BARCLAY & PATON
[2017] FamCAFC 76
•28 April 2017
FAMILY COURT OF AUSTRALIA
| BARCLAY & PATON | [2017] FamCAFC 76 |
| FAMILY LAW – APPEAL – PROPERTY – Where the appellant says that the order appealed provides for a sum to be paid to him by the respondent which does not reflect the reasons of the trial judge because of mathematical errors in the calculation of the adjusting payment – Where the matter was brought back before the trial judge who refused to allow the appellant to make an application or any submissions and suggested he had no power to vary the order – Where the trial judge clearly made errors in arriving at the amount to be paid by the respondent to the appellant – Where there is merit in the appeal and it should be allowed – Where the order appealed should be varied to increase the amount payable by the respondent to the appellant. FAMILY LAW – COSTS – Where the appellant sought an order for costs in the event that the appeal was successful and that written submissions be permitted because certain offers had been made which would be relevant – Where in the event that no costs were ordered the appellant sought a costs certificate pursuant to the provisions of the Federal Proceedings (Costs) Act 1981 (Cth) – Where the respondent opposed any order for costs and sought a costs certificate if no order was made – Where whether an order for costs is made is entirely within the discretion of the court – Where the errors were the trial judge’s – Where neither the appellant’s nor the respondent’s counsel led the trial judge into error more than the other – Where there should be no order for costs – Where the appeal is being allowed on a question of law – Costs certificates ordered for both parties. |
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| APPELLANT: | Mr Barclay | ||
| RESPONDENT: | Ms Paton |
| FILE NUMBER: | MLC | 3010 | of | 2015 |
| APPEAL NUMBER: | SOA | 62 | of | 2016 |
| DATE DELIVERED: | 28 April 2017 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Melbourne |
JUDGMENT OF: | Strickland J |
| HEARING DATE: | 13 December 2016 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 8 July 2016 |
| LOWER COURT MNC: | [2016] FCCA 1508 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Puckey |
| SOLICITOR FOR THE APPELLANT: | Clancy & Triado |
| THE RESPONDENT: | In person |
Orders
The appeal be allowed.
Paragraph 3 of the order for property settlement made on 8 July 2016 be amended to read as follows:
3(a)Contemporaneously with the Transfer and refinance the wife pay to the husband the sum of $234,694;
3(b)On or before Friday 28 July 2017 the wife pay to the husband the further sum of $43,713.
There be no order as to costs
The Court grants to the appellant husband a costs certificate pursuant to the provisions of 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 husband in respect of the costs incurred by him in relation to the appeal.
The Court grants to the respondent wife a costs certificate pursuant to the provisions of 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 respondent wife in respect of the costs incurred by her in relation to the appeal.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Barclay & Paton has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| IN THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT MELBOURNE |
Appeal Number: SOA 62 of 2016
File Number: MLC 3010 of 2015
| Mr Barclay |
Appellant
And
| Ms Paton |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an appeal filed by Mr Barclay (“the husband”) on 5 August 2016 against one of the orders for property settlement made by Judge Burchardt on 8 July 2016. The appeal is opposed by Ms Paton (“the wife”).
The order appealed against (paragraph 3) provided for the wife to pay to the husband the sum of $234,694. The husband says though that that amount “does not reflect the reasons of the trial judge due to [mathematical errors] in the calculation of the adjusting payment”, and the amount should be $278,407.
On 27 July 2016 the husband brought the matter back before the trial judge in an attempt to have the errors corrected, but his Honour refused to allow the husband to make any application or any submissions, and declined to consider the matter suggesting he had no power to vary the order.
On 9 December 2016 the wife filed an application in an appeal seeking leave to adduce further evidence, but it was not filed in accordance with the Family Law Rules 2004 (Cth) (“the Rules”), and thus on 13 December 2016 the wife filed an application in an appeal seeking to permit the late filing and service of the application filed on 9 December 2016. That application was not opposed by the husband, and I made an order giving the wife leave to rely on that latter application and the affidavit in support. However, as explained in my ex tempore reasons for judgment delivered on 13 December 2016, that application then had to be dismissed, given that without a cross-appeal filed by the wife, there was no utility in admitting that further evidence.
I also note that on 13 December 2016 I gave leave to the wife to rely on her written summary of argument filed late on 8 December 2016.
The appeal
The issue here is relatively straightforward, and the trial judge clearly made errors in arriving at the amount to be paid by the wife to the husband.
At 9:30am on 8 July 2016 his Honour delivered his reasons for judgment, but he did not make orders at that time, and that is explained at [90] where his Honour said this:
Unfortunately the conclusions I have reached are not reconcilable with the orders proposed by either party. Those proposals are posited on assumptions as to outcome (sic) that have not been made good. In the circumstances, and subject to submissions, I will direct the parties to confer in an endeavour to produce an agreed minute of orders to effect my judgment. Obviously, if this cannot be achieved then further argument will be required.
Later that morning, both counsel attempted to “clarify” the pool of assets and liabilities with his Honour in order to present minutes of order in accordance with his Honour’s reasons. In [18] his Honour had set out what he says he understood was agreed in that regard. His Honour said this:
Most of the matters in the property pool are agreed, although there are a few areas of dispute. I understand the following to be agreed:
Assets
·[Property H] (matrimonial home), $1,370,000
·[Property R], $277,000;
·[Property T], $267,000;
·Two Mazda cars owned by the husband, $25,000;
(taken as a concession against interest from the husband’s aide memoire MFI1 – there are no valuations);
·Kia [vehicle] owned by wife, $41,200 (red book valuation provided by wife);
·Husband’s offset account in (country omitted), $94,000
·Husband’s shares, $8,000; and
·Wife’s shares, $35,935.
Liabilities
·Mortgage [Property H], $400,000;
·Mortgage [Property T], $160,655 (wife), $164,000 (husband);
·Mortgage [Property R], $50,769;
·ME bank loan, wife $42,722;
·ME bank loan, wife $40,819;
…
In response to questions raised by counsel, the first relevant issue “clarified” by his Honour was that the wife’s motor vehicle (referred to at [69]) was “not included in the pool” (Transcript 8 July 2016, page 5, lines 2 – 10). However, a plain reading of his Honour’s reasons at [68] and [69] reveals that the motor vehicle should not have been excluded from the pool for the purposes of calculating the amount to be paid to the husband. It was the $40,000 profit retained by the wife from the sale of a property which was excluded.
The second relevant issue “clarified” by his Honour was in relation to Property R. His Honour was informed that that property had been sold, and after payment out of the mortgage, certain bank loans, and the costs of sale and adjustments, the net amount available was $131,674. Taking the figures from [18] the mortgage was $50,769, and the two ME bank loans of the wife were $42,722 and $40,819. There was then $10,774 expended in costs of sale and adjustments.
In his Honour’s reasons for judgment he found that the two ME bank loans were not to be included in the pool, and remained the wife’s responsibility ([73]). Unfortunately, his Honour in making his order did not do that, suggesting incorrectly on 8 July 2016, that the loans were accrued during the currency of the relationship (Transcript 8 July 2016, page 6, lines 6 – 8), and should be included. Thus, his Honour deducted those loans from the value of the assets instead of leaving them out.
In order to complete the picture in relation to the sale of Property R, although it is not included in the liabilities in [18], there is no doubt that the capital gains tax of approximately $40,000 payable on sale was to be taken into account (see [73]), and his Honour confirmed this on 8 July 2016 (Transcript 8 July 2016, page 5, lines 12 – 13, page 8, lines 33 – 35, and page 9, lines 6 –7).
Pausing there, it is readily apparent from reading the transcript of 8 July 2016 that the attempts to clarify his Honour’s reasons in order to draft the minutes of order was a thoroughly confused and confusing exercise, primarily as a result, unfortunately, of his Honour’s failure to accurately recall his findings set out in his reasons for judgment, and counsel’s ready acceptance of his Honour’s comments without taking his Honour to his reasons, which would have demonstrated that those comments were incorrect. Plainly, it was an exercise that should not have been attempted, and his Honour should have made the orders himself when delivering his reasons for judgment, rather than leaving counsel to try and interpret those reasons.
That would have also obviated the need to revisit paragraph 3 when the matter came back before his Honour on 27 July 2016. On that day counsel presented to his Honour agreed minutes of order varying the parenting orders also made on 8 July 2016, and the husband’s counsel attempted to have his Honour vary paragraph 3 of the order for property settlement pursuant to r 16.05(2)(e) of the Federal Circuit Court Rules 1999 (Cth). That paragraph provides that, “the court may vary or set aside its judgment or order after it has been entered if … the order does not reflect the intention of the court.”
However, his Honour took the view that he was “functus officio” in the absence of agreement about the asserted errors (which was the case here), and refused to hear from counsel, indicating that the husband should appeal.
In his written summary of argument the husband has argued that not only is there “inherent jurisdiction in a court to rectify a judgment after it has been entered when it does not correctly reflect the judge’s intention as at the time it was pronounced”, but his Honour could have also applied r 16.05(2)(e) of the Federal Circuit Court Rules.
However, there is no appeal against his Honour’s refusal to do that on 27 July 2016, and thus I do not propose to address that issue, and particularly when given the wife’s lack of legal representation, I have not heard full argument about it. I do say though that his Honour should have at least allowed counsel to make submissions in relation to what his Honour’s powers were, and then ruled on the application.
Returning to the errors made by his Honour in making paragraph 3 of the order for property settlement.
The total of the assets set out in [18] is $2,118,135, and the total of the liabilities is $698,310, leaving net assets of $1,419,825. The adjustments his Honour should have then made are as follows:
a)Reducing the liabilities by excluding the wife’s two ME bank loans totalling $83,541.
b)Increasing the liabilities by including the capital gains tax of $40,000.
c)Increasing the liabilities by including the costs of sale and the adjustments in relation to Property R.
Making those adjustments results in net assets of $1,452,592, of which 35 per cent (the husband’s entitlement) is $508,407. However, the husband retained net assets to the value of $230,000, and thus the amount to be paid to him by the wife is $278,407.
The wife opposed the appeal on the basis that although certainly one of the adjustments sought by the husband should be made, namely the costs of sale and the adjustments of $10,774, she disagreed that all of the two bank loans should be excluded, and that her motor vehicle should be included. However, her principal argument was that there were further adjustments that should be made as a result of the “incorrect legal characterisation of amounts in the property pool”, and issues “in relation to superannuation and termination and redundancy payments”. The wife claimed that if paragraph 3 was to be amended as the husband sought, then it would only be fair to also amend it as a result of these other alleged errors by the trial judge.
As I explained to the wife though, she had not filed a cross-appeal, and thus these further claims could not be taken into account.
In relation to her claim that only part of the two bank loans should be taken into account, that was not a matter raised with his Honour and it was not possible to go behind [73] of his Honour’s reasons.
With her motor vehicle, she failed to appreciate the force of [68] and [69] of his Honour’s reasons, namely that what was to be excluded was the $40,000 profit from the sale of the property, and not the motor vehicle.
Conclusion
Having found merit in the appeal, the appeal should be allowed and paragraph 3 of the order for property settlement varied to increase the amount to be paid by the wife to the husband from $234,694 to $278,407.
I understand that the wife has paid the sum of $234,694 to the husband in accordance with the order, and it is therefore a question of payment of the difference, namely $43,713. In the circumstances the wife should have a period of three months to pay that amount, and I will frame the order accordingly.
Costs
At the conclusion of the hearing the parties made submissions as to the issue of costs depending on the result of the appeal.
In the event the appeal was successful the husband sought an order for costs, but requested that written submissions be permitted because certain offers had been made which would be relevant to whether costs are ordered. If no costs were ordered though the husband sought a costs certificate pursuant to the provisions of the Federal Proceedings (Costs) Act 1981 (Cth).
The wife opposed any order for costs, and sought a costs certificate if no order was made.
The issue of costs is governed by s 117 of the Family Law Act 1975 (Cth), but whether an order for costs is made is entirely within the discretion of the court. Thus, although the husband has been successful in the appeal (s 117(2A)(e)), and assuming for the moment that there are offers of settlement that favour the husband’s position (s 117(2A)(f)), it is still open to this court to make no order for costs, or put another way, leave each party to bear their own costs (s 117(1)).
The errors of course were the trial judge’s, and the wife’s counsel no more led his Honour into those errors than did the husband’s counsel. Further, it was not unreasonable for the wife, acting as she was without legal representation, to take the position that she did on appeal, and thus despite there apparently being offers made by the husband, I am not disposed to make an order for costs against the wife.
The appeal is being allowed on a question of law, and with no order for costs being made, both parties are entitled to costs certificates, and I will so order.
I certify that the preceding thirty-two (32) paragraphs are a true copy of the
reasons for judgment of the Honourable Justice Strickland delivered on 28 April 2017.
Associate:
Date: 28 April 2017
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