Bishop and Bishop
[2012] FamCAFC 63
•11 May 2012
FAMILY COURT OF AUSTRALIA
| BISHOP & BISHOP | [2012] FamCAFC 63 |
| FAMILY LAW – APPEAL – Application to extend time to appeal – applicant conceded little explanation for three month delay – certain grounds of appeal found to be capable of success or at least arguable – some prejudice could be assumed to respondent if granted – discretion exercised to grant extension in order to avoid injustice – applicant to pay costs of the respondent of and incidental to the Application |
| Family Law Act 1975 (Cth) |
| Coghlan v Coghlan (2005) FLC 93-220; (2005) 33 Fam LR 414 Gallo v Dawson (1990) 93 ALR 479 |
| APPLICANT: | Mr Bishop |
| RESPONDENT: | Mrs Bishop |
| FILE NUMBER: | CAC | 142 | of | 2008 |
| APPEAL NUMBER: | EA | 5 | of | 2012 |
| DATE DELIVERED: | 11 May 2012 |
| PLACE DELIVERED: | Canberra |
| PLACE HEARD: | Canberra |
| JUDGMENT OF: | Finn J |
| HEARING DATE: | 20 March 2012 |
| LOWER COURT JURISDICTION: | Federal Magistrates Court |
| LOWER COURT JUDGMENT DATE: | 11 August 2011 |
| LOWER COURT MNC: | [2011] FMCAfam 790 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Batey |
| SOLICITOR FOR THE APPLICANT: | Garden Montgomerie Solicitors |
| COUNSEL FOR THE RESPONDENT: | Mr Brzostowski |
| SOLICITOR FOR THE RESPONDENT: | Walsh Blair Lawyers |
Orders
The husband be granted an extension of time to file a notice of appeal against the orders made by Federal Magistrate Lindsay on 11 August 2011 (as amended on or about 27 September 2011), and to this end the husband have leave to file such notice of appeal within 7 days of the date of these orders.
The husband pay the costs of the wife of and incidental to his Application (filed 23 December 2011) seeking an extension of time to appeal, with such costs to be assessed in default of agreement.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Bishop & Bishop has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT CANBERRA |
Appeal Number: EA 5 of 2012
File Number: CAC 142 of 2008
| Mr Bishop |
Applicant
And
| Mrs Bishop |
Respondent
REASONS FOR JUDGMENT
This is an application filed on 23 December 2011 on behalf of Mr Bishop (“the husband”) for leave to appeal out of time orders for property settlement made by Lindsay FM on 11 August 2011 (as amended pursuant to “the slip rule” on or about 27 September 2011). The orders were made in proceedings between the husband and Mrs Bishop (“the wife”). The wife opposes the grant of an extension of time for the husband to appeal the orders.
The orders sought to be appealed by the husband resulted in a division of the net value of certain assets, which his Honour found to be $1,134,470.78, in the proportions of 55/45% in favour of the husband. His Honour excluded from his division not only the parties’ superannuation interests (valued at $34,507.00 for the husband and $96,650.00 for the wife), but also the assets and /or monies attributable to an inheritance by the wife (which totalled some $207,000.00).
The particular orders which have present relevance are in their amended form as follows:
(1)…
(a)That the husband do pay to the wife within sixty (60) days the sum of FOUR HUNDRED AND TWENTY ONE THOUSAND, THREE HUNDRED AND TWENTY THREE DOLLARS AND THIRTY-FIVE CENTS ($421,323.35);
(b)Contemporaneously with such payment the wife do transfer to the husband all of her interest in the real property situate at and known as [E] […] (hereinafter “the [E] property”);
…
(3)In the event that the husband fails to comply with paragraph 1(a) hereof, the [E] property be sold and the net proceeds of sale utilised to satisfy the payment to the wife of the sum referred to in paragraph 1(a) hereof.
(4)The parties be at liberty to submit a draft order relating to any further terms or conditions sought by either of them in relation to the circumstances of the default referred to in paragraph (3) hereof.
The principles in Gallo v Dawson
The principles which govern an application to extend time for complying with rules of court, including the rules concerning the time in which an appeal must be filed, were explained by McHugh J in Gallo v Dawson (1990) 93 ALR 479 at 480 and 481 in the following way:
The discretion to extend time is given for the sole purpose of enabling the court or justice to do justice between the parties: see Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1978] VR 257 at 262. This means that the discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the applicant. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time: see Avery v No 2 Public Service Appeal Board [1973] 2 NZLR 86 at 92; Jess v Scott (1986) 12 FCR 187 at 194 5 ; 70 ALR 185 When the application is for an extension of time in which to file an appeal, it is always necessary to consider the prospects of the applicant succeeding in the appeal: see Burns v Grigg [1967] VR 871 at 872; Hughes, at 263 4; Mitchelson v Mitchelson (1979) 24 ALR 522 at 524. It is also necessary to bear in mind in such an application that, upon the expiry of the time for appealing, the respondent has “a vested right to retain the judgment” unless the application is granted: Vilenius v Heinegar (1962) 36 ALJR 200 at 201. It follows that, before the applicant can succeed in this application, there must be material upon which I can be satisfied that to refuse the application would constitute an injustice. As the Judicial Committee of the Privy Council pointed out in Ratnam v Cumarasamy [1965] 1 WLR 8 at 12; [1964] 3 All ER 933 at 935:
The rules of court must prima facie be obeyed, and in order to justify a court in extending the time during which some step in procedure requires to be taken there must be some material upon which the court can exercise its discretion.
… A case would need to be exceptional before a court would enlarge by many months the time for lodging an appeal simply because the applicant had refrained from appealing until he or she had researched the issues involved. In Hughes McInerney J pointed out (at 263) that one object of fixing time under court rules is “to achieve a time table for the conduct of litigation in order to achieve finality of judicial determinations”. When the time for appealing has expired, the litigation is at an end; the successful party is entitled to the benefit of the judgment in his or her favour. At that stage, the successful party has a “vested right to retain the judgment”. It would make a mockery of [the relevant rule] if, months after the time for appealing has expired, the unsuccessful party could obtain an extension of time on the ground that he or she had delayed appealing because that person wanted to research the issues involved. Lack of legal knowledge is a misfortune, not a privilege.
It was against the background of these principles that the case for both parties was argued before me.
The cases for and against this application to extend time to appeal
In arguing the husband’s case that an injustice would result if he was not granted an extension of time in which to appeal, his counsel was prepared to concede that there had been some delay between the making of the orders on 11 August 2011 (and even their amendment in late September) and the filing of the application for the extension of time on 23 December 2011. Counsel was also prepared to concede that the events which constituted the husband’s explanation for the delay (which I will later briefly summarise) could only be described as, or attributed to, “dithering” on the part of the husband. However, Counsel submitted that the important or decisive issue in this case was that there would be merit in the appeal. Counsel then endeavoured to demonstrate that there were three significant matters arising out of the Federal Magistrate’s reasons and raised by the proposed grounds of appeal which could be relied on to establish that the appeal was likely to have merit. I will refer to those matters in due course.
In opposing a grant to the husband of an extension of time to appeal, Senior Counsel for the wife placed great reliance on the lack of an adequate explanation by the husband for the delay and on the fact that the wife now had “a vested right to retain the judgment.” Further, Senior Counsel endeavoured to demonstrate that there was no merit in the proposed appeal, and he also attempted to rely on the husband’s conduct (as submitted to be demonstrated by figures included in his material), and on the relatively long history of the litigation between these parties.
The delay in seeking to appeal and the reasons for the delay
It is unnecessary to say a great deal about the issues of delay and the reasons for it because of the concession by Counsel for the husband that there was a delay and that it can only be explained by, to use Counsel’s expression, “dithering” on the husband’s part.
In summary, the husband explained in his affidavit in support of his application to extend time to appeal that:
·the property settlement proceedings between the parties were originally heard by the Federal Magistrates Court on 23 February 2009 with judgment being delivered on 18 September 2009;
·both parties appealed the orders made on 18 September 2009, with those orders then being set aside by consent on 21 July 2010;
·the matter was reheard by Lindsay FM on 11 November 2010 with judgment being delivered on 11 August 2011; and
·by the time of the delivery of that judgment, Senior Counsel who appeared for the husband had retired and was not available to advise in relation to an appeal.
But perhaps more relevantly, the husband went on to explain in his affidavit that after receiving the orders and reasons for judgment of Lindsay FM, he realised that he would have to sell the rural property, E, in order to pay the wife the sum ordered of over $400,000.00. He further explains that he was then advised by his accountant that the sale would lead to a capital gain tax assessment, and it was also realised that costs of sale would be incurred. The husband admits that he did discuss these issues with his then solicitor and with another counsel on 5 September 2011. However, it was only after consulting another solicitor on 3 December 2011 and then having a conference with yet another counsel on 20 December 2011, that the application for leave to appeal out of time was filed on 23 December 2011.
Senior Counsel for the wife submitted that the husband had provided only “a chronology” of events since the delivery of the judgment on 11 August 2011, and that he had not provided any real reason, or explanation, for his delay in seeking to appeal.
As I have already said, Counsel for the husband conceded that the husband’s actions could only be described as “dithering” and, at least as I understood his Counsel’s submissions, the husband would therefore in these circumstances have to show that there was likely to be considerable merit in the appeal.
My conclusions regarding the issue of delay are: that there was a delay in seeking to appeal of just over four months (that is, 11 August 2011 to 23 December 2011); that this delay was just over three months beyond the prescribed period, which is not an inordinate delay; but that in that period the husband was concerned by the implications of the judgment for him and was certainly thinking about an appeal.
However, as was submitted by Senior Counsel for the wife, it is important that there be finality in litigation and that once the prescribed appeal period has passed, parties should be able to be confident that there will not be an appeal and that their rights under the judgment in question have, so to speak, vested.
It is therefore very important in this case, as was recognised by Counsel for the husband, to consider whether there is sufficient likelihood that the appeal will be found to have merit such as would in the interests of justice warrant interference with the wife’s now vested right to retain the judgment.
The issues to be raised on the appeal
Counsel for the husband submitted that there were three significant issues which would be raised on appeal and which would thus justify the grant to the husband of an extension of time to appeal notwithstanding the length of the delay and the lack of a satisfactory explanation for the delay.
The first of these issues related to the Federal Magistrate’s assessment of the parties’ contributions as being equal.
His Honour found (at paragraph 59 of his reasons) that the husband’s initial ownership of a property known as T (which at the maximum could be valued at $300,000.00, but much less on the wife’s case) was “a significant initial contribution” which “must be given real rather than nominal significance when evaluating the contributions… .” Later (at paragraph 60) his Honour found that the contributions by the husband of livestock (valued at approximately $20,000.00) at the commencement of the relationship must be given some weight, and also (at paragraph 62) that there had been a contribution of farm machinery (which could be valued at $50,000.00 after some repayments) made on behalf of the husband by his parents.
Then, later in his reasons (at paragraph 77) his Honour expressed the view that these contributions would have “required some small weighting in the husband’s favour (something of the order of ten percentum i.e. 55/45% in the husband’s favour).”
Ultimately, however, his Honour concluded that these calculations should in effect be off-set by certain capital contributions made by the wife amounting to $45,000.00 (and which were detailed at paragraph 72 of his reasons) and by her post-separation contributions to support the 17 year old child of the marriage (detailed at paragraph 73 of the reasons).
It was the submission of Counsel for the husband, as I understood it, that when the value of these contributions by, or on behalf of, the husband was considered against the value of the parties’ present property (excluding the wife’s inherited property and the parties’ superannuation interests), the “erosion” of the weight given to these calculations was “extraordinary”.
The ultimate assessment of contributions is, of course, a highly discretionary matter, and thus should be relatively immune from appellate interference. However, given what might be described as the long history of debate in this jurisdiction concerning the treatment of so-called “initial contributions”, there can be no certainty that at least two out of three members of a Full Court might not consider that in this case the Federal Magistrate’s assessment of the parties’ contributions has exceeded the broad range in which reasonable disagreement is possible. Accordingly, I conclude that the proposed grounds of appeal directed to his Honour’s contribution assessment would certainly be arguable.
The second challenge contained in the proposed grounds of appeal and relied on by Counsel for the husband in support of the application for an extension of time to appeal, was his Honour’s treatment of the parties’ superannuation interests, which for the husband were valued at $34,507.00 and for the wife at $96,650.00.
His Honour determined (at paragraph 14 and again at paragraph 76 of his reasons) to treat the superannuation interests as a separate pool as he was entitled to do (according to decisions such as Coghlan v Coghlan (2005) FLC 93-220), and he referred (at paragraphs 83 and 88) to those interests when considering whether any adjustment ought to be made in favour of either party on account of the matters specified in s 75(2) of the Family Law Act 1975 (Cth). However, as was pointed out by Counsel for the husband, his Honour does not appear to have carried out the separate exercise of assessing contributions to, and considering whether any adjustment on account of the
s 75(2) matters was required in relation to, the superannuation interests as authorities such as Coghlan require be done where those interests constitute a separate asset pool.
In the present context I cannot determine whether this apparent failure on his Honour’s part would have ultimately led to a different overall result. I can only conclude that the proposed grounds of appeal directed to his Honour’s treatment of the superannuation interests are certainly arguable, and indeed could well succeed.
The third matter raised by Counsel for the husband related to his Honour’s apparent failure in making the order (Order 3) for the sale of the property E in the event of a default by the husband in the payment of the sum due to the wife, to include provision for the costs of sale and for capital gains tax which might arise on the sale.
It is, of course, true that his Honour endeavoured to address this eventuality in paragraph 93 of his reasons and also in Order 4 of his orders. However, I consider that there is much force in the submission of Counsel for the husband that the issues of costs and tax payable in the event of a sale of E could well go beyond the mere “terms and conditions” referred to in Order 4, and that those matters might well require a re-assessment of the substance of the orders themselves and the percentage division underlying them. Again these issues are certainly arguable, and may not necessarily be defeated by the argument (raised by Senior Counsel for the wife) to the effect that the husband should have ensured that the Federal Magistrate had before him the necessary evidence about the costs and consequences of a sale.
Prejudice to the wife if extension granted
In her affidavit in support of her Response in which she sought the dismissal of the husband’s application for an extension of time to appeal, the wife can be read as relying on her own difficult financial position caused by the fact that the property settlement proceedings between the parties have not been finalised. Certain of the submissions of the wife’s Senior Counsel were also directed to her financial position, but with some issue being taken by Counsel for the husband with the content of the submissions made on behalf of the wife in relation to this matter.
On the material before me I cannot be satisfied whether or not there will be significant financial prejudice to the wife by permitting a further appeal in this matter. However, I would be prepared to assume that there will be some prejudice to her even if it only be a lack of certainty regarding her financial situation.
Conclusion
In my view, the decision in the case is a very finely balanced one. But having regard to my findings that there could well be merit in certain of the grounds of appeal and that the delay was not of an inordinate length, I consider that notwithstanding the assumed prejudice to the wife and the relatively long history of these property settlement proceedings, it could well result in injustice if I did not exercise my discretion to grant the husband an extension of time to appeal. I will therefore make the order sought by the husband, being that he be granted leave to file a notice of appeal within 7 days of the date of these orders.
Finally, in relation to the long history of these proceedings, it should be remembered that both parties appealed the first property settlement orders made by the Federal Magistrates Court, and both consented to the setting aside of those orders and the granting of a new trial.
I would also say that I have not been persuaded on the limited material before me that there was anything in the conduct of the husband that should cause me not to exercise my discretion in his favour.
Costs of this application
Notwithstanding that in his application the husband sought that the costs of this application should “be costs in the appeal”, before me his Counsel recognised and conceded that where a litigant seeks an indulgence from the Court, such as an extension of the time to appeal, the usual order would be that he or she, even if successful, should pay the other side’s costs.
Clearly, the wife in this case should not be further prejudiced by having to pay her costs in relation to this application by the husband. Accordingly, I will order that the husband pay those costs.
I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Finn delivered on 11 May 2012
Associate:
Date: 11 May 2012
0
5
1