AS & PJD & LD PTY LTD

[2005] FamCA 41

[2005] FamCA 41

FAMILY LAW ACT 1975

IN THE FULL COURT
OF THE FAMILY COURT OF AUSTRALIA
AT SYDNEY  Appeal No. EA4L of 2004
  File No. SYF 5191 of 1993

IN THE MATTER OF:

AS

Appellant Wife

- and -

PJD

First Respondent

- and -

LD PTY LTD

Second Respondent

REASONS FOR JUDGMENT OF THE FULL COURT

CORAM:  Finn, Holden and Warnick JJ        

DATE OF HEARING:        15 December 2004

DATE OF JUDGMENT:     4 February 2005

APPEAL SUMMARY

MATTER:AS and PJD and ANOTHER

APPEAL NUMBER:  EA 4L of 2004 (SYF 5191 of 1993)

CORAM:Finn, Holden and Warnick JJ

DATE OF HEARING:  15 December 2004

DATE OF ORDER:  4 February 2005

DATE OF JUDGMENT:  4 February 2005

CATCHWORDS:               FAMILY LAW – APPLICATION for LEAVE TO APPEAL – APPEAL – Costs Order – Whether making of costs order was open to the trial Judge in the proceedings – Whether costs order related to all costs of the application or only the costs of a particular hearing.

FAMILY LAW – APPLICATION for LEAVE TO APPEAL – APPEAL – Appeal against an order for adjournment of proceedings and an order made pursuant to an undertaking – Not ultimately argued.

FAMILY LAW - APPLICATION to ADDUCE FURTHER EVIDENCE.

Application for leave to appeal and appeal allowed to the extent necessary to vary the terms of the costs order.

Application for leave to appeal and appeal otherwise dismissed.

Application to adduce further evidence dismissed.

No order as to costs of the application for leave, the appeal or application to adduce further evidence.

1. This is an application by Ms S (“the appellant”) seeking leave to appeal and, if leave be granted, an appeal against the following orders made by Rose J on 24 March 2004:

   1.That upon the Undertaking provided to the Court today by [Ms S], the Application of [Mr D] and [LD Pty Ltd] filed 16 February 2004 is stood over generally with liberty to restore to the List for hearing upon 7 days’ written notice being given by any of the parties.

   2.That [Ms S] pay the costs of [Mr D] and [LD Pty Limited] of and in relation to the Application filed 16 February 2004 as assessed and agreed upon or otherwise as taxed.

2. The background to this matter as it emerges from the material before us can for present purposes be briefly stated.

3. The appellant and her former husband, Mr CGS, were divorced in July 1993.  However, they continued to live in the same house together with their children.  In October 1997 the appellant and Mr CGS, having sold a home at M in which they had been living and which they owned as joint tenants, moved to live in a house at B, which they proposed to buy, and in which they were permitted to live by the vendor.

4. At about the same time as they moved into the B house, Mr CGS apparently entered into an arrangement with a Mr D whereby they would both buy another property which adjoined, or was close to, the property into which Mr CGS and the appellant had moved and which they proposed to buy.

5. When the appellant discovered that both properties had been purchased in the name of a company owned or controlled by Mr D, with the proceeds of sale of the M property (which were in the order of $250,000) being used for purposes of the purchase, she commenced litigation in this Court and in the Equity Division of the Supreme Court of New South Wales. 

6. On 21 April 1999, Judicial Registrar Knibbs made an order in this Court restraining Mr D or his company (known as LD Pty Ltd) from disposing of the B properties.

7. On 16 February 2004, Mr D and his company (to whom we will refer as “the third parties”) filed an application in this Court against the appellant seeking orders to the effect that the restraining order of 21 April 1999 be set aside and that the applicants be permitted to sell the properties at B with the proceeds of any such sale to be held in an account pending the determination of the Supreme Court proceedings.

8. It appeared to be common ground at the hearing before us on 15 December 2004 that the application filed by the third parties on 16 February 2004 first came before Judicial Registrar Loughlin on 15 March 2004.  At that hearing, the Judicial Registrar ordered, on the application of the third parties, that the matter be transferred for hearing to a Judge.  The Judicial Registrar reserved the costs.  Accordingly, the application came before Rose J for hearing on 24 March 2004. 

The hearing before Rose J on 24 March 2004

1. When the matter came before Rose J on 24 March 2004, the appellant appeared on her own behalf and the third parties were represented by a solicitor, Mr M.

2. Early in the hearing (Transcript 24/03/04, p5) his Honour confirmed with Mr M that the basis of the third parties’ application was “principally, according to [Mr D’s] affidavit, being in default under the mortgage and being unable to, for financial reasons, to continue to meet the obligations under the mortgage.”  (The mortgage relates to the B properties.)

3. After an adjournment of about an hour to enable his Honour to read additional material relied on by the parties, his Honour provided Mr M with the opportunity to make submissions.  In the course of very brief submissions, Mr M drew attention to an affidavit from Mr CGS in which he indicated that he did not oppose the orders sought by the third parties.  He also submitted that the financial necessity for the orders sought was made out in the affidavit of Mr D. 

4. His Honour then provided the appellant with an opportunity to make submissions.  After some initial matters were canvassed, the following important exchange occurred (Transcript 24/03/04, p17-19):

   [MS S]: And the main issue that he is struggling with the mortgage but no proposal has been put forward to me and writing down exactly what is required of me to pay towards that mortgage to keep the substantive matter in the Court of Appeal in tact.

   HIS HONOUR: Are you prepared to make the mortgage payments?

   [MS S]: I’m an accounts person, you Honour.  I would like to do it, but for [Mr M] to come across to me and say, “He can’t pay the mortgage”.  This only happened a few weeks ago, before even this application – after this application was put in, “Would you make a contribution”.  I wrote back a letter, “We have to sit down and negotiate”  ---

   HIS HONOUR: All I want to know is ---

   [MS S]: --- I’m prepared to do it, yes, provided ---

   HIS HONOUR: --- You will make the mortgage payment?

   [MS S]: I’m prepared to make my share of the mortgage payments.

   HIS HONOUR: What is your share?

   [MS S]: Well, half of – from what I can gather, it’s supposed to be a 50/50 thing, I’m prepared to do half of it.

   HIS HONOUR: When can you make the first payment?

   [MS S]: When?  Well, when do you – as soon as I get the documentation.  Like back – see I’m an accounts person and I have to have that in front of me.  As soon as I get the documentation setting out what the mortgage payment is and everything is in writing, that I made a contract agreement with [Mr D] to pay such and such for the mortgage instead of just handing the money over.  If that’s even done today, if that’s going to be used for the mortgage, then I’ll do it today.

   HIS HONOUR: All I want to know is when can you make the first payment?

   [MS S]: I said, today.  As long as I get it in writing.

   HIS HONOUR: Today? Half of the mortgage payment?

   [MS S]: Yes, definitely.  If he’s got difficulties in meeting the mortgage payments, I’ll do that.  As regards with the land tax ---

   HIS HONOUR: Well, just a minute.  So, the mortgage is to the St George Bank, there is a letter attached to [Mr D’s] affidavit which is particulars of the mortgage, that’s the letter of St George Bank, 28 October 2002.  It gives the loan account number, identifies the properties, so it would then be a simple matter, would it not, to send a payment for half of the amount shown, that is $1860, after that would be $930 per month, commencing from today.

   [MS S]: Yes.

   HIS HONOUR: Is that right?

   [MS S]: I’ll just check my figures, your Honour.  As I said, I would like to help out.  Because I was completely unaware that Mr CGS wasn’t paying.

   HIS HONOUR: You asked me to read a lot of historical documents, which I’ve read, and this same matter was the subject of an earlier affidavit of about 2 years ago in which this precise issue was raised and that was one of the affidavits that you asked me to read, [Ms S].  So, it may be that you’ve overlooked the fact that it had been raised before.  So, right, I understand that and the first payment, which you said can be made today, would that be by 5 o’clock today?

   [MS S]: Yes, but how do I do it?

   HIS HONOUR: You have a letter with a cheque delivered to the St George Bank identifying the account number and the properties and enclosing your cheque and indicating that you will be making half the payments in the future and you send a copy of that correspondence to [Mr M].

   [MS S]: Okay, that’ll be fine.  I’ll just write all that down, what I have to do, because I get a bit vague sometimes.

   HIS HONOUR: And, as an accounts person, you no doubt would know what to do.

   [MS S]: (Indistinct).  With a bank cheque, I suppose? The amount is 930.  And do you want a copy of it too, Rose J?

   HIS HONOUR: No, I don’t need it but [Mr M] would need it.

   [MS S]: And thereafter, I pay that amount on, every month ---

   HIS HONOUR: According to the evidence before me, it’s go to be paid monthly.

   [MS S]: Monthly.  Today’s the 24^th, on the 24^th of every month.

   HIS HONOUR: Anything else?

   MS S: In relation to the land tax and the ---

   HIS HONOUR: I haven’t been asked to make any orders about land tax.

   [MS S]: Okay, then, I’ll just pay the mortgage, that’s it. My half. 

5. Then, after some discussion between his Honour and the appellant, the following further exchange occurred (Transcript 24/03/04, p 22):

   HIS HONOUR: [Ms S], I’m going to have a form of undertaking for you to sign.

   [MS S]: I’d be quite happy to do it, your Honour.  As I said, this is the first time it was made clear to me that the basis of the whole thing was the mortgage payments.  I know it takes me a while to get things through my head but until I spoke to you, to find out exactly what the situation is.

   HIS HONOUR: You’ve made that submission before and I don’t want to go through it all again ---

   [MS S]: No, no, I say I’m quite happy to sign it.  There’s not a problem with that.

   HIS HONOUR: --- and if I accept this undertaking and it’s breached ---

   [MS S]: I won’t breach it.  As I said, I’ll just go straight to – I’ll go to the Supreme Court, type a couple of letters there, because I can use the computer there, and go and pay it.

   HIS HONOUR: What I was going to say, [Ms S], is that if it’s breached or if there are any new circumstances, then the application before me can be restored to the list on short notice. All right?

   [MS S]: Thank you, your Honour.

   HIS HONOUR: I’m just having this form completed for you, [Ms S] and then you can read it and if there’s anything you don’t understand, you can ask and you can then indicate whether you’re signing it or not.  This is a form of undertaking to be handed down to you now and I will adjourn now for a few minutes, [Ms S], so you can read it and then I’ll resume at say 5 to 12 and you have to understand that if you give this undertaking then it has the same legal effect as a Court order and if you are in breach of the undertaking and that’s established then you could be liable for a range of penalties from a fine to even imprisonment.  So if there’s any other aspect of the undertaking you don’t understand after you’ve read it, then please ask me. 

6. His Honour then delivered a short judgment, in which he explained the application which was before him and outlined the evidence from Mr D concerning the financial difficulties which he was facing.  Having then said that he “was attracted to making the order as sought by the applicants”, his Honour went on to explain in the following terms the undertaking which the appellant had been prepared to give and the fact that she had given such undertaking:

   18.However, during the course of submissions the respondent informed me that she was prepared to pay half of the monthly interest payment required to be paid by the mortgagee in accordance with the evidence contained in the affidavit of [Mr D] and that the first of such payments would be made today and continue until further order.

   19.The amount required to be paid on a monthly basis, according to that evidence, is $1,860.00 per month.

   20.As a consequence, the respondent’s Undertaking, if accepted, would be for payment of half of that amount resulting in her making payments of $930.00 per month.

   21.The signed form of that Undertaking has been initialled and placed with the Court papers.

   22.I explained the nature and terms of the Undertaking to the respondent given that she is unrepresented and the effect of any proved breach of that Undertaking.

   23.Due to the terms of that Undertaking, which I have accepted, it follows that a substantial part of the principal financial pressure in terms of the mortgagee, deposed to by the applicant, will now be alleviated.

   24.Notwithstanding that the Undertaking was signed by the respondent and that I accepted such undertaking, I intend to make an order to enable the application to be restored on seven days’ written notice in the event that there is a breach of that Undertaking, or due to any new circumstance which may arise.

   25.I also bear in mind that the appeal in New South Wales Court of Appeal has been listed for hearing in a little over two months’ time.  The New South Wales Court of Appeal will then be in a position to determine those matters and any consequential issues that may arise which it considers appropriate to deal with.

The costs application made on 24 March 2004

1. Having delivered his judgment on the substantive matters, his Honour then informed the appellant that Mr M had made an application for costs.  The appellant responded that the costs should be “costs of the proceedings”.  A discussion then ensued between his Honour and the appellant concerning negotiations that may have taken place in the past between herself and Mr M concerning the possibility of her making a contribution toward the mortgage. 

2. His Honour then delivered a judgment in respect of the costs application. Having referred to the provisions of s 117(2A) of the Family Law Act 1975 (“the Act”) and to some of the history of this matter, his Honour concluded:

   37.In view of the history of this matter, in particular the absence of any evidence of a contribution or offer of contribution by the respondent to the mortgage instalments for the properties at [B], which she claims should all be transferred to her, I conclude that the ground has been made out that a circumstance exists which may justify a costs order.

   38.There have been past unsuccessful attempts at negotiating issues.  The parties have been locked in litigation all commenced by the respondent in a number of courts.  The costs that have been incurred have been staggering and various orders for costs against the respondent have not been complied with.

   39.In my view, all of those matters to which I have just referred are such that I give weight to them as justifying a costs order being made.

Proceedings before the Full Court

1. On 21 April 2004 the appellant filed an application for leave to appeal the orders made by Rose J which recorded the undertaking given by the appellant and the fact that the third parties’ application had been stood over and which provided for the appellant to pay the third parties’ costs (see paragraph one of these reasons).

2. On 22 July 2004 directions were made for the application for leave to appeal and the appeal to be heard together by the Full Court.

3. At an early stage in the hearing before the Full Court, it was pointed out to the appellant that Order One of Rose J’s orders did no more than adjourn the hearing of the third parties’ application for the discharge of the order restraining the disposal of the properties at B on the basis of the undertaking which she had given to pay half the mortgage on those properties. 

4. It was also pointed out to the appellant that if she had reason to question the amount of the contributions to the mortgage which she was paying pursuant to her undertaking, or if she sought to vary her undertaking in any way, then these were matters which should be the subject of an application to a single Judge pursuant to the liberty “to restore to the list” contained in Order One of the orders made by Rose J.

5. When these matters were drawn to the appellant’s attention she told us that Order One was not a matter of concern to her; rather her real concern was in relation to the costs order.

6. Before we turn to consider the costs order, however, it is appropriate to say in relation to Order One that, as we understood the many grounds of appeal contained in the appellant’s draft notice of appeal and also her oral submissions, her essential complaints concerning that order were as follows.  First that she had in some way been overborne by Rose J into offering the undertaking, or otherwise forced into providing the undertaking because of his Honour’s attitude to her.  Secondly, that the third parties had not provided sufficient information about the mortgage and their financial positions generally. 

7. We have set out earlier the passage from the transcript of the hearing before Rose J where the appellant offered the undertaking.  It will be seen from that passage that the suggestion that she should make a contribution towards the mortgage came from the appellant herself and not from his Honour.  Moreover, there is nothing in that passage from the transcript, or indeed anywhere else in the transcript, which could in any way indicate any bias, actual or apprehended, on the part of his Honour towards the appellant.

8. As to any concerns that the appellant may have regarding the details of the mortgage payment arrangements or the financial affairs of the third parties, these are matters that the appellant is at liberty to raise before a single Judge, as was pointed out to her during the hearing before us.  We mention in this regard that there was also before us an application by the appellant to adduce further evidence.  However, as we understood from the appellant that further evidence was concerned with issues relating to the mortgage and the third parties’ financial positions which would be more appropriately put before a single Judge, we were not prepared to permit the appellant to adduce the further evidence.

The costs order made on 24 March 2004

1. When we turned to consider the costs order we expressed concerns to the solicitor for the respondent third parties, Mr M, regarding the apparently wide terms of the costs order.  In our view that order could be read as requiring the appellant to pay all costs relating to the application filed by the third parties on 16 February 2004.  As earlier mentioned, that application had originally come before a Judicial Registrar on 15 March 2004 before being transferred to Rose J apparently at the request of the third parties.  Furthermore, that application has not been finally determined, but remains “stood over”.

2. Mr M informed us that he was prepared to accept that the costs order should be confined to the costs of the half-day hearing before Rose J on 24 March 2004, and that the appeal could be allowed to that extent.  However, he asked us to assess those costs at $495 and to further amend the order accordingly.  We note at this point that, had the costs order not been limited to the costs of the hearing before Rose J, then the costs claimed by the third parties would, according to Mr M’s estimate, have been in the region of $2,500.  The appellant did not question the reasonableness of the sum of $495.

3. Notwithstanding the proposed amendment to the costs order to limit its application to the hearing on 24 March 2004, it remained the appellant’s case that no costs order should have been made in respect of the hearing before Rose J on that day and that those costs should have remained costs in the proceedings.

1. The appellant’s essential argument was, as we understood it, that it had been necessary for her to have the matter proceed to a hearing because she needed to obtain information about the financial position of the third parties but that such information had still not been provided.

2. However, no argument put to Rose J or to us explained why, prior to receipt of the information she desired, the appellant could not have indicated her preparedness, in principle, to make some contribution towards the mortgage repayments.  As seen, Rose J observed that the difficulty in the third parties meeting mortgage payments had been raised long before 22 March 2004.

3. Again, as we explained to the appellant at the hearing before us, an order for costs is particularly within the discretion of the trial Judge and thus particularly immune from appellate interference.

4. While none of us may have made the costs order, we are not persuaded that it was not open to Rose J on the basis of the material concerning the history of the matter which was before him, to make an order that the appellant pay at least the costs of the hearing before him.  Accordingly, any further interference by us with his order would not be justified.

Costs of the application for leave to appeal and the appeal

1. In the event that the application for leave to appeal and/or the appeal succeeded the appellant sought an order in her favour to cover the costs of the transcript and the preparation of her appeal book, while Mr M sought an order in favour of the third parties in the sum of $1,300 in the event that the application for leave to appeal and/or the appeal as not successful.

2. We are of the view that, having regard to our proposed orders, the circumstances do not justify the making of an order for costs in relation to the application for leave to appeal or the appeal. Rather, the general rule contained in s 117(2A) of the Act that each party pay his or her own costs should apply in this case.

Orders

1. That the application for leave to appeal and the appeal be allowed to the extent necessary to vary Order 2 of the orders made by the Honourable Justice Rose on 24 March 2004 to provide:

   “That [Ms S] pay the costs of [Mr D] and [LD Pty Limited] of the hearing on 24 March 2004 of the application filed on 16 February 2004 with such costs being assessed at $495.00.”

2. That the application for leave to appeal be otherwise dismissed.

3. That the application to adduce further evidence (filed 30 November 2004) be dismissed.

4. That there be no order for costs in relation to the application for leave to appeal and/or the appeal.

I certify that the preceding 33 paragraphs are a true copy of the reasons for judgment delivered by this Honourable Full Court

Associate