Arthurman and Arthurman - [2008] FamCAFC 188

FAMILY COURT OF AUSTRALIA

ARTHURMAN & ARTHURMAN

[2008] FamCAFC 188

FAMILY LAW - APPEAL – PROCEDURE – Where appeals against property orders and subsequent costs orders pending and concurrent s 79A application – Whether appeals or s 79A application should be heard first – Where no provision in the Act or rules which determines priority– In the circumstances of this case s 79A application to be determined before the appeals.

Family Law Act 1975 (Cth) – s 79, s 79A
Family Law Rules 2004 (Cth) – r 13.04

CDJ v VAJ (1998) FLC 92-828
W & W [2006] FamCA 260
Whiteley & Whiteley (Unreported, Family Court of Australia, Ellis, Simpson & Hase JJ, 2 July 1991)

APPELLANT:

Ms Arthurman

RESPONDENT:

Mr Arthurman

FILE NUMBER:

SYF

2938

2003

FIRST APPEAL NUMBER:

2008

SECOND APPEAL NUMBER:

120

2008

DATE DELIVERED:

2 December 2008

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Boland, Thackray & O'Ryan JJ

HEARING DATE:

27 November 2008

LOWER COURT JURISDICTION:

Family Court of Australia

LOWER COURT JUDGMENT DATE:

18 March 2008 and 16 October 2008

LOWER COURT MNC:

[2008] FamCA 230
[2008] FamCA 928

REPRESENTATION

ADVOCATE FOR THE APPELLANT:

Ms Arthurman appeared in person

COUNSEL FOR THE RESPONDENT:

Mr Miller

SOLICITOR FOR THE RESPONDENT:

Dettmann Longworth

Orders

That the wife’s appeals being appeal numbers EA 43 of 2008 and EA 120 of 2008 be adjourned until the determination of the wife’s application seeking relief under s 79A of the Family Law Act 1975 (Cth).
That the order made by the Honourable Justice Rose on 11 September 2008 be discharged.
The parties are directed to approach the Case Co-ordinator/List Clerk to re-list the wife’s application under s 79A for directions.
That there be no order as to costs.

IT IS NOTED that publication of this judgment under the pseudonym Arthurman & Arthurman is approved 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 Number: EA 43 of 2008; EA 120 of 2008
File Number: SYF 2938 of 2003

Ms Arthurman

Appellant

And

Mr Arthurman

Respondent

REASONS FOR JUDGMENT

Introduction

On 18 March 2008 after contested property proceedings under s 79 of the Family Law Act 1975 (Cth) (“the Act”) Fowler J delivered reasons and made orders adjusting the property of Ms Arthurman (“the wife”) and Mr Arthurman (“the husband”).
On 15 April 2008 the wife filed a Notice of Appeal in which she appealed Orders 1(a) to (d), 4, 5 and 6 of the trial Judge’s orders. Those orders provide in broad terms, for the wife to transfer to the husband her interest in a property (“the C property”), and for the wife to receive a cash sum from the proceeds of sale of another property.
On 2 May 2008 an order was made by Boland J directing the Appeal Registrar to conduct a procedural hearing to settle the appeal book index and to make other necessary directions for the hearing of the appeal.
On 18 June 2008 a procedural hearing was held and orders made by the Appeal Registrar.Among the orders made by the Appeal Registrar on that day were the following orders.
1.That the agreed appeal books for the appeal comprise each of the following documents arranged in the following order:
1.Any further amended Notice of Appeal to be filed by 16 July 2008;
…
5.That the Appellant Wife file in the Sydney Registry of the Court within 4 weeks of delivery of judgment in the wife’s section 79A application filed 18 June 2008, eight (8) copies of the agreed and the contentious appeal books, together with a certificate pursuant to Chapter 22 Rule 22.22(2) of the Family Law Rules 2004, and serve two (2) copies of the agreed and the contentious appeal books on the Respondent Husband, together with a copy of the certificate.
On 18 June 2008 the wife filed, at first instance, an application in which she seeks orders that all the orders made by Fowler J on 18 March 2008 be set aside under s 79A(1)(a). That application was amended by her in an amended application filed on 14 July 2008 to seek, in the event the orders made by Fowler J are set aside, other orders adjusting the parties’ property interests. On 15 July 2008 the husband filed a response in which he seeks orders the wife’s application under s 79A be dismissed, and that the wife pay his costs of the proceedings. Both parties have filed affidavits in these proceedings.
The wife asserted in her affidavit that following the delivery of judgment she had ascertained that the husband, who is a solicitor, had failed to disclose an interest he has in a property on the Northern Beaches. The husband acknowledged in his affidavit that he was the registered proprietor of the property as tenant in common with another solicitor but said that they held the property as trustees. He attached to his affidavit a Trust Deed of the V Trust (“the Trust”) said to have been executed in 1996. He claimed that the wife, who had been an employee of his legal firm, was aware of the arrangements associated with a particular property (“the Northern Beaches property”). He also asserted that he had “produced a number of documents to the Family Court” which included “boxes and files” in relation to the Trust.
On 14 July 2008 the wife filed an Amended Notice of Appeal it appears in compliance with an order made by the Appeal Registrar (see Order 1.1 of orders of 18 June 2008) against all the property orders made by Fowler J on 18 March 2008 except for Orders 9, 10 and 13. Those latter orders dealt with the sale of a motor vehicle, retention of chattels and payment of costs of a single expert.
On 11 September 2008 the wife’s application for relief under s 79A was listed before Rose J. It appears that probably occurred because the wife filed her application under s 79A on an Application in a Case form. It was thus listed before Rose J on the basis the relief sought by the wife was interim relief, rather than final relief. Our examination of the transcript indicates that his Honour did not have before him a copy of the amended Notice of Appeal, or the orders made by the Appeal Registrar on 18 June 2008, in particular Order 5 of those orders. On that day his Honour made the following order:
1.That the following application and subpoena be stood out of the list to a date to be fixed pending determination of the wife’s appeal and unless otherwise ordered:
(a)The Amended Application in a Case of the wife filed on 14 July 2008.
(b)The subpoena issued 15 July 2008 to Musgrave Peach Lawyers.
On 16 October 2008 Fowler J made costs orders in respect of the property proceedings. On 17 October 2008 the wife filed an appeal against those orders (EA 120 of 2008).
On 21 October 2008 Boland J made two sets of orders. The first orders consolidated the appeal against the property orders (EA 43 of 2008) (“the substantive appeal”) with the appeal against the costs orders (EA 120 of 2008) (“the costs appeal”) and directed the Appeal Registrar to conduct a further procedural hearing to settle the appeal book index. The second orders provide as follows:
1.That the Appeal Registrar notify the parties of a listing time and date before the Full Court if possible in the second week of the November/December sittings.
2.IT IS NOTED that the listing before the Full Court is to consider whether Appeal EA 43 and EA 120 of 2008 should be heard after the wife’s application under s 79A.
The Full Court listed the matter before it on 27 November 2008 to hear submissions from the parties, who are in dispute as to the order in which the proceedings in the Court should be determined, and to deal with any difficulties which arise as a result of the conflict in the orders of 18 June 2008 of the Appeal Registrar and the orders of 11 September 2008 of Rose J.
The wife submitted her appeals should be adjourned until the hearing of her application under s 79A is complete, and the husband submitted the appeals should be heard and determined before the s 79A proceedings.

Material considered

We heard submissions from the wife, who appeared in person, and the husband’s counsel. The material which was before us was not extensive. We had before us copies of the wife’s original Notice of Appeal and Amended Notice of Appeal in the substantive appeal and the Notice of Appeal in the costs appeal, together with copies of relevant orders. We were also provided with copies of the wife’s application and amended application under s 79A, the husband’s response and the affidavits thus far relied on by the parties in those proceedings, together with a transcript of the proceedings before Rose J.

Submissions

The wife asserted that the s 79A proceedings should be first heard and determined on the basis that, if successful, her appeal will be unnecessary. She submitted that the husband’s failure to disclose his interest in the Northern Beaches property was in breach of his obligation pursuant to r 13.04(1)(f)(i) the Family Law Rules 2004 (“the rules”).
The wife further asserted that the trust deed annexed to the husband’s affidavit reveals he has an entitlement under the trust deed to receive, in addition to professional fees, a fee of 2.5 per cent of any income earned by the Trust, and that in the past the husband had carried on property development on behalf of clients and obtained profits from such developments. She drew attention to the provisions of Clause 1S1(o) of the Trust Deed which gives the trustees power (at least in “cases of doubt”) to determine whether moneys or property coming into the hands of the trustees are capital or income.
Counsel for the husband asserted that the husband was no more than a bare trustee of the Trust and that the wife and her legal advisors had notice of the husband’s interest in the property during the proceedings below. He submitted that the s 79A proceedings could therefore not succeed, and unnecessary inconvenience, cost and delay will be experienced by the husband if the appeals are adjourned until the conclusion of the s 79A proceedings. In particular the husband’s counsel asserted that in order to prepare for the s 79A proceedings it may be necessary for the husband to obtain expensive updated valuations (on the basis that a trial Judge may determine there has been a miscarriage of justice and to make different orders under s 79).
The husband’s counsel also submitted that it could be up to two years before the s 79A application is listed for hearing, and that the wife’s appeals would be heard within a shorter time frame.
The husband’s counsel advised us that the husband would, on the hearing of the appeal, consent to an application by the wife to adduce further evidence, and evidence relative to the Trust and Northern Beaches property.

Discussion

We were not referred to any relevant authority on the appropriate order to determine proceedings when a party has filed both an appeal and an application under s 79A. From our own researches we have had regard to the decision of the Full Court in Whiteley & Whiteley (Unreported, Family Court of Australia, Ellis, Simpson and Hase JJ, 2 July 1991) and W & W [2006] FamCA 260. In the former case, after contested property proceedings, the husband had filed an application under s 79A seeking to vary one of the trial Judge’s orders, and subsequently filed an application to extend time in which to appeal. The trial Judge heard and dismissed the application to extend time to appeal. The husband appealed from that decision. The wife sought summary dismissal of the appeal.
The Full Court determined that the appeal, which was considered not to be without merit, should be determined prior to the s 79A application. Ellis J (with whom Simpson and Hase JJ concurred) did not give any reasons for determining the priority of the applications. Ellis J said:
…However, I am of the view that the appeal should be determined prior to the Sec.79A application coming on for hearing. If the appeal were successful, no doubt the Sec.79A application would have to be reconsidered.
We do not consider the decision in Whiteley assists in any material way the determination of the present matter. We consider it is clearly distinguishable. In Whiteley the subject matter of the appeal and the s 79A application concerned the same order of the trial Judge, and further the relief sought under s 79A was not, as in this matter, that the orders be set aside, rather it was for a variation of one order. That order was also the subject of the appeal.
In W & W the appellant wife filed an appeal against property orders, and shortly prior to the hearing of the appeal, she filed an application to adduce further evidence asserting evidence given by the husband before the trial Judge was untrue. In objecting to the reception of the further evidence in the appeal the husband’s counsel submitted the appropriate course for the wife to adopt was that she file an application under s 79A . Finn J, with whom Warnick J and May J agreed, determined that the application to admit further evidence should be rejected, and the wife should be afforded the opportunity to seek adjournment of her appeal to enable her to file an application under s 79A. In the course of delivering her ex tempore reasons Finn J referred to the decision of the High Court in CDJ v VAJ (1998) 197 CLR 172, (1998) FLC 92-828, at paragraphs 111 and 119 of that judgment. At paragraph 111 the majority (McHugh, Gummow and Callinan JJ) said:
111.… Ordinarily, where it is alleged that the admission of new evidence requires a new trial, justice will not be served unless the Full Court is satisfied that the further evidence would have produced a different result if it had been available at the trial. Without that condition being satisfied, it could seldom, if ever, be in the interests of justice to deprive the respondent of the benefit of the orders made by the trial judge and put that person to the expense, inconvenience and worry of a new trial.
Later in their judgment, at paragraph 119, the majority explained:
119.… Applications for a variation of an order, rather than resort to s 93A(2) [that is of course, the statutory provision under which applications to adduce further evidence before this Full Court are bought], will generally be the preferred mode of procedure even where there has been a change of circumstances between the making of the order and the hearing of any appeal.
Although CDJ v VAJ was an appeal dealing with parenting orders, it has wider application. The High Court confirmed that where potential further evidence sought to be admitted at the hearing of an appeal is controversial, strict caveats apply to the circumstances where such evidence will be admitted, and generally the preferred mode of procedure is for a new trial. In this case, as in W & W, the new trial contemplated is a trial pursuant to s 79A.
We accept that there is no provision in the Act or the rules which dictates the priority in hearing an appeal between the same parties and an application under s 79A, and that each case must necessarily turn on its own particular facts and circumstances.
There is no dispute before us that the husband failed to disclose in his documents filed in the property proceedings his position as trustee of the Trust or that he was one of the registered proprietors of the Northern Beaches property.
The wife’s present affidavit evidence is limited to the disclosure of the title search revealing the husband to be one of two registered proprietors of the Northern Beaches property. Counsel for the husband asserted that the husband’s evidence demonstrates that he has no beneficial interest in the property of the Trust including the Northern Beaches property and there was no evidence that he had received any income from the Trust. On the contrary, the husband produced financial statements purporting to show that in 2005/06 the Trust operated at a loss and that in the previous financial year it made a very small profit.
We do not know whether the wife accepts the husband’s assertions. We do not know whether she wishes to seek further information concerning any arrangements that may have been made for the development of the Northern Beaches property, which may in turn lead to the husband deriving income from the Trust. We can only assume she does not accept his assertions.
We therefore do not consider the husband’s proposed consent to the introduction of further evidence on the hearing of the appeal to be an answer to the wife’s desire to explore at first instance the setting aside of the judgment on the ground of non-disclosure. It must be borne in mind that there are two predominant uses to which further evidence can be put on the hearing of an appeal. The first is to demonstrate that the decision of the trial Judge was erroneous (or less commonly evidence adduced by a respondent to “buttress” the decision of the trial Judge): CDJ v VAJ (supra). The second is to inform the Court of material matters to be taken into account in the event the Full Court is minded to re-exercise the discretion of the trial Judge: Allesch and Maunz (2000) 203 CLR 172. It is trite to say that the latter option would only become available in the event error were to be demonstrated and the primary orders set aside.
Given the contentions now advanced by the husband, the significance of the further evidence relied upon by the wife (i.e. ownership of land not previously disclosed) could only be fairly considered after the wife has been afforded the opportunity to cross-examine the husband concerning his interest in the property. This would not be an opportunity ordinarily afforded by the Full Court. The further evidence would therefore be most unlikely to satisfy the Full Court that the decision of the trial Judge was erroneous, since the wife’s application to introduce the further evidence would be met by the husband’s application to rely upon the affidavit in which he purports to explain his interest in the Northern Beaches property. Faced with controversy, the Full Court may well decide to adjourn the hearing of the appeal pending determination of the s 79A application.
In our view, the issues arising out of the husband’s apparent failure to make the full disclosure required by the rules can only be adequately resolved at first instance. We note there is nothing to preclude the husband from applying, if so advised, to seek to have the wife’s claim under s 79A summarily dismissed. If that course was followed little delay and expense would be occasioned to the husband. Given the discrete nature of the issue in this case, it would be open to the husband to seek to persuade the Court to have the question of miscarriage of justice under s 79A (1)(a) determined as a preliminary issue, or to have the wife’s application expedited. The former procedure would reduce both parties’ costs, and the latter avoid delay. Consideration could also be given by the husband to seeking security for costs of the wife’s s 79A application if circumstances justified so doing.
If the wife’s application under s 79A is ultimately found to have merit, the whole of the orders of the trial Judge may be set aside thus rendering an appeal unnecessary. If the wife is unsuccessful in the s 79A application no doubt an application for costs will be made on behalf of the husband, and if successful, will ameliorate any financial prejudice to him. There is no suggestion that the wife would be unable to meet any costs order made against her. If the wife is unsuccessful and she appeals, then all appeals could be heard at the same time.
Taking into account all the evidence currently before us, and having regard to the parties’ submissions which we have discussed above, and the avenues available to the husband if he chooses to exercise any of them, we consider the most expeditious and cost effective manner of determining the competing applications is that the wife’s appeals should be adjourned pending determination of her application under s 79A.

I certify that the preceding thirty-two (32) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court.

Associate:

Date: