Brett-Hall & Brett-Hall

[2006] FamCA 712

[2006] FamCA 712  

JFIABHHR

FAMILY LAW ACT 1975

IN THE FAMILY COURT OF AUSTRALIA

AT BRISBANE

Appeal No. NA 22 of 2005
           NA 27L of 2005
File No. TVF 6 of 2003

IN THE MATTER OF:

IABH

Appellant/Wife

- and -

HRBH

Respondent/Husband

SUPPLEMENTARY REASONS FOR JUDGMENT

BEFORE:  Finn, Coleman & May JJ
DATE OF HEARING:        By way of written submissions
DATE OF JUDGMENT:     4^th day of August 2006

SUBMISSIONS RECEIVED FROM:      

Mr Bartfield of Queen’s Counsel, (instructed by William Graham Carman, Solicitors, PO Box 947, Cairns QLD 4870) on behalf of the appellant wife.

Mr Kirk of Senior Counsel, (instructed by Miller Harris Lawyers, PO Box 7655, Cairns QLD 4870) on behalf of the respondent husband.

Name of Appeal  IABH & HRBH
Appeal Number  NA 22/2005 & NA 27L/2005
Date of Appeal hearing                   By way of written submissions
Date of Judgment  4^th day of August 2006
Coram  Finn, Coleman, May JJ

Catchwords:   FAMILY LAW – APPEAL – RE-EXERCISE OF DISCRETION / NEW TRIAL – Whether the Full Court, having allowed the appeal, should re-exercise the trial Judge’s discretion or remit the matter for re-hearing, and if so, on what basis. Matter remitted for re-hearing on basis limited by reference to issues determined by trial Judge and not successfully challenged on appeal, the date upon which evidence at the original trial concluded, and the terms of s 75(2).

FAMILY LAW – APPEAL – COSTS – Whether there should be an order for costs of the appeal. Costs certificates issued.

Norbis v Norbis (1986) 161 CLR 513

CDJ v VAJ (1998) 197 CLR 172

Allesch v Maunz (2000) 203 CLR 172

Ruscoe v Walker (2002) FLC 93-093

R v W (unreported, Steele J, 2 July 2002)

Matter remitted for partial re-hearing
Costs certificates ordered

1. On 18 May 2006 the Court delivered reasons for judgment in relation to the substantive appeal in this matter and invited submissions from the parties as to the consequence of allowing the wife’s appeal.  The Court has received submissions on behalf of each party pursuant to those orders.  Such submissions, as were also invited, address the question of costs of the appeal.

THE CONSEQUENCES OF UPHOLDING THE WIFE’S APPEAL

1. The wife’s Senior Counsel sought that the property settlement proceedings be remitted for re-hearing by a single judge, other than the original trial Judge, in relation to a limited number of specific issues.  The husband’s Senior Counsel sought that this Court should re-exercise the trial Judge’s discretion in relation to “the property issues”.  Neither party sought to cavil with the view we expressed in our Judgment of 18 May 2006 that the child support proceedings would be remitted for re-hearing.

2. The husband’s alternative stance was that, if this Court was not prepared to re-exercise the trial Judge’s discretion, the proceedings be remitted for re-hearing “on a limited basis”.  Unsurprisingly, each party sought that the proceedings be remitted on substantially different bases.

3. Two issues thus potentially require determination.  The first is whether this Court should re-exercise the trial Judge’s discretion or remit the proceedings to a single Judge.  If the latter course be adopted, the question arises as to the basis on which the proceedings should be remitted.

SHOULD THIS COURT RE-EXERCISE THE TRIAL JUDGE’S DISCRETION OR REMIT THE MATTER FOR RE-HEARING BEFORE A SINGLE JUDGE?

1. As it was the husband, the respondent in the appeal, who sought that this Court re-exercise the trial Judge’s discretion, it is appropriate to refer first to the submissions on the husband’s behalf in that regard.

2. Beyond confirming that the husband’s application was that this Court “re-exercise the Trial Judge’s discretion”, nothing was submitted on the husband’s behalf in support of such claim.  Similar observations apply to the submissions on behalf of the wife.  Having regard to our reasons for judgment in relation to this issue (paragraph 98), the absence of any submissions in this regard is not surprising and, at least tacitly, can be seen as recognition of the difficulties associated with this Court re-exercising the trial Judge’s discretion, to which we alluded in our primary judgment.

3. To the extent that there can be any doubt that, in the circumstances, remitting the proceedings for re-hearing by a single judge is the preferable, and possibly only practical option, the other submissions made on behalf of the parties in relation to the future course of the property settlement proceedings leave us in no doubt that such course should be adopted.

4. It is apparent that, whatever we conclude in relation to the scope of any re-hearing, there are a range of controversial evidentiary matters which have the potential to arise in the course of the re-hearing of the proceedings.  This Court is ill equipped to deal with such issues.

THE TERMS ON WHICH THE PROCEEDINGS SHOULD BE REMITTED FOR RE-HEARING.

1. This issue assumes some complexity.  On behalf of the wife it was submitted that the issues “which should be remitted for hearing by a single Judge” were:

   a.   To identify and value the asset pool.  In that process it is expected that the potential Capital Gains Tax will be recalculated and evidence will be available in relation to the S Pty. Ltd. venture;

   b.   To establish what effect (if any) the contingent liabilities for Capital Gains tax and the guarantee of the S Pty. Ltd venture have on the value of the asset pool in the light of the judgment of the Full Court;

   c.   To make orders splitting the pool of assets as found on re-trial in the proportions 60% to the husband and 40% to the wife and further orders giving effect to that conclusion.

   d.   To re-hear the application for departure from the assessment of child support and make such order as the trial Judge deems appropriate.

10.  On behalf of the husband it was submitted that the trial Judge’s discretion should be re-exercised in relation only to “the matters which were the ‘subject of successful complaint in the appeal’”, they being:

(a)    Ground 1 - $210,313 guarantee liability ought not have been deducted from the pool but should have been adjusted under S.75(2);

(b)   Ground 2 - $1,607,594 for CGT and $282,750 for costs of sale should not have been deducted from the pool but should/could have been adjusted under S.75(2) or S.79(2).

11.  It was conceded on behalf of the wife that having failed on appeal to impugn the trial Judge’s “assessment of contributions and section 75(2) factors”, the wife could not have a “second bite at the cherry” and “re-agitate that question on a re-hearing” (Wife’s Submissions, paragraph 3).

12.  It was further submitted that the husband, “who did not cross-appeal and who, in the appeal, sought to uphold the judgment at first instance, should not be able to argue that a different percentage split should apply to the assets in the case”.

13.  On behalf of the husband it was submitted that the matters referred to above “alone should be remitted for determination rather than requiring the parties to effectively ‘start from scratch’”.

14.  On behalf of the wife it was submitted, in reliance upon what was asserted on her behalf to be the “issues” to be remitted to a single judge, that the trial Judge would need to “identify and value the pool” of property of the parties.  A number of reasons why that was so were advanced (Wife’s Submissions, paragraph 5).

15.  Senior Counsel for the husband relied upon the decision of the Full Court in Ruscoe v Walker (2002) FLC 93-093 and in particular, the judgment of the majority (Lindenmayer & Joske JJ) at paragraph 17 wherein their Honours said:

Issues of identification and valuation of the property and liabilities of the parties to proceedings under s 79 of the Act are always, of necessity, resolved on a “snap-shot” basis as at the date of the trial (or as at the nearest practicable date thereto).  Why should these parties be able or obliged to take another “snap-shot” of their assets and liabilities for the purpose of the proceedings after they have moved on from that date, each receiving and dealing with, as he or she has seen fit, the property allocated to him or her by the trial Judge’s orders? In our view, they should not be able or obliged to do so …

16.  A significant part of the submissions on behalf of the husband appeared under the heading “APPLICATION FOR FURTHER EVIDENCE”, a topic to which we will later refer.

17.  It appears to be submitted on behalf of the husband (paragraph 5.1(a)) that no further valuation evidence should be allowed on the re-hearing of the proceedings.  It was submitted on behalf of the husband, it would seem by necessary inference, that if the Court did not limit the scope of the re-hearing in the manner asserted on behalf of the husband, the “60/40 division applied by the Trial Judge” in 2004 ought not be applied, for reasons advanced by Senior Counsel (Husband’s Submissions, paragraph 5.1(c)).

18.  This Court undoubtedly has the power to limit the scope of the proceedings which are remitted for determination by a single judge.  In Ruscoe v Walker the majority said at 88,826-7:

… if the Court proposes to re-exercise the discretion it must admit any evidence which either party seeks to adduce of any events which have occurred or circumstances which have arisen since the trial which are relevant to that re-exercise of discretion.  Undoubtedly, the Court has a residual discretion whether or not to admit any such evidence proffered by a party, but it seems to us that if the proffered evidence is evidence which is clearly relevant to the exercise of the ultimate discretion, and is of events which have occurred or circumstances which have arisen since the trial, it would prima facie be an erroneous exercise of discretion for the Court to refuse to admit it.

19.  The High Court refused special leave to appeal that decision on 3 May 2002.

20.  It is inherent in the decision of the majority in Ruscoe v Walker that this Court enjoys a wide discretion in relation to the present issue.  It must not be overlooked however that the overarching obligation created by s 79(2) continues to require of the single Judge who re-hears the proceedings that his or her decision be “just and equitable”.  Moreover, the trial Judge’s decision on the re-hearing remains discretionary and entailing the exercise of a broad discretion (see Brennan J in Norbis v Norbis (1986) 161 CLR 513).

21.  Whilst the decision of the majority in Ruscoe v Walker is well known, the fate of the proceedings on remission to a single judge is less so (R v W (unreported, Steele J, 2 July 2002)).  The single Judge to whom the proceedings were remitted vacated the re-hearing of the proceedings and directed one of the parties “to file an Application to the Full Court” in compliance with the order 4 of the orders of the Full Court of 10 May 2001, which order provided: 

That either party have liberty to apply to the Full Court (as presently constituted), prior to the commencement of the rehearing, for any further directions as to the issues to be addressed at the rehearing, by filing and serving upon the other party a written notice identifying the further directions sought, together with written submissions in support thereof, and such other party have liberty to file, and serve upon the first-mentioned party, a response to the application (together with supporting written submissions) within fourteen days of the receipt of the first-mentioned party's application and supporting submissions.

It is thus apparent that, notwithstanding the clear terms upon which the Court remitted the matter to a single Judge, the course of the re-hearing was less than straight forward, and the Full Court’s objectives not readily able to be achieved.

22.  In the circumstances of this case, to allow contribution issues to be revisited, at least to the date of completion of the hearing of the proceedings before the trial Judge, would in our view be unthinkable, largely for the reasons advanced by Senior Counsel for the wife to which we have earlier referred.

23.   Contribution matters subsequent to the completion of the hearing before the trial Judge fall into a different category, particularly as the orders to be made by a single judge upon the proceedings being remitted by this Court must satisfy the just and equitable requirement on the day that such judge delivers judgment re-exercising the trial Judge’s discretion.

24.  To exclude from that judge’s consideration evidence of contributions subsequent to the completion of evidence before the trial Judge would not in our view be conducive to a just and equitable outcome being achieved.  This is particularly so given the nature of the parties’ assets, the time which has passed since the trial concluded, and the terms of the trial Judge’s orders.  As a practical matter, it would not be difficult for the single judge re-exercising the trial Judge’s decision to quarantine contribution evidence so as to allow evidence subsequent to the completion of the trial but exclude evidence which was no more than an attempt at a “second bite”, as learned Senior Counsel for the wife expressed it.

25.  We struggle with the assertion on behalf of the wife that the s 75(2) adjustment determined by the trial Judge should bind the judge who re-exercises the trial Judge’s discretion.  There are a number of reasons why that is so. Changed circumstances of the parties are one.  What the wife has received pursuant to the trial Judge’s orders, what she has done with it, and how the husband financed her receipt of those funds, are all matters which could impact upon s 75(2).  The value of the asset pool is yet another reason why endeavouring to retain the trial Judge’s s 75(2) adjustment, though not erroneous on the facts and circumstances as found by him, could be conducive to an injustice.  This is particularly so given that, as our reasons for allowing the appeal make clear, the re-hearing is likely to involve re-visiting issues of Capital Gains Tax and selling expenses of property, and whether any sales of property are proposed or likely.  We re-iterate that the single judge’s re-exercise of the trial Judge’s discretion must be just and equitable at the time it is made. We struggle to see how fettering the judge’s discretion in relation to s 75(2) would be other than conducive to an injustice to one or both of the parties.

26.  For the reasons we have indicated, we propose only fettering the discretion of the single judge charged with re-exercising the trial Judge’s discretion to the extent of accepting that, as at 15 November 2004 (the date of the last evidence before the trial Judge), the contribution entitlements of the parties were 70/30 in favour of the husband.  Whilst it might be thought that similar conclusions would apply to the s 75(2) adjustment then determined, the absence of possible practical benefit in so doing disinclines us to impose any restrictions with respect to s 75(2).  The differing characters of contributions, which largely focus on the past, and s 75(2) factors, which focus more on the present and the future, support that conclusion.

27.  Having thus concluded, it is strictly unnecessary to refer further to a number of submissions made on behalf of the parties.  In our view each party would be entitled to adduce evidence of the current value of the assets of the parties, whether or not those were the subject of agreement before the trial Judge, and any disputes in that regard resolved in the usual manner.

28.  We referred earlier to the submissions on behalf of the husband under the heading “APPLICATION FOR FURTHER EVIDENCE”.  If we have understood the submissions correctly, we are constrained to suggest that, with the greatest respect to Senior Counsel for the husband, the submissions proceed on a false premise.  The Court having indicated its intention to allow the wife’s appeal, for the reasons provided in the primary judgment of 18 May 2006, the wife does not need the leave of the Court to adduce further evidence in the appeal as our primary judgment confirms.  In deference to Senior Counsel for the husband, and in case we have misunderstood the argument, we shall nevertheless examine the matter. 

29. Section 93A is the relevant section in that regard and was considered by the High Court in CDJ v VAJ (1998) 197 CLR 172. As the judgment of the majority makes clear, the basis upon which the Full Court may receive further evidence pursuant to the section is to establish error on the part of the trial Judge. The majority there said at 201-202:

One consideration in construing s 93A(2) is its remedial nature. Its principal purpose is to give to the Full Court a discretionary power to admit further evidence where that evidence, if accepted, would demonstrate that the order under appeal is erroneous. The power exists to facilitate the avoidance of errors which cannot be otherwise remedied by the application of the conventional appellate procedures. A further, but in practice subsidiary, purpose is to give the Full Court a discretion to admit further evidence to buttress the findings already made.

…

Ordinarily, where it is alleged that the admission of new evidence requires a new trial, justice will not be served unless the Full Court is satisfied that the further evidence would have produced a different result if it had been available at the trial. Without that condition being satisfied, it could seldom, if ever, be in the interests of justice to deprive the respondent of the benefit of the orders made by the trial judge and put that person to the expense, inconvenience and worry of a new trial.

30.  In this case, having made out grounds to enliven appellate intervention, the wife does not need to adduce further evidence.  Such further evidence as the wife may wish to adduce can only be further evidence on the re-hearing of the proceedings. In Allesch v Maunz (2000) 203 CLR 172 the High Court said at 183:

Although, on an appeal by way of rehearing from a discretionary judgment, an appellate court may, itself, exercise the discretion in question by reference to circumstances as they then exist, it is not bound to do so.  It may, instead, set aside the order under appeal and remit the matter for rehearing or, in terms of s 94(2) of the Act “order a re-hearing, on such terms and conditions, if any, as it considers appropriate”.  And where circumstances have or are likely to have changed between the original hearing and the disposition of the appeal, it is not uncommon for an appellate court to remit the matter for rehearing rather than, itself, exercise the discretion in question.

If on an appeal by way of rehearing from a discretionary judgment an appellate court is minded to exercise the discretion in question by reference to circumstances as they exist at the time of the appeal, it is necessary that the parties be given an opportunity to adduce evidence as to those circumstances.  It is not entirely clear that that happened in the present case, particularly as the Full Court indicated that it could only speculate as to the likely outcome of a fresh application of the principles governing property settlement to the property then owned by the parties.

31.  We see no reason to limit the Judge re-exercising the discretion of the trial Judge in ways in which this Court would not be constrained were it to re-exercise the trial Judge’s discretion.

32.  Whatever the fate of the wife’s application to adduce further evidence, had it been necessary for such application to be considered, both parties are, subject to any restraints imposed by this Court on the scope of the re-hearing, entitled to adduce such further relevant and admissible evidence as each is advised.  For the reasons we have earlier given, we propose limiting the scope of the re-hearing to matters which have arisen since the completion of the evidence before the trial Judge, both for the purposes of ss 79(4) and 75(2).  Within that context, each party will no doubt wish to adduce further evidence.  Having thus concluded, it is unnecessary to refer further to the submissions of Senior Counsel for the husband under the heading “APPLICATION FOR FURTHER EVIDENCE”.

33.  In the hope that so doing removes any scope for doubt as to the intended effect of the orders we shall make, we shall indicate in broad terms the issues we perceive to potentially require determination at the re-hearing, and those which should not be revisited at such re-hearing.

34.  The factual background as found by the trial Judge (paragraphs 14 to 32 of his judgment, including his findings about the controversial issue of the cohabitation commencement date) should stand and not be revisited.

35.  The list of the assets and liabilities and their values would have to be re-assessed as at the date of the new trial (unless there the parties agreed to use any value found by, or agreed before, the trial Judge), and for such re-assessment further evidence may need to be adduced.

36.  The trial Judge's 70:30 assessment of the contributions to property and family to 15 November 2004 (paragraphs 82 to 109 of his judgment) should stand and not be revisited.

37.  The parties would be able to adduce further evidence of contributions to property and family made since 15 November 2004 and also of relevant s 75(2) matters.

COSTS

38.  Senior Counsel for the wife sought that the husband pay the wife’s costs of the appeal, preferably on “an indemnity basis” but, in the alternative, on a party/party basis, and that the wife’s costs of the re-hearing “occasioned by the successful appeal be reserved to the Judge re-hearing the matter” (Wife’s Submissions, paragraph 13).  In the alternative costs certificates were sought with respect to the appeal and the re-hearing.

39.  On behalf of the husband it was sought that there be no order for costs and that costs certificates issue with respect to the appeal and the re-hearing.

40.  In support of the application for costs orders against the wife, her Senior Counsel raised a number of matters, including the financial circumstances of each party, asserting that the husband was “in a superior financial position to the wife”.  Whilst the factual matters relied upon by Senior Counsel for the wife  are undoubtedly correct, we do not see the differing financial position of the parties in this case as advancing the wife’s claim for costs. 

41.  It was submitted on behalf of the wife that “[t]he husband’s case was conducted in such a way as to lead the learned trial Judge into error” (Wife’s Submissions, page 6).  A number of submissions were made in that regard with respect to the conduct of the husband’s case at trial.  Ultimately it was asserted that the submissions made on behalf of the husband:

… were made against the evidence which fell from the husband and were made in the face of clear and binding authority.  It was counsel’s misapplication of the facts to the law which led the learned trial Judge into error.

42.  Nothing to which we have been referred in relation to costs, or which emerged during the course of the hearing of the substantive appeal and evaluation of the contentions of Counsel for the parties during such appeal, satisfies us that Counsel for the husband in any way caused or contributed to the errors which this Court found the trial Judge had made.  Nothing to emerge from the transcript of the proceedings or any other material to which we have been directed suggests that Counsel for the husband did other than vigorously and competently present the husband’s case at trial.

43.  We are not of the opinion that circumstances justify an order for costs being made against the husband in relation to the appeal.  It is thus unnecessary to consider whether indemnity or party/party costs would be appropriate.

44.  The submission on behalf of the wife that the judge re-exercising the trial Judge’s discretion retain the discretion to determine costs, records what we would understand the law to provide in that regard.  It is inappropriate for this Court to make any order in relation to any aspect of the costs of the re-hearing, those matters necessarily being determined by a single judge re-exercising the trial Judge’s discretion in the light of s 117 at the completion of the re-hearing.

45.  The circumstances of the case do in our view entitle each party to a costs certificate with respect to the appeal.  We are not persuaded however that either party should be entitled to a costs certificate with respect to the re-trial.  The ability of the either party to seek or resist costs from the other party upon the re-exercise of the trial Judge’s discretion is reason for so concluding.

ORDERS

46.  Accordingly, the orders of the Court are:

1.   That the appeal be allowed.

2.   That the orders of the trial Judge be set aside.

3.   That the proceedings be remitted for re-hearing before a single judge other than the original trial Judge, provided that:

a.the proceedings for settlement of property be limited to:

i.further evidence with respect to valuations of assets and quantification of liabilities as at the date of the new trial;

ii.further evidence with respect to contributions made subsequent to 15 November 2004; and

iii.further evidence with respect to s 75(2).

b.the contribution based entitlements of the parties to the assets of the marriage as found by the original trial Judge as at 15 November 2004 be accepted as 70 per cent to the husband and 30 per cent to the wife.

4.   That there be no order for costs of the appeal as between the parties.

5. That the Court grants to the appellant wife a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 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 wife in respect of the costs incurred by the appellant wife in relation to the appeal.

6. That the Court grants to the respondent husband a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act 1981 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 husband in respect of the costs incurred by the respondent husband in relation to the appeal.

I certify that the preceding
46 paragraphs
are a true copy of the reasons
for judgment delivered by this
Honourable Court.
A.C.
Associate
Date: 04/08/2006