Beckham & Quarrington
[2019] FamCAFC 144
•20 August 2019
FAMILY COURT OF AUSTRALIA
| BECKHAM & QUARRINGTON | [2019] FamCAFC 144 |
| FAMILY LAW – APPEAL – PROPERTY – De Facto relationship – Where the appellant appeals from an order granting the respondent leave pursuant to s 44(6) of the Family Law Act 1975 (Cth) to apply for property settlement – Where the parties agreed that the primary judge erred in the approach taken to the question of hardship – Leave to appeal required – Appeal conceded by the respondent – Appeal allowed – Matter remitted for rehearing. FAMILY LAW – APPEAL – COSTS – Where an application for costs made by the appellant against the respondent was appropriately withdrawn – Where neither party could be made responsible for the deficiencies in the trial reasons – Costs certificates to issue for the appeal and rehearing. |
| Family Law Act 1975 (Cth) ss 44(5)(a)(i), 44(6) Federal Proceedings (Costs) Act 1981 (Cth) ss 6, 8, 9 |
| BZD17 v Minister for Immigration and Border Protection (2018) 263 FCR 292; [2018] FCAFC 94 Whitford and Whitford (1979) FLC 90-612; [1979] FamCA 3 |
| APPELLANT: | Mr Beckham |
| RESPONDENT: | Ms Quarrington |
| FILE NUMBER: | BRC | 12076 | of | 2017 |
| APPEAL NUMBER: | NOA | 119 | of | 2018 |
| DATE DELIVERED: | 20 August 2019 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Ryan, Kent & Austin JJ |
| HEARING DATE: | 30 July 2019 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 21 November 2018 |
| LOWER COURT MNC: | [2018] FCCA 3885 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Hartwell |
| SOLICITOR FOR THE APPELLANT: | C Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Page QC, directly briefed from the respondent |
Orders dated 30 July 2019
It is ordered by consent:
The appellant have leave to appeal from the orders made in the Federal Circuit Court of Australia on 21 November 2018.
The appeal be allowed.
Order 1 of the orders made on 21 November 2018 be set aside.
That the matter be remitted for rehearing before a Judge of the Federal Circuit Court of Australia other than Judge Vasta.
There be no order as to costs.
IT IS FURTHER ORDERED:
The Court grants to the appellant a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 (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 the appellant in relation to the appeal.
The Court grants to the respondent a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act 1981 (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 in respect of the costs incurred by the respondent in relation to the appeal.
The Court grants to each of the parties a costs certificate pursuant to s 8 of the Federal Proceedings (Costs) Act 1981 (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 rehearing ordered.
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 Beckham & Quarrington 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).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE |
Appeal Number: NOA 119 of 2018
File Number: BRC 12076 of 2017
| Mr Beckham |
Appellant
And
| Ms Quarrington |
Respondent
REASONS FOR JUDGMENT
Ryan J
By Notice of Appeal filed 18 December 2018, Mr Beckham (“the appellant”) applied for leave to appeal, and, assuming leave was granted, to appeal an order made by a judge of the Federal Circuit Court of Australia (“the Federal Circuit Court”) on 21 November 2018. By that order, Ms Quarrington (“the respondent”) was granted leave pursuant to s 44(6) of the Family Law Act 1975 (Cth) (“the Act”) to apply for the adjustment of property, consequent upon what she said was the breakdown of the parties’ de facto relationship. Section 44(5)(a)(i) of the Act requires proceedings for a property settlement between de facto parties to be commenced within two years of the end of the relationship. On the respondent’s case, that period had expired and she thus needed an extension of time in order to commence proceedings.
It is common ground in the appeal that in his Honour’s brief ex tempore reasons for judgment, the primary judge correctly identified the statutory provisions by which the application for an extension of time should be determined. Relevantly, that leave may be given where the Court is satisfied that hardship would be caused to a party or a child if leave were not granted. His Honour was satisfied that this was the case; that hardship being that “…the wife still has the hardship of having that debt against her name” [22]. Namely, a mortgage debt raised in the respondent’s name as trustee of a family trust. It is noteworthy that the respondent had been removed as trustee and orders had been made in another court which, upon compliance, would have seen her freed from any involvement with the mortgage debt.
Before us, Queen’s Counsel for the respondent conceded that the primary judge misunderstood the term “hardship” and failed to appreciate that he was required to weigh the applicant’s case against that of the respondent and to decide whether there was in fact a prima facie case, or, a real probability of success, that would, if leave were granted, alleviate hardship (Edmunds & Edmunds (2018) FLC 93-847 at [48]). Having properly conceded that the primary judge erred in the approach taken to the question of hardship, Queen’s Counsel for the respondent agreed that the appellant should be given leave to appeal and the appeal be allowed. We agreed, and thus, orders were made as set out at the commencement of these reasons, on the basis that our reasons would be given later. These are my reasons.
I also agree with the submission made on behalf of the appellant that the primary judge failed to address the arguments advanced at trial about why, even if his Honour was satisfied as to hardship, the discretion to grant leave should not be exercised in favour of the respondent. In short, the reasons for judgment failed to engage with the appellant’s case advanced below.
In many respects, the difficulties identified with the judgment under appeal resonate with those described in Symons v White (Sydney Catholic Schools) [2018] FCA 949 (“Symons”). In that case, speaking about the approach to ex tempore judgments, Bromwich J said:
17.Many simple or straightforward cases, or cases obviously devoid of any merit, may well lend themselves to an ex tempore or oral judgment. When used appropriately, as it is by many judges of this Court and of the Federal Circuit Court, that is likely to significantly lessen the burden on a primary judge in performing his or her judicial function, and undoubtedly helps to contain a burgeoning judicial workload and avoid unnecessary costs being incurred. However, the use of ex tempore judgments does not absolve a judge of the responsibility of giving proper reasons: BZD17 at [26].
18.When ex tempore judgments are used inadequately or inappropriately, the quality of justice delivered may fall below acceptable standards, perceived efficiency may be illusory, the burden of performing the primary judicial function properly may shift to an appeal court, costs may be greatly increased (especially due to an appeal) and the final resolution of a dispute may be delayed, rather than accelerated. In those circumstances, litigants suffer (especially successful litigants if the original decision does not survive an appeal and a costs order is made). In the event of remittal to another judge, which is often necessary, if not inevitable, when determinative or otherwise indispensable adverse credit findings are made that cannot be replicated on appeal, the additional burden then falls on the judicial colleagues of the primary judge.
Reference in Symons to BZD17 is to BZD17 v Minister for Immigration and Border Protection (2018) 263 FCR 292 (“BZD17”). The consequences of an inadequate ex tempore judgment identified in Symons at [18] operate in this case.
Before us, counsel for the respective parties agreed that this was not a case where the Full Court should re-exercise discretion and that the appropriate order was for remittal to another judge of the Federal Circuit Court. We agreed with the parties that in this case, remittal to a judge other than the primary judge was the appropriate course. Following the establishment of special leave to appeal to the High Court, it is generally accepted that intermediate courts of appeal ought to be regarded as the final court of appeal (Morris v R (1987) 163 CLR 454 at 475 cited with approval in Smith Kline and French Laboratories (Australia) Ltd v The Commonwealth (1991) 173 CLR 194 at 217-218). The effect of this is that in cases where the court under appeal has failed to determine the necessary facts, or, as occurred in BZD17, the substantive grounds of judicial review, an order for remittal is generally appropriate.
Costs
An application for costs was made by the appellant against the respondent, which was appropriately withdrawn. This is not a matter in which an order for costs could properly be made against the respondent who was in no way responsible for the deficiencies in the trial reasons.
It is appropriate that the parties receive costs certificates pursuant to the Federal Proceedings (Costs) Act 1981 (Cth) for the appeal and rehearing.
Kent J
The determinative issues in the proceedings heard and determined by the primary judge in the Federal Circuit Court on 21 November 2018 were, first, whether Ms Quarrington established “hardship” within the meaning of s 44(6) of the Family Law Act 1975 (Cth) (“the Act”). Second, if such hardship was established, whether the discretion conferred by s 44(6) to grant leave to bring financial proceedings more than two years after the end of a de facto relationship ought be exercised in favour of Ms Quarrington.
In the result, the primary judge granted Ms Quarrington leave pursuant to s 44(6) to apply for a property settlement. The central question raised by Mr Beckham in his application for leave to appeal from the primary judge’s determination, and in his appeal if leave be granted, is whether the primary judge made errors of law in granting that leave.
At the outset of the hearing before us on 30 July 2019, Mr Page of Queen’s Counsel, who advised that he appeared on a direct brief basis on behalf of Ms Quarrington, tendered to us an Outline of Argument opposing Mr Beckham’s application for leave to appeal. However, that apparent opposition proved to be transitory. Soon into the hearing, Mr Page frankly conceded to the effect that the reasons for judgment of the primary judge demonstrated some fundamental misconceptions on the part of the primary judge as to the proper meaning of “hardship” in s 44(6) and the proper application of that provision.
Consequent upon that concession were Mr Page’s further concessions on behalf of Ms Quarrington to the effect that leave to appeal ought be granted; the relevant order set aside; and for the proceedings to be remitted for rehearing by a judge other than the primary judge.
We were satisfied of the errors of the primary judge referred to and that such orders on appeal ought be made. We were also satisfied that as the appeal was to be allowed by reason of errors of law on the part of the primary judge, each party was entitled to costs certificates pursuant to the Federal Proceedings (Costs) Act 1981 (Cth) in respect of the appeal and the rehearing.
We made the orders at the conclusion of the hearing on 30 July 2019 and advised the parties that we would deliver reasons subsequently. These are my reasons for joining in the making of those orders.
Applicable principles for determining the question of hardship
The applicable principles were recently discussed by the Full Court of this Court, by reference to authority, in Gadzen & Simkin (2018) FLC 93-871 (“Gadzen”). These relevant passages from that judgment bear repetition. After setting out the relevant statutory provisions, the Full Court continued from [29] as follows:
29.The statutorily expressed requirements for the grant of leave in s 44(3) of the Act are in identical terms, for all practical purposes, as those requirements with the grant of leave under s 44(6). It follows that authoritative pronouncements as to the principles applicable to the operation of s 44(3) apply equally to s 44(6). In Whitford and Whitford the Full Court stated:
Thus, on an application for leave under sec. 44(3), two broad questions may arise for determination. The first of these is whether the Court is satisfied that hardship would be caused to the applicant or a child of the marriage if leave were not granted. If the Court is not so satisfied, that is the end of the matter. If the Court is so satisfied, the second question arises. That is whether in the exercise of its discretion the Court should grant or refuse leave to institute proceedings.
30.Self-evidently, the Full Court there and subsequent Full Courts (as will be discussed) have emphasised that hardship within the meaning of the section must first be established for the discretion to grant leave to arise.
31. In discussing hardship the Full Court in Whitford said:
The hardship referred to in sec. 44(4) is the hardship which would be caused to the applicant or a child of the marriage if leave were not granted. The loss of the right to institute proceedings is not the hardship, to which the subsection refers. It is with the consequences of the loss of that right, with which the subsection is concerned. The requirement, that the Court must be satisfied that hardship would be caused if leave were not granted, implies that it must be made to appear to the Court that the applicant would probably succeed, if the substantive application were heard on the merits. If there is no real probability of success, then the Court cannot be satisfied that hardship would be caused if leave were not granted. Further, the matter with which the Court is concerned is not whether the applicant or a child is suffering hardship, but the question is whether the applicant or a child would suffer hardship if leave were not granted. If the probable result of the hearing on the merits is that the hardship is not likely to be alleviated, then the Court cannot be satisfied that the applicant or a child would suffer hardship if leave were not granted.
32.The Full Court then proceeded to discuss the meaning of “hardship”. In the course of that discussion the Full Court said:
In our view the meaning of “hardship” in subsec. 44(4) is akin to such concepts as hardness, severity, privation, that which is hard to bear or a substantial detriment. Cf. the meanings assigned to “hardship” in the Shorter Oxford Dictionary and in Webster’s New International Dictionary…
…
In ordinary parlance, hardship means something more burdensome than “any appreciable detriment”. We consider that in subsec. 44(4) the word should have its usual, though not necessarily its most stringent, connotations. It is impossible to lay down in advance what particular facts may or may not amount to hardship in the relevant sense. As a general proposition it might be said that, the inability of an applicant to pursue a claim which in the circumstances of the applicant or a child of the marriage is trifling, generally will not cause hardship. Similarly, where the costs which the applicant will have to bear himself or herself are about as much or more than what the applicant is likely to be awarded on a property claim, ordinarily hardship would not result if leave to institute proceedings were not granted. But otherwise we find no warrant in either subsec. 44(3) or 44(4) for saying that that the right or entitlement lost must be a substantial one.
(As per original)
33.In Althaus and Althaus Evatt CJ (with whom Marshall SJ and Strauss J agreed) observed of earlier cases:
…Now to some extent there may be an exercise of semantics involved here. The case of McDonald referred to a reasonable prima facie case as the test. Other cases such as McKenzie and Whitford suggest that the applicant needs to show that she would probably succeed. In the case of Perkins and Perkins (1979) FLC 90-600, Lindenmayer J. suggested that the test was that there was a reasonable probability of the claim being successful…
In my opinion, sec. 44(3) and (4) are not intended to require a detailed hearing on the merits to determine whether the applicant’s claim will succeed. The exercise is to determine whether there is a reasonable claim to be heard. That is the essence of the inquiry into whether hardship will be suffered by denying the applicant the right to litigate that claim.
34. In Hall and Hall the Full Court said:
Fundamental to that [a finding of hardship] is a determination of the quality or character of the potential claim. In relation to that different cases have used somewhat different phrases to describe it so that it has become something of a matter of semantics to describe in different ways what is really the same basic concept…
35. In Sharp the plurality of the Full Court observed:
17. It is well-accepted that hardship for these purposes is more than the loss of a right to commence proceedings. It is the consequences attending the loss of the right to commence proceedings that constitutes hardship. That is a matter to be determined by the circumstances of the particular case.
18. In assessing hardship in this context the well-established test is that the applicant must have a prima facie claim worth pursuing or a “real” probability of success. Further, leave will not be granted if to do so would not, in the substantive result, alleviate that hardship. However, whether or not hardship exits is not to be assessed only by reason of the monetary value of the probable order to be made if leave were granted.
36.In Edmunds the Full Court recently cited with approval the judgment in Sharp and said:
47.As the Full Court pointed out in Sharp at [18], “the well-established test is that the applicant must have a prima facie claim worth pursuing or a ‘real’ probability of success. Further, leave will not be granted if to do so would not, in the substantive result, alleviate that hardship”.
48.That involves a consideration, but not a final determination, of the nature of the applicant’s claim. In doing so, the Court must weigh the applicant’s case against that of the respondent’s and form a view as to whether there is in fact a prima facie case, or a real probability of success, that would, if leave were granted, alleviate hardship.
37.It follows from these authorities that the starting point in determining an application for leave is to consider the question of hardship which requires for its existence a conclusion that an applicant has a prima facie or arguable case of substance having regard to all of the circumstances of the case. That must take into account the costs or likely costs to be incurred in pursuing the claim.
(Footnotes omitted)
It is analogous to the approach taken by the primary judge in this case that, in Gadzen, the primary judge in that case had merely referred to the applicant’s strained financial circumstances in reaching a conclusion to the effect that hardship was established. At [43] and [44] the Full Court observed of that conclusion as follows:
43.We accept the submissions of the de facto husband that having recited the evidence of the de facto wife as to her current financial circumstances the trial judge wrongly found that such evidence was “sufficient to demonstrate hardship” without addressing or otherwise referring to the nature or quality of the de facto wife’s potential claim. All the trial judge expressed as one of her conclusions (at [32(c)]) is:
The applicant has prima facie a claim under the Family Law Act.
That conclusion is unsupported by any analysis of the de facto wife’s claim.
44.The trial judge thus applied the wrong legal test to determining the question of hardship and failed to consider and determine whether or not the de facto wife had a prima facie or arguable claim that was substantial having regard to all the circumstances of the case, including her potential costs in pursuing that claim.
Errors of law of the primary judge
The obvious means by which a primary judge identifies the proper meaning and interpretation of a statutory provision is for the primary judge to consider and apply authoritative judicial pronouncements, binding upon the judge, as to that meaning and interpretation. The equally obvious means by which a primary judge demonstrates that the judge has acted upon correct principle is to cite one or more of such leading authorities in the judgment, or to at least sufficiently identify, by statement, the applicable principles acted upon or applied.
The primary judge here made no reference whatsoever in his reasons for judgment to any authority binding upon him as to the interpretation and application of s 44(6) of the Act. That would not be fatal if there were at least a correct articulation of principle consistent with established and binding authority. However, the extemporaneous reasons of the primary judge evidence that his Honour acted upon his own notion (with respect to his Honour, one which was misconceived) as to the meaning to be given to “hardship” in s 44(6) and as to the operation of the section once hardship is established.
Taken from the primary judge’s reasons for judgment, it can be seen that the primary judge did not engage with even a cursory assessment of Ms Quarrington’s potential property claim even were her evidence to be accepted. As Mr Page acknowledged in argument before us, none of the matters summarised in Ms Quarrington’s Outline of Argument, at paragraph 2, both in support of the existence of a de facto relationship (disputed by Mr Beckham) as well as in support of Ms Quarrington’s claim, were discussed by the primary judge.
Thus, it can be seen that the primary judge did not engage with the fundamental question as to the quality or character of Ms Quarrington’s potential property claim, nor did the primary judge identify how it was that the relevant consequences attending any loss of the right to prosecute that claim amounted to hardship within the meaning of the section.
In circumstances where the appeal is conceded, it is unnecessary to traverse the facts of the case in detail. Suffice to observe that Ms Quarrington’s primary argument about hardship was that she was personally liable for a mortgage debt upon a real property because she was named as the legal owner/mortgagor of that property. In this respect, orders had been made in the Supreme Court of Queensland (“Supreme Court”) which, subject to being put into effect, removed that liability albeit that those orders remained executory at the time of the hearing of the proceedings before the primary judge. There was no suggestion that the Supreme Court orders were not enforceable.
It can be seen that the primary judge based his finding of “hardship” solely on the existence of that debt in Ms Quarrington’s name and finally his disbelief in Mr Beckham’s submissions as to the ease of the removal of that debt (reasons at [22] and Transcript 20 November 2018, p.5 line 44 and p.6 lines 24-26; Transcript 21 November 2018, p.13 line 34 to p.14 line 37).
Mr Beckham argued before the primary judge that the debt in Ms Quarrington’s name was held in her capacity as a trustee and that, pursuant to a relevant trust declaration, she was entitled to indemnity for all such debts. Mr Beckham also sought to highlight that Ms Quarrington’s sole complaint which, on her case, evidenced “hardship” was capable of remedy through other means. Mr Beckham pointed to the feature that Ms Quarrington had recourse through the Supreme Court to enforce the orders made in that court which would relieve her of any debt or liability. The primary judge did not engage with any of these arguments and did not provide any reasons for rejecting these central contentions of Mr Beckham in the proceedings. The primary judge was in error in failing to engage with centrally important issues raised.
Further, there was no attempt by the primary judge to address the “second question” referred to in Whitford and Whitford (1979) FLC 90-612, the discretionary considerations. Indeed, the primary judge’s reasons for judgment expose what would appear to be a further misunderstanding on his Honour’s part as to the existence of a discretion to exercise, once hardship is established. His Honour seems to have proceeded on the basis that a finding of hardship was determinative and all that is required. At [18] and [19], the primary judge said:
18.Whilst one may forgive the wife for not looking at property settlement while she was still living under the same roof, there does [sic] no need, under the legislation, for the Court to be looking at the reason why the application is made after the standard application period.
19.All the Court has to look at is whether there would be hardship caused to the party or a child if leave were not granted.
(Emphasis added)
Finally, it follows from the foregoing that the primary judge’s reasons for judgment were inadequate to explain the conclusion the primary judge reached. It is trite that inadequacy of reasons is an error of law.
I note in passing that it now appears to be well settled that leave to appeal is required from an order granting leave to institute proceedings under s 44(6) of the Act (see, Emamy and Marino (1994) FLC 92-487 at 81,075 overruling Thallon and Thallon (1992) FLC 92-322 in relation to the analogous s 44(3); see also Simonds (Deceased) & Coyle (2019) FLC 93-895 at [14]).
For these reasons I joined in the making of the orders which were made by the Court on 30 July 2019.
Austin J
I agree with the reasons of my colleagues.
I certify that the preceding twenty-nine (29) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Ryan, Kent & Austin JJ) delivered on 20 August 2019.
Associate:
Date: 20 August 2019
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