Brandon & Brandon - [2008] FamCAFC 213

FAMILY COURT OF AUSTRALIA

BRANDON & BRANDON

[2008] FamCAFC 213

FAMILY LAW - APPEAL – From decision of Federal Magistrate – PROPERTY SETTLEMENT – Orders made altering property interests in a net pool of approximately $627,100.00, 20 per cent to the wife – Wife appealed – Her appeal attacked some particulars of the mathematical method used by the Federal Magistrate to determine the actual payment to the wife by the husband – Whether the Federal Magistrate erred in his treatment of legal fees paid by the husband on behalf of the wife – Whether the Federal Magistrate erred in his approach to the wife’s superannuation earned post-separation – Whether the Federal Magistrate erred in requiring the wife to repay monies to the husband which she took on separation – Whether the Federal Magistrate erred in refusing to allow the appellant’s reserved costs from three occasions – Whether the Federal Magistrate erred in not allowing interest to the wife on the judgment amount due to an adjournment of the trial allegedly caused by the husband’s default – Whether the Federal Magistrate erred in ordering costs of the trial against the wife – Appeal allowed but only in respect of the treatment of the wife’s paid legal costs

FAMILY LAW - APPEAL – Application to adduce further evidence out of time – Lateness of the application – Material was available prior to the trial – Application dismissed

FAMILY LAW - APPEAL – Wife’s application for costs of a further direction hearing with respect to preparation of the appeal – Application dismissed

FAMILY LAW - APPEAL – Costs of the appeal – Written submissions to be made by the parties

Family Law Act 1975 (Cth)

Whisprun Pty Ltd (formerly Northwest Exports Pty Ltd) v Dixon (2003) 200 ALR 447

APPELLANT:

MS BRANDON

RESPONDENT:

MR BRANDON

APPEAL NUMBER:

83L

2007

FILE NUMBER:

TVM

300

2005

DATE DELIVERED:

24 December 2008

PLACE DELIVERED:

Brisbane

PLACE HEARD:

Brisbane

JUDGMENT OF:

Warnick J

HEARING DATE:

By written submissions

LOWER COURT JURISDICTION:

Federal Magistrates Court

LOWER COURT JUDGMENT DATE:

1 August 2007

LOWER COURT MNC:

[2007] FMCAfam 935

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Mr J Bradshaw

SOLICITOR FOR THE APPELLANT:

Direct brief

SOLICITORS FOR THE RESPONDENT:

Georgeson & Company

Orders

That the appeal be allowed.
That order 2(a) of the orders of the Federal Magistrates Court made 1 August 2007 be amended by deleting the figure for “NET PROPERTY” namely $627,101.00 and substituting the figure $635,867.00.
That the application filed by the wife on 12 May 2008 be dismissed.
That either party be at liberty to make an application by way of written submissions in respect of costs incurred by him or her in relation to the appeal by filing such submissions at the Brisbane Registry of the Family Court and serving them on the other party within 21 days of the date hereof.
That the other party have a further 14 days in which to make written submissions in answer thereto by filing such submissions at the Brisbane Registry of the Family Court and serving them on the other party.
That either party be at liberty to reply to an answer by way of written submissions by filing such reply at the Brisbane Registry of the Family Court and serving it on the other party within a further 7 days.
That each party endorse on the cover sheet the date on which a copy of that submission was served on the other party.

IT IS NOTED that publication of this judgment under the pseudonym Brandon & Brandon 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 BRISBANE

Appeal Number: NA 83L of 2007
File Number: TVM 300 of 2005

MS BRANDON

Appellant

And

MR BRANDON

Respondent

REASONS FOR JUDGMENT

Mr Brandon was nearly 72 years of age when, in March 2001 in the Ukraine, he married Ms Brandon, then 51 years of age. The husband, a retired marine engineer, had travelled from Australia in February 2001 to meet the woman who shortly after became his wife and with whom he had established internet contact in mid-2000. Later in 2001, the parties established their matrimonial home in Australia, in a house already owned by the husband. However, within a few years, the marriage broke down and the parties separated in May 2004.
In August 2007, Federal Magistrate Coates made orders by way of alteration of their property interests. Of a net asset pool of about $627,000.00, he awarded 20 percent to the wife.
This appeal by the wife attacks some particulars of the mathematical method used by the Federal Magistrate to determine the actual payment to be made to the wife by the husband, who had the great bulk of the assets. As well, the wife challenges a refusal by the Federal Magistrate to award costs reserved on occasions of adjournment of the trial and a failure by Coates FM to allow interest on the judgment amount, from when the husband commenced proceedings to at least the date of the first adjournment. These arguments arise within six grounds of appeal. I will deal with each, but not in the order in which they appear in the Notice of Appeal. I will discuss those that relate to the substantive issues, before going to those relating to costs and interest.
The wife has filed an application seeking leave (out of time) to adduce further evidence in support of the challenge to the order that she pay the husband’s costs of the trial. I will discuss that application further when dealing with the appeal against the costs order.
The appeal was filed on 19 February 2008 after the wife obtained an extension of time within which to institute an appeal on 8 February 2008. I also made directions that day for the actions necessary to advance the appeal to a hearing by way of written submissions. There have been difficulties in getting the appeal ready. Because the timetable was not complied with, the matter was listed before me for further directions on 2 May 2008. On 12 May 2008 the wife filed an application accompanied by written submissions seeking that the husband pay the costs of the directions hearing of 2 May 2008. The Appeals Registrar directed that the husband file written submissions in reply in relation to the costs of the further directions hearing. These reasons also deal with that issue.

Ground 1. The Magistrate erred in his calculation by double dipping in relation to the husband respondent’s payment of the Appellant’s legal fees in the sum of $8,755.00.

In his reasons, the learned Magistrate listed gross assets as follows:
Assets
Cash  479,215.48
Cash  10,829.94
[T] Street (former matrimonial home)     130,000.00
Camry  5,000.00
Contents  3,000.00
Wife’s superannuation  2,440.00
Jewellery  300.00
$630,785.42
Coates FM described counsel as being in agreement as to the assets. He then identified a Mastercard liability, agreed as at the date of a conciliation conference, in the sum of $3,684.00, and he deducted this to achieve the figure of $627,101.00. He noted evidence that there were tax and possibly other liabilities as to which the parties were “awaiting notification from the Public Trustee”. (The husband had suffered a stroke in December 2005 and that and other health difficulties had rendered him incapable of giving instructions and in need of a litigation guardian, who was his daughter, A).
The first order made by Coates FM provided for the wife to transfer to the husband a half-interest (which, during the marriage, had been transferred by the husband to her) in the former matrimonial home. The second order provided for payment by the husband to the wife of “the payment sum” being such as:
“…represents 20% of the net property of the parties, after adjustments, as identified and calculated as follows:
(a)      NET PROPERTY  $627,101.00
Liabilities and taxation debt of  As quantified in
the husband’s estate                   writing by the Public Trustee
Queensland
SUBTOTAL  $A
GROSS PAYMENT`  (20% x $A)
(b)      GROSS PAYMENT  (20% x $A) less:
Legal costs paid on behalf of the wife  $8,766.00
Wife’s superannuation  $2,440.00
Wife’s jewellery  $300.00
Money withdrawn by the wife  $1,513.00
from a joint account
Costs of hearing  $7,500.00
  $20,519.00
“THE PAYMENT SUM”=  (20%A - $20,519.00)”
I note that an order sought in the Notice of Appeal is that the reference in order 2(a) to “Liabilities and taxation debt” be amended by the deletion of the term “liabilities”. This ground of appeal does not go to that point nor does any other ground.
This ground of appeal focuses on the deduction, from the gross payment to be made by the husband under order 2, of the legal costs paid on behalf of the wife by the husband.
The only mention of this figure in the reasons for judgment of Coates FM is as follows:
38.… There is also a liability of about $8800 for legal costs incurred by the wife and paid by the husband.
It does not seem to be in issue before me that it was appropriate to deduct this item from the amount that the wife should receive under order 2. However, the complaint of the wife is that the Federal Magistrate “double dipped”. As I will explain, I think there has been an error, which however is not accurately described as “double dipping”.
In my view, the correct methodology was to recognise that, had the husband not paid the wife’s legal costs, there would have been $8,766.00 available for inclusion in “the pool”. The Federal Magistrate did not include that item in the pool. Had he done so, then the wife would have been recognised (mathematically) as entitled to 20 percent of it. However, because she had received the total benefit of the legal fees, deduction from the gross amount payable by the husband was, and remains, appropriate.
In my view, the failure of the Federal Magistrate to include the legal fees in the asset pool was an error, the effect of which was to deprive the wife of approximately $1,753.00 (20 percent of $8,766.00).
Though the amount is small, the wife’s entitlement is modest and I think the error large enough in context to be corrected. I would do so by proposing that, in order 2(a), the net property of the parties be increased by the amount of the legal costs to $635,867.00.

Ground 2. The Magistrate erred in requiring the wife’s superannuation earnt post separation to be paid to the husband.

A short answer to this contention is that, at trial, the parties agreed that the wife’s superannuation be included in the asset table for division.
In any event, in a case in which the learned Magistrate took a global approach - and except by implication from this ground there is no attack on the aptness of that approach - the inclusion of the wife’s superannuation at trial was well within discretion and indeed consistent with that approach.

Ground 5. The Magistrate erred in requiring the wife to repay monies in the sum of $1,500.00 she took on separation.

The submissions on the wife’s behalf are that the wife (one assumes, on her evidence) needed the money she withdrew for living expenses and therefore they should not have been deducted.
The learned Magistrate does not discuss this item in his reasons for judgment but that absence is not the basis of the ground.
As can be seen from the figures set out in order 2, quoted above, the learned Magistrate deducted from the gross payment to be made by the husband “money withdrawn by the wife from the joint account - $1,513.00”. In my view, the absence of an add-back of this figure to the asset table produces a distortion the same as occurred in relation to legal costs of the wife paid by the husband. However, the difference to the wife is $302.00.
In my view, having regard to the presumption of correctness of orders, the absence of a ground of appeal going to the methodological error or the absence of reasons and the small amount, the learned Magistrate’s treatment of this item ought not be interfered with.

Ground 3. The Magistrate erred in refusing to allow the Appellant’s reserve costs on three occasions that the Respondent obtained an adjournment when the Respondent was not ready to proceed and the Appellant consented on the basis that the Respondent pay the Appellant’s costs.

As to reserved costs, the Federal Magistrate said:
103.I am asked to make a costs order. The costs order, I think, came about because Mr Bradshaw for the wife raised the issue as to whether I ought to make costs orders because of three sets of reserve costs. In response and in a nutshell, he says the husband has obstructed the case, which resulted in three adjournments of the matter. However, I note earlier that I was told that the wife consented to those adjournments. I think there is a difference between an ordered adjournment and an adjournment by consent because when any consent order is made with knowledge and any consent order is made on an informed basis.
An immediate question arises because, neither before the Federal Magistrate nor before me, have the precise dates of adjournment been stated. However, included in the list of the documents to be before me are three transcripts of hearings before Coker FM, and on each of those occasions, the substantive proceedings were adjourned. Taking those occasions as the relevant ones, perusal of the Federal Magistrates Court file discloses only orders of the later two of the occasions, reserving costs (though an order of 30 October 2006 – for which there is no transcript - reserved costs).
For present purposes, I will assume an order reserving costs was made on the first occasion for which there is transcript, 9 August 2006.
The submissions for the wife are, in short, that upon the three occasions of adjournment the husband’s case was not ready but the wife’s case was. However, counsel for the wife submits that on each occasion, he took the position that it would be unreasonable to oppose the adjournment, so that the husband’s case could be fully and properly presented. This approach was taken in the hope that “…it may be reciprocated in terms of a reasonable offer…”. Counsel argues in submissions that to deny the wife reserved costs in these circumstances is to discourage conciliatory approaches.
A difficulty for the wife with regard to these arguments is that there are no findings about the circumstances in which the adjournments occurred. As seen, each adjournment was granted not by Coates FM, but by Coker FM. However, I do not suggest, by my observation on their absence, that Coker FM was required, in the circumstances of a consent adjournment, to give reasons.
On 9 August 2006, counsel appeared for the wife. There was no appearance for the husband. Counsel informed the Federal Magistrate that there had been solicitors for the husband but that of late counsel had been communicating with the husband’s daughter, A. She was yet to “officially go on the record”. Counsel for the wife informed the court that the valuation of the former matrimonial home had not been carried out. Discussion quickly turned to the anticipated length of hearing and matters relating to preparation for trial. The transcript does not indicate that, save for the non-appearance on behalf of the husband, the matter was ready for trial and indeed indicates to the contrary. There are certainly no findings made that are critical of the husband’s position.
On 3 October 2006, A appeared, as did counsel for the wife. However, there had been no appointment of a litigation guardian for the husband. Counsel for the wife agreed to an adjournment, but requested costs thrown away. Coker FM said:
FEDERAL MAGISTRATE: All right. Ms [Brandon], Mr Bradshaw has indicated that he would, out of an abundance of fairness and it is very appropriate of him to do so I might add, to agree to an adjournment. But the fact is, this matter was listed for trial. Ma’am, I can’t give you legal advice but one thing off the cuff I’ll tell you is that you have no lawful right to settle a matrimonial claim without either, I would think at the very least a power of attorney - - -
I do not consider these remarks amount to findings of culpability, for the purposes of considering a costs order or even a reservation of costs.
On the last occasion of adjournment for which there is transcript, a solicitor appeared for the husband and counsel again appeared for the wife. Coker FM referred to the listing of the matter before him as an undefended hearing. The solicitor submitted that a hearing on that basis was no longer appropriate. A had still not been appointed as the case guardian but the solicitor advised that documents had been sent to the court the preceding week.
There were certainly discussions about why the matter was not ready for hearing. Counsel for the wife indicated that he would oppose an adjournment unless there was an undertaking that the husband pay his “three sets of costs”. Coker FM said:
FEDERAL MAGISTRATE: Mr Ferguson, no doubt you heard what Mr Bradshaw has had to say and I must say I am aware of the very generous stance that he had taken in respect of arrangements in this matter of not seeking to proceed and your client has not at all been – she may have had reasons but she has not at all been a diligent in the steps that were kindly consented to and conceded by him in enabling this matter to proceed.
The Federal Magistrate also said:
…Mr Bradshaw [sic] repeatedly been ready to proceed in relation to these matters and has, I think, shown admirable patience and a hope for resolution.
The solicitor for the husband argued that there had been some breakdown in communication between A and counsel for the wife.
It may be arguable that these observations by Coker FM amount to findings upon which Coates FM could have relied, but this was not raised before me. However, my inclination is not to regard the remarks as findings relevant to costs. Coker FM did not weigh the arguments for and against and express a conclusion. While he remarked on A’s lack of diligence, this was a matter in which the husband was incapacitated and no litigation guardian appointed at the time and that seems a likely factor for consideration, had Coker FM been assessing responsibility for costs thrown away.
It is well recognised that an appeal court should be reluctant to interfere with an exercise of discretion with regard to costs. Again, the appeal ground does not challenge the sufficiency of reasons of the Federal Magistrate.
I am not satisfied that appealable error is made out.

Ground 6. The Magistrate erred in not allowing interest on the judgement amount from the time the husband commenced proceedings to at least the date of the first adjournment caused by the husband’s default.

This argument follows on from that claiming that reserved costs ought to have been afforded to the wife and depends upon findings of culpability for the adjournments against the husband. However, as noted, no findings in that regard were made and accordingly, there is no merit in this argument.

Ground 4. The Magistrate erred in awarding costs of this action to the husband.

As to the costs of the trial before him, Coates FM said:
104.The issue which is presented to me is that this matter now came to trial today on the basis that negotiations failed on the basis that all efforts made by the husband's legal team to solve and get consent orders in this matter were negated by, and I will quote:
The extraordinary behaviour of the wife and her legal team.
105.I am told it was never a case of 50 per cent and never a case that she was going to receive 30 to 35 per cent. I am told the latest offers were just before trial, that the husband made an offer of $100,000 including costs and the wife was making a counter offer of $140,000 plus $12,000 in costs. I am told [by counsel for the wife] that the last offer by the wife was an offer never anticipated to be accepted. Now, the issue of costs and issue of offers are a very important issue in legal proceedings because offers are designed and should be calculated to help resolve the issues.
106.It is on many occasions and in many cases far better that the parties can come to consent orders rather than have a Court go through the evidence and make findings. In any case, the offers on both sides were rejected. On my calculations the award of the division of property, which I have made is very close to the offer made by the husband's legal team of $100,000 including costs.

The application about further evidence – which consists of letters containing various offers of settlement - is actually couched in terms of an application for an extension of time within which to seek that further evidence be received.
I do not intend to receive the further evidence and thus the question of extending time becomes moot. I do not consider that the detail of offers before the latest is even likely to show that the learned Magistrate’s costs order was wrong. The application is made extremely late. The material was obviously available prior to the trial.
Again, counsel for the wife submits that the approach of the wife since the involvement of particular counsel was reasonable and responsible at all times. He also argues that the learned Magistrate ought have taken into account the disparity of financial circumstances and that, provided the calculations are done on particular bases, the conclusion of the Federal Magistrate that the husband’s offer was closer to the award than the wife’s offer was incorrect.
I see no justification for adopting the methodology contended for by counsel for the wife. Although the learned Magistrate does not mention any disparity in financial circumstances, that does not mean that he did not, having just given judgment in relation to the alteration of property interests between the parties, have it in mind. He did not say that the offers made were the only matters relevant to costs, but merely described them as “very important”. This view was well open to him.
In these circumstances I do not consider that it has been shown that the learned Magistrate made any appealable error. As was said by members of the High Court (Gleeson CJ, McHugh and Gummow JJ) in Whisprun Pty Ltd (formerly Northwest Exports Pty Ltd) v Dixon (2003) 200 ALR 447 at 463:
[62] … A judge’s reasons are not required to mention every fact or argument relied upon by the losing party as relevant to an issue. Judgments of trial judges would soon become longer than they already are if a judge’s failure to mention such facts and arguments would be evidence that he or she had not properly considered the losing party’s case.

The wife’s application for the costs of the further directions hearing of 2 May 2008

The submissions for the wife essentially say that the further hearing was necessitated wholly by failures on the part of the husband. However, at that hearing there was contention about whether documents had been received by the husband’s solicitors. That issue was not resolved.
Moreover, the husband contended that the failure of the wife to formulate a list of documents or to engage the Appeals Registrar to settle any disputes as to the list, prevented the husband from putting in submissions and was a significant cause, if not the cause, of the delay leading to a need for further directions. Correspondence in late 2007 certainly indicates disagreement about the content of the documents to be before the court on the hearing of the appeal and, although in March 2008 the solicitors for the husband indicated that difficulty retaining counsel was causing problems in relation to meeting directions for preparation of the husband’s response to the appeal, there is no material indicating that the issue of the list of documents to be before the court on the hearing of the appeal was resolved before 2 May 2008.
In the circumstances, I intend to order that the application filed 12 May 2008 be dismissed.

Costs of the appeal

Some submissions have been made relating to the costs of the appeal, but I consider that, in view of the outcome of the appeal, I ought give the parties an opportunity to make further submissions after that, and the reasons for it, are published.

I certify that the preceding forty-seven (47) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court.

Associate:

Date: 24 December 2008