Brott and Joachim

[2001] FamCA 244

[2001] FamCA 244

FAMILY LAW ACT 1975

IN THE FULL COURT       
OF THE FAMILY COURT OF AUSTRALIA                 Appeal No SA62L of 2000
AT MELBOURNE  File No ML8858 of 1992

BETWEEN:

ISSAC BROTT
Applicant
- and -

FAY REBECCA JOACHIM
Respondent

REASONS FOR JUDGMENT OF THE FULL COURT

CORAM:  Kay, Coleman & Strickland JJ
DATE OF HEARING:                 By way of written submissions
DATE OF JUDGMENT:             24 April 2001

SUBMISSIONS RECEIVED FROM:

Issac Brott & Co., Solicitors, Level 2, 493-495 Little Bourke Street, Melbourne, on behalf of the Applicant.

The Respondent in person.

BROTT and JOACHIM
SA 62L of 2000
Coram: Kay, Coleman and Strickland JJ
Date of Hearing: by way of written submissions
Date of Judgment: 24 April 2001

APPEALS -LEAVE TO APPEAL- "prescribed decree" - repeal of definition in s 94AA(4) Family Law Act - whether leave required where application considered before Family Law Regulations amended to re-define "prescribed decree"

PRACTICE and PROCEDURE - interlocutory appeal - challenge to interim finding - whether appropriate to await final order before considering finding

The wife has been a litigant in a long-running dispute with her former husband. At some point she engaged Mr Brott to act as her solicitor.  She subsequently dispensed with his services.  A dispute arose between the parties over a bill of costs that Mr Brott rendered to the wife.  He relied upon a costs agreement, said to have been signed by himself and the wife.  The wife sought to challenge the validity of the costs agreement, including asserting that it had not been signed by Mr Brott.

Carter J, the trial Judge, expressed the view that if the solicitor desired to rely upon a costs agreement he needed to satisfy her Honour that the agreement had been signed at the time that the fees which he now sought to recover were charged.  Her Honour indicated that she was not so satisfied. 

There remained in the Court a discretion to set the costs agreement aside if the requirements of Order 38 rule 27, sub-rules 2, 3, and 4 had not been complied with. The wife's application to set the costs agreement aside was adjourned, and the trial Judge ordered that affidavits and submissions be submitted dealing with the question of the exercise of the discretion of Order 38 Rule 27(5). 

Before the Full Court was an application by the solicitor seeking leave to appeal the orders of Carter J, on the basis that her Honour's interim findings were erroneous and that if they were corrected there would be no need to embark upon a consideration of the discretionary question as to whether the costs agreement should be enforced, notwithstanding the asserted lack of a signature.

At the time when Carter J made the orders the subject matter of these applications, s 94AA (leave to appeal required for a "prescribed decree") was in force. However on 27 December 2000 s77 of the Family Law Amendment Act 2000 repealed ss 94AA(4), removing the definition of "prescribed decree”, and the Family Law Regulations which picked up the definition were not amended until 1 March 2001.

When the Full Court came to consider the submissions in January 2001, it became apparent that a difficulty may have arisen as a result of the repeal of s 94AA(4). Directions were made for supplementary submissions addressing whether leave to appeal the decision made in September 2000 was still required in light of the subsequent repeal of s 94AA(4), and whether the foreshadowed Regulation prescribing a decree for the purposes of s 94AA and due to come into effect on 22 February would revive any such requirement.

Held: in dismissing the application for leave to appeal

(per Kay, Coleman and Strickland JJ)

• The orders made by Carter J constituted, within the meaning of s 94AA as it stood at September 2000, an interlocutory decree in proceedings which were not in relation to a child welfare matter. As such, at the time the order was made the solicitor did not have a right to appeal against the order without leave. The subsequent repeal of s94AA(4) did not express any intention to affect the previous operation of s94AA.

• In light of the whole of the surrounding circumstances regarding the legislation, there was nothing to lead to any other reasonable conclusion that it was always the intention of the legislative authority that there would be limits placed on the right to appeal from interlocutory decrees of this nature.

• Importantly, in determining what the legislature intended, only section 94AA(4) was repealed and not the requirement of leave to appeal itself. All that was done approximately two months later was to in effect reinstate the previous position, albeit in the form of a regulation.

• The matters complained of by the applicant did not at this stage merit a grant of leave to appeal.  Any error of the trial Judge in respect of her conclusion as to the existence of otherwise of a signed costs agreement, and as to whether or not such an agreement should be set aside, is capable of being dealt with on an appeal from any substantive order made by the trial Judge at the conclusion of the proceedings.

APPLICATION FOR LEAVE TO APPEAL DISMISSED
REPORTABLE

1. Before the Court is:

An application for leave to appeal filed 5 October 2000 by Issac Brott, a solicitor, in which he seeks to appeal the whole of the decree or orders made by the Honourable Justice Carter on 8 September 2000;  and

In the alternative, an application that the application for leave to appeal be treated as an application to extend the time for appeal "so that a notice of appeal can be filed in the form annexed to the application for leave previously filed".

1. The second application came in direct response to a direction given by the Full Court.

1. As at 8 September 2000, when Carter J made the orders the subject matter of these applications, and until 27 December 2000 when the provisions of the Family Law Amendment Act No. 143 of 2000 took effect, s 94AA of the Family Law Act provided as follows:

"94AA  Leave to appeal needed in some cases

(1)      An appeal does not lie to a Full Court of the Family Court from a prescribed decree of a court other than the Federal Magistrates Court, except by leave of a Full Court of that Court.

(2)      An application for leave under subsection (1) is to be determined by a Full Court of the Family Court.

(2A)     An appeal does not lie to the Family Court from a prescribed decision of the Federal Magistrates Court, except by leave of the Family Court.

(2B)     An application for leave under subsection (2A) is to be determined by a single Judge or by a Full Court.

(2C)    The single Judge referred to in subsection (2B) need not be a member of the Appeal Division.

(3)      The standard Rules of Court may make provision for enabling applications for leave to be dealt with, subject to conditions prescribed by the Rules, without an oral hearing.

(4)      In this section:

child welfare matter means a matter relating to the person or persons with whom a child is to live, contact between a child and another person or persons or any other aspect of parental responsibility (within the meaning of Part VII) for a child.

prescribed decree means a decree of the kind mentioned in subsection 94(1) that is an interlocutory decree, but does not include a decree in relation to a child welfare matter."

1. Section 77 of the Family Law Amendment Act 2000 repealed ss 94AA(4).

1. The Family Law Regulations were amended commencing from 1 March 2001 to provide:

"15A   Leave to appeal — prescribed decrees (Act s 94AA)

(1)      For subsection 94AA (1) of the Act, a decree of the kind mentioned in subsection 94 (1) of the Act that is an interlocutory decree (other than a decree in relation to a child welfare matter) is prescribed.

(2)      For subsection 94AA (2A) of the Act, a decree of the kind mentioned in subsection 94AAA (1) of the Act that is an interlocutory decree (other than a decree in relation to a child welfare matter) is prescribed.

(3)      In this regulation:

child welfare matter means a matter relating to:

(a)      the person or persons with whom a child is to live; or

(b)contact between a child and another person or persons; or

(c)any other aspect of parental responsibility, within the meaning of Part VII of the Act, for a child."

1. On 27 October 2000 Kay J directed that the application for leave to appeal be dealt with by a Full Court without oral hearing and set out a timetable for the filing of submissions.  Submissions were forthcoming from the applicant by late November or early December and a response came from the respondent on or after 19 December 2000. 

1. In early February 2001, when we came to consider the submissions it became apparent that a difficulty may have arisen as a result of the repeal of s 94AA(4). We then made directions for supplementary submissions addressing the following questions:

(a) whether leave to appeal the decision made in September 2000 was still required in light of the subsequent repeal of s 94AA(4);

(b) if No to (a), then whether the foreshadowed Regulation prescribing a decree for the purposes of s 94AA and due to come into effect on 22 February would revive any such requirement;

(c) If No to both (a) or (b), then whether the Full Court should treat the application for leave to appeal as an application for leave to extend the time for appeal given that the reason for such extension is self-explanatory, namely the repeal of s 94AA(4) and the lacuna created by the failure to immediately replace it with an appropriate Regulation.

1. Directions were made for the filing of supplementary submissions by the applicant on February 28 and the respondent by March 14.  We are in receipt of those supplementary submissions.  There is a helpful supplementary submission from the appellant.  The respondent's submission appears to indicate that she does not have, understandably, an appreciation of the legal difficulties created by the legislative amendment.  Her submission seeks to deal with the merits of the dispute between herself and Mr Brott rather than the discrete point raised in the request for supplementary submissions.

Background

1. Mrs Joachim has been a litigant in a long-running dispute with her former husband.  At some point in time she engaged Mr Brott to act as her solicitor.  She subsequently appears to have dispensed with his services. 

1. A dispute has arisen between Mr Brott and Mrs Joachim over a bill of costs that he rendered.  Mr Brott appeared to rely upon a costs agreement, said to have been signed by himself and Mrs Joachim.  Mrs Joachim sought to challenge the validity of the costs agreement, including asserting that it had not been signed by Mr Brott.

The relevant Rules of Court

1. Order 38 rule 27 of the Family Law Rules provides

"ORDER 38 RULE 27

Agreements as to costs

(1)      A solicitor may enter into an agreement with a client of the solicitor relating to the costs to be charged by the solicitor for work done for proceedings.

(2)      A costs agreement must be fair and reasonable.

(3)      A costs agreement must:

(a)be in writing; and

(b)be signed by both the solicitor and the client.

(4)      At the time of, or within a reasonable time after, entering into a costs agreement, a solicitor must:

(a)provide each other party to the costs agreement with a copy of a pamphlet, prepared by the Principal Registrar, that summarises the main effects of this Order; and

(b)advise each other party to the costs agreement of the availability of independent legal advice concerning the costs agreement.

(5)      The court, or a Judicial Registrar, may set aside a costs agreement if subrule (2), (3) or (4) is not complied with."

1. Order 38 rule 5 provides:

"ORDER 38 RULE 5

Proper costs

(1)      Subject to rule 6, and unless the court otherwise orders, a solicitor may charge for work done for proceedings:

(a)fees that are not more than the amount calculated for the work in accordance with the scale of fees in Part 1 of Schedule 2; and

(b)disbursements (including counsel's fees) properly incurred for the proceedings.

(2)      Unless the court otherwise orders, a solicitor who does work for proceedings that are heard by a court of summary jurisdiction must not charge for the work a fee that is more than 80% of the amount that may be charged for the work in accordance with the scale of fees in Part 1 of Schedule 2.

(3)      This rule does not apply to the charge that a solicitor may make for work done for proceedings if:

(a)the solicitor has entered into a costs agreement with the client; and

(b)the costs agreement has not been set aside."

The judgment of the trial Judge

1. Carter J expressed the view that if Mr Brott desired to rely upon a costs agreement he needed to satisfy her that the agreement had been signed at the time that the fees which he now sought to recover were charged.  She indicated that she was not so satisfied. 

1. As can be seen by Rule 27 sub-rule 5, there remained in the Court a discretion to set the costs agreement aside if the requirements of Order 38 rule 27 sub-rules 2, 3, and 4 had not been complied with.  The wife's application to set the costs agreement aside was further adjourned with her Honour making the following orders and directions. 

"(1)That Mr Brott file and serve any affidavit upon which he seeks to rely in relation to the matters set out hereafter, on or before 4 October 2000.

(2)That the wife file and serve any affidavit upon which she seeks to rely in respect of the matters set out hereafter, on or before 18 October 2000.

(3)That the parties file and exchange written submissions as to the matters set out hereafter, the solicitors' written submissions to be filed and served on or before 25 October 2000, and those on behalf of the wife to be filed and served on or before 1 November 2000.

(4)The aforesaid affidavits and submissions shall be directed to the question of the exercise of the discretion under O 38 r 27(5).

(5)I reserve all questions of costs.

(6)I further order that there be general liberty to apply.

(7)The exhibits should be retained until such time as the matter has been finally determined."

1. It is against those orders and directions that this application for leave to appeal is directed.

The proposed Notice of Appeal

1. Accompanying the affidavits in support and submissions filed in relation to this leave application are two draft Notices of Appeal which are slightly at variance with each other.  The first one, which is an annexure to the affidavit of the applicant filed 5 October 2000, commences by stating "the appellant appeals from the whole of the extempore judgment delivered by Justice Carter".  The second one, which accompanies the supplementary submissions dated 17 November 2000, commences as follows:

"The appellant appeals from Orders 1 and 2 [of] the orders of Justice Carter made on 9 September, 2000 and the ex tempore judgment delivered by Justice Carter insofar as those Orders and the judgment were based upon a finding that the Costs Agreement entered into between the appellant and the respondent did not comply with the provisions of Order 38 rule 27, as the Costs Agreement was not signed by the appellant as solicitor (and the respondent as client), prior to the appellant charging the respondent for the work to which the agreement related."

1. The four grounds of appeal relied upon in each of the two Notices of Appeal are identical, as are the orders sought in each of the Notices of Appeal which are as follows:

"(1)The Costs Agreement between the appellant and the respondent comprised the letter from the appellant to the respondent dated 21 October, 1998 and the addendum thereto.

(2)The Costs Agreement was signed by the appellant and complied with the requirements of Order 38 rule 27(3).

(3)The respondent pay the appellant's costs."

1. In our view these are not orders that can or should be sought.  They are in the nature of findings that may or may not lead to orders ultimately being made.

1. An appeal lies to a Full Court of the Family Court from (inter alia) "a decree of the Family Court" (Section 94 Family Law Act 1975). Section 4 of the Family Law Act defines "decree" to include "decree, judgment or order".  In reality what an Appellate Court does is determine whether the orders made by the trial judge should be set aside or varied.  In that process the findings of the trial judge are assessed and it may be that they are found to be unsafe, unjustified or inappropriate, and on that basis the orders cannot stand.

1. The draft Notice of Appeal does not seek "orders" to be made in lieu of the orders of the trial judge.  It seeks certain findings to be put in place in lieu of findings of the trial judge.

The changes to the legislation

1. It is abundantly clear that the orders made by Carter J constituted, within the meaning of s 94AA as it stood at September 2000, an interlocutory decree in proceedings which were not in relation to a child welfare matter. As such, at the time the order was made Mr Brott did not have a right to appeal against the order without leave. The subsequent repeal of s 94AA(4) did not, in our view, express any intention to affect the previous operation of s 94AA. Section 8 of the Acts Interpretation Act 1901 (Cth) says:

"Where an Act repeals in the whole or in part a former Act, then unless the contrary intention appears the repeal shall not:

…

(b)      affect the previous operation of any Act so repealed, or anything duly done or suffered under any Act so repealed; or

(c)       affect any right privilege obligation or liability acquired accrued or incurred under any Act so repealed; …"

1. It is also clear that, by operation of Regulation 15A of the Family Law Regulations, as and from 1 March 2001 no appeal may be brought as of right in respect of an interlocutory decree made in proceedings other than a decree in relation to a child welfare matter.  An issue in these proceedings is whether that Regulation can be read retrospectively so as to include any decree of the Family Court made before the date of the Regulation, namely 1 March 2001.

1. A similar problem arises in Worrell v Commercial Banking Company of Sydney Ltd (1917) 24 CLR 28. In a short judgment delivered by Barton J on behalf of the court (coram Barton, Issacs and Rich JJ) his Honour, commenting on whether the Regulation in issue had to be read retrospectively, said at 31:

"That question must be answered by ascertaining the intention of the legislative authority acting under its statutory law."

Then, after acknowledging that generally an appeal is a right possessed in a litigant and not simply an aspect of a procedure, his Honour said:

"The distinction between 'rights' and 'procedure' is only an aid to interpretation and not the test.  The test is:  What did the Legislature mean when its words are read, after giving due weight to every relevant consideration?...

To follow this method, we have the guidance of Lord Hatherley in Pardo v Bingham LR 4 Ch at p 740.  There it is said:

'We must look to the general scope and purview of the statute, and at the remedies sought to be applied, and consider what was the former state of the law, and what it was that the legislature contemplated.'

...

If, doing this, we find that though no express words are found, yet the necessary intendment of the language is retrospectivity, the task is at an end.  Necessary intendment only means that the force of the language in its surroundings carry such strength and impression in one direction, that to entertain any opposite view appears wholly unreasonable."

1. The legislation as it stood at 8 September 2000 and up to 27 December 2000 clearly indicated that no appeal was to lie from an interlocutory decree of this nature without leave.  For reasons that are not immediately apparent, the legislature thought it best to remove the provisions defining which decrees needed leave to appeal from the legislation itself to subordinate legislation, namely the Family Law Regulations.  For reasons entirely unexplained a period of slightly in excess of two calendar months expired before the necessary regulation was promulgated.  In our view, in the whole of the surrounding circumstances regarding the legislation, there is nothing to lead to any other reasonable conclusion that it was always the intention of the legislative authority that there would be limits placed on the right to appeal from interlocutory decrees of this nature.  There is nothing in the circumstance surrounding the enactment of the Family Law Amendment Act and the promulgation of the relevant regulation which would indicate that it was the legislative intent to change the position vis a vis interlocutory decrees between the time of the enactment and the time of the promulgation of the regulation.

1. We should note in passing that the explanatory memorandum which accompanied the Family Law Amendment Bill is particularly unhelpful.  It says as follows:

"261. Existing section 94AA provides that leave to appeal to the Full Court is required in certain circumstances. Existing subsection 94AA(4) provides for definitions of child welfare matter and prescribed decree for the purposes of section 94AA.

262. Item 77 will repeal subsection 94AA(4) as the definition of child welfare matter is no longer required and the definition of prescribed decree is provided for in the Federal Magistrates Bill 1999."

1. Importantly, in determining what the legislature intended, only s 94AA(4) was repealed and not the requirement of leave to appeal itself. All that was done approximately two months later was to in effect reinstate the previous position, albeit in the form of a regulation

1. Our researches have failed to locate where in the Federal Magistrates Bill the definition of "prescribed decree" was provided for nor have we been able to ascertain why it was that the memorandum indicated that "the definition of child welfare matter" was no longer required.  The Federal Magistrates Bill became the Federal Magistrates Act No 193 of 1999 on 23 December 1999.

1. In summary we conclude:

• As at the 8 September 2000 Mr Brott could only appeal the orders of Carter J by leave.

• As at this time Mr Brott can only appeal the orders of Carter J by leave

• Any lacuna that may have been created between the repeal of s 94AA(4) in December 2000, and the promulgation of Regulation 15A in March 2001 is caught by the application of the principles discussed in Worrell v Commercial Banking Company of Sydney Ltd and leave to appeal is to have been deemed to have been required by Mr Brott at all times.

The application for leave to appeal.

1. It is Mr Brott's contention that her Honour erred in finding that there was no signed costs agreement.  He contends that if that error is corrected by a Full Court there will be no need for any proceedings under Order 38 rule 27(5) to determine whether or not her Honour should exercise her discretion in relation to what her Honour found to be an agreement which had not been signed by Mr Brott at the relevant date.  He says such a proceeding will "be unnecessary and comprise wasted costs and expenses" and that he will "suffer substantial injustice if the judgment is allowed to stand as he will be required to undertake further proceedings in respect of the exercise of her Honour's discretion".

1. In submissions filed on his behalf he asserts that in order to appropriately deal with the discretion issue he will be required to draw affidavits and answering affidavits and appear in court.

1. It is appropriately conceded by counsel on behalf of the applicant that the relevant principles to be applied in respect of an application for leave to appeal can be found in the decisions of Rutherford v Rutherford (1991) FLC 92-255; 15 Fam LR 1, Adam P Brown Male Fashion Pty Ltd v Philip Morris (1981) 148 CLR 170, and Jackson v Fordham (1995) FLC 92-561; 18 Fam LR 336. There needs to an error of principle and/or substantial injustice to one of the parties.

1. In Rutherford v Rutherford at 78,715 the joint judgment quoted from the judgment of Gibbs C.J., Aickin, Wilson and Brennan JJ. in Adam P Brown Male Fashions Pty. Ltd. V. Philip Morris Inc. (supra) at 177 thus:

"...

'Nor is there any serious dispute between the parties that appellate courts exercise particular caution in reviewing decisions pertaining to practice and procedure.  Counsel for Brown urged that specific cumulative bars operate to guide appellate courts in the discharge of that task.  Not only must there be error of principle, but the decision appealed from must work a substantial injustice to one of the parties.  The opposing view is that such criteria are to be expressed disjunctively.  Cases can be cited in support of both views:  for example, on the one hand, Niemann v. Electronic Industries Ltd. [[1978] VR 431 at 440]; on the other hand, De Mestre v. A.D. Hunter Pty. Ltd. [(1952) 77 WN (NSW) 143 at 146]. For ourselves, we believe it to be unnecessary and indeed unwise to lay down rigid and exhaustive criteria. The circumstances of different cases are infinitely various. We would merely repeat, with approval, the oft-cited statement of Sir Frederick Jordan in In re the Will of F.B. Gilbert (dec.) [(1946) 46 SR (NSW) 318 at 323]:

"...I am of the opinion that,...there is a material difference between an exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights.  In the former class of case, if a tight rein were not kept upon interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice.  The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal." "

1. In our view, the matters complained of by the applicant do not at this stage merit a grant of leave to appeal.  Any error of the trial Judge in respect of her conclusion as to the existence or otherwise of a signed costs agreement and as to whether or not such an agreement should be set aside will be capable of being dealt with on an appeal from any substantive order made by the trial Judge at the conclusion of the proceedings.  At this stage there is no indication one way of the other as to whether or not Mr Brott will be allowed to rely upon the agreement.  Her Honour may well dismiss the application to set the agreement aside, having regard to all of the surrounding circumstances of the case.  It is merely speculative to assume that because her Honour has made a finding that there is a preliminary bar to allowing Mr Brott to rely on the agreement, namely a finding that he had not signed it at what she perceived to be the relevant time, such a finding will necessarily lead to the agreement being set aside.  We do not perceive that the hardship that Mr Brott will have to undergo to deal with the discretion issue is such that merits the respondent being obliged to undertake exactly the very evil that the Court spoke of in Re the Will of F B Gilbert (supra) namely that the disposal of a case can be delayed interminably and costs seeped up indefinitely in challenging each exercise of discretion in an interlocutory application.

1. In determining this issue we are not seeking to draw any conclusions about the validity of the matters complained about by Mr Brott in his proposed Notice of Appeal nor in his submissions.  We make no ruling whatsoever on whether or not her Honour erred in finding that the agreement had been signed by Mr Brott a short time prior to the hearing.  We make no finding on whether or not the correspondence surrounding the Agreement can be looked at as providing the necessary signature for the purposes of the Family Law Rules.  We make no finding on who bears the onus of proof in respect of whether or not the costs agreement should be set aside in the event that there has been non-compliance with Order 38 sub-rule 27(2), (3) and (4).  We do not conclude, however, that Mr Brott will suffer such prejudice or hardship as to make it appropriate at this stage to interfere with the process that her Honour is undertaking in determining whether or not to grant the application of the wife, namely to set the costs agreement aside.  It is our view that the proceedings should run to its natural conclusion by her Honour determining whether or not to exercise her discretion before it is appropriate that there be an appellate review of the outcome.

1. The application for leave to appeal will be dismissed. 

1. It is unnecessary for reasons already explained for us to deal with the application for leave to appeal out of time.  Were we of the view that Mr Brott's right to appeal had been somehow compromised by the legislative lacuna then we would have granted the necessary leave to extend the time to enable those rights to be exercised.  However, in the circumstances we conclude that it is unnecessary for us to do so.

I certify that the 36 preceding
 paragraphs
are a true copy of the reasons
for judgment delivered by this
Honourable Full Court.


Elizabeth Hore
Associate