband is seeking to re-open property matters between them. The orders made by Burnett FM provided for the husband to pay the wife $287,835.00. She has not received her entitlement. Appeal proceedings seem likely to mean that she will be further prejudiced in that regard.

Conclusion re extension of time to appeal the substantive orders

In my view, an extension of time is not necessary for justice to be done in this matter. The prospects of the proposed appeal are doubtful. Delay is long and not satisfactorily explained. The wife is likely to suffer the prejudice of delayed enforcement of the orders in her favour if the time for appeal is extended. For these reasons, the husband’s application will be dismissed.

Extension of time to appeal the costs order

Before the costs order was made, on his own account, the husband knew that time limits applied to appeals. There is no explanation in his material for the failure to file an appeal in respect of the costs order. His counsel, Ms Kirkman-Scroope, offers the thought that an appeal against the costs order would have been somewhat useless if the husband was unable to appeal the substantive orders. However, she also said that the proposed appeal against the costs order would focus on the aspect of indemnity, as against party/party costs. That issue would not seem to depend on a successful appeal against the substantive orders. The relevant ground of appeal is:
2.That in making the Orders made on 19 September 2007 in relation to costs, the Learned Federal Magistrate erred in law on the aspect of indemnity.
Yet in his affidavit, the husband deposes:
45.…I acknowledge that the outcome of my Appeal in relation to costs, is dependent upon the success of my Appeal in relation to the substantive property settlement matter.
I was shown nothing to indicate that the proposed appeal against the costs order had prospects of success.
As to prejudice to the wife, she has not received payment of costs.
For these reasons, I do not intend to extend time in relation to the appeal against the costs order.

I certify that the preceding thirty-seven (37) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court.

Associate:

Date: 11 July 2008