CLEWER & CLEWER
[2019] FCCA 725
•12 February 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| CLEWER & CLEWER | [2019] FCCA 725 |
| Catchwords: FAMILY LAW –Application for recusal. |
| Legislation: Family Law Act 1975 (Cth), ss.79A, 117(1) Federal Circuit Court Rules |
| Cases cited: Wise & Wise [2004] VSCA 88 Galea v Galea (1990) 19 NSWLR 263 |
| Applicant: | MS CLEWER |
| Respondent: | MR CLEWER |
| File Number: | PAC 2725 of 2017 |
| Judgment of: | Judge Harman |
| Hearing date: | 12 February 2019 |
| Date of Last Submission: | 12 February 2019 |
| Delivered at: | Parramatta |
| Delivered on: | 12 February 2019 |
REPRESENTATION
| Counsel for the Applicant: | Mr J Grew |
| Solicitors for the Applicant: | Coleman Greig Lawyers |
| Solicitors for the Respondent: | Mr G Penhall, Penhall & Co Lawyers |
ORDERS
Pursuant to section 117B(2) of the Family Law Act 1975 no interest shall be payable by the wife to the husband with respect to the above payment.
Each party shall pay their own costs of an incidental to these proceedings.
Pursuant to section 114 of the Family Law Act 1975 the parties and each of them shall be and are hereby restrained from taking any step with respect to proceedings SYG537/2018 before the Federal Circuit Court Sydney save and except for the purpose of discontinuing those proceedings or providing such other advice to the Court as may be necessary to allow the proceedings to be discontinued or dismissed without any Order for costs in favour of or against either party.
All outstanding Applications and Responses are withdrawn and dismissed and all issues are removed from the list of matters awaiting hearing.
THE COURT NOTES that the wife has now paid to the husband the sum of $100,000 that was required to be paid pursuant to Orders made 20 September 2017 and as varied 31 October 2018.
IT IS NOTED that publication of this judgment under the pseudonym Clewer & Clewer is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PARRAMATTA |
PAC 2725 of 2017
| MS CLEWER |
Applicant
And
| MR CLEWER |
Respondent
REASONS FOR JUDGMENT
These proceedings come before the court today for the fourth occasion.
The controversy between the parties which has caused today’s listing is, in essence, founded in compliance with, enforcement of or variation of a primary order made by this court on 20 September 2017.
It is important to consider the history of the proceedings, which I will do shortly. However, before being in a position to determine that which was listed for hearing today, there is now to be determined an application for recusal. That must be dealt with first.
The facts of the case are relevant to all issues.
The original proceedings between these parties were commenced by an Application Initiating Proceedings filed on 2 June 2017. The wife was the applicant in those proceedings. A response was filed 14 July 2017.
The primary proceedings were ultimately resolved by compromise between the parties and orders made on 20 September 2017. That compromise had followed upon the filing of an Application in a Case by the wife, which was returnable that day.
The Application in a Case sought that certain moneys be released from a trust account together with certain other orders. To their credit, the parties disposed of their primary proceedings efficiently.
The orders that were made by consent, hereinafter to be referred to as the “primary order”, provided that the parties were, within 42 days of the primary order, to do all things necessary to cause the husband to transfer to the wife his interest in a particular of parcel of real estate at Property C. The wife was simultaneously required to refinance the home and pay to the husband some $100,000.
The orders also provided that within 14 days of the primary order the parties were to do everything necessary to sell, by private treaty, two parcels of real estate, one at Property A, New South Wales, one at Property B, Queensland. The orders in relation to those sales specified the agent who was to act in relation to each conveyance as well as other matters.
The orders then provided that in the event that the proceeds of sale of those properties or either of them were insufficient to discharge the mortgages or other loans encumbering the Property B and Property A properties respectively that the wife would be responsible for the shortfall and that, simultaneous with sale of each of those two properties, that the wife would make payment to the husband of a sum calculated by reference to a particular formula set out in the orders.
What transpired is that the wife did not make payment to the husband. It is the wife’s evidence, (which, for the purpose of this determination, interlocutory in nature, I accept on its face as more probably correct than not), that whilst she had done all within her power to apply for and obtain a refinancing of the mortgage over the Property C property that she was frustrated in that purpose as the property was cross-collateralised with one or both of the Property A and Property B properties such that, until the sale of those properties occurred and thus the profit or loss crystallised, that she was not able to comply with her obligation under the order notwithstanding that she was, on her evidence, at all times, ready, willing and able to do so.
The wife has led evidence in her material filed in these proceedings, which material has become abundant, although the matter is no more complex than when commenced, that she had made applications in a timely fashion following the making of the primary order, but had been given that advice, that until such time as the cross-collateralised mortgages were discharged that she would not be able to borrow.
What thereafter transpired is that the husband, then being entitled to commence enforcement proceedings, determined rather than commence proceedings under the relevant provisions of the Federal Circuit Court Rules 2001, which would have involved an application before a Registrar in chambers for the issue of an enforcement warrant or such other relief as may have been considered appropriate, the husband filed a Bankruptcy Notice which was served upon the wife.
As a consequence of service of that notice, the wife then commenced proceedings before this court seeking relief pursuant to section 79A Family Law Act 1975.
The wife’s application first came before this court on 2 May 2018. On that date, certain orders were made, including, firstly, the suspension of the primary order to the extent that it required or compelled the wife to make payment to the husband. Thus, it was not possible, as and from 2 May, 2018, for an act of bankruptcy to be alleged. Secondly, the matter was listed for hearing to determine the wife’s section 79A application. That listing date was 31 October 2018.
On 31 October 2018, both parties appeared and were represented by counsel. The parties entered into orders by consent, albeit prefaced as “without admissions”, which had the effect of varying the primary order.
As a consequence of that variation and the subsequent sale of each of the Property A and Property B properties, the wife has now paid to the husband the sum certain that she was required to pay under the primary order as varied and the following issues adjourned to today for hearing, namely:
a)Whether the wife, having failed to comply with an order for the payment of $100,000 by 1 November 2017, should pay interest because of such default;
b)Whether the wife should be relieved from any obligation to pay interest because of the impact of orders made 2 May 2018, being the order for suspension of the primary order;
c)Who should bear the costs of the section 79A proceedings;
d)Who should bear the costs of the bankruptcy proceedings.
The latter issue was prefaced upon an order 2 May, 2018 made that the parties do all acts and things and make all requests which may be required or necessary to cause the bankruptcy proceedings to be transferred to and listed before this court and to be heard on the adjourned date.
It may be that there has been some misapprehension by the parties jointly or severally as to the intent and effect of the order. Certainly, from the Court’s perspective, it was intended that the parties would make joint application, ideally, by submitting an order by consent that the bankruptcy proceedings be transferred to this Registry. I have no power to require transfer of the proceedings or to direct their remittal from the Registrar or Judge upon whose docket the matter resides. The parties may need to deal with that issue at another time and in another forum.
The balance of the issues, however, can be addressed.
The wife indicates through her counsel that she no longer presses for any order as against the husband with respect to the costs incurred in the section 79A proceedings. The wife submits to an order with respect to interest from the date the payment was required under the primary order, namely, 2 November 2017, until the date of suspension of that order, 2 May 2018. That is an amount of approximately $4,000. The wife does not seek any other order.
The husband, for his part, indicates that he resists the relief that is sought by the wife, that he seeks payment of interest from 2 November 2017 until the date of eventual payment in early 2019. Interest calculated on that basis is a sum of approximately $8,500. Thus, the parties are at issue as to approximately $4,500.
The husband seeks an order for costs with respect to the section 79A proceedings. The husband seeks those costs on an indemnity basis. Those costs are suggested to be in the vicinity of $80,000.
They are the issues that were listed for trial before this court today.
The matter was called over shortly after 9.30 am and it was indicated to the parties that there were matters with greater priority, including a not reached matter that would need to be heard and determined first. That business has now been concluded. Accordingly, the matter is now called on to proceed. The matter cannot proceed until the application for recusal is determined.
It is submitted on behalf of the husband that he does not believe that he will receive a fair hearing or that justice will be done. It is unclear precisely exactly the basis or bases upon which that is suggested, save that it is submitted to be found in comments made by the Court that:
a)The proceedings appear to represent a perpetration of hatred between the parties; and,
b)The costs that are incurred in the proceedings are either a waste or disproportionate to the subject matter of the proceedings.
I am conscious of comments made by Eames AJ in Wise [2004] VSCA 88 at 14:
It is inevitable that a judge having read the depositions for a plea, as is appropriate in preparation, will have formed some tentative opinion about the case. In my view the fair minded observer would understand that that might be so and would not apprehend bias on that account. Furthermore, it is appropriate that a judge let counsel know what preliminary view he or she has formed, in order that counsel might address any concerns felt by the judge. In a busy sentencing court such as the County Court [this court is on the same level within the hierarchies of court] it might be thought quite appropriate that a judge quickly identify to counsel those matters which the judge considers significant. Whilst an interested bystander might think that a judge should sit quietly and hear out counsel, an informed bystander would appreciate that expedition and pointed questioning by the judge are not inconsistent with justice.
Similar comments were made by Kirby ACJ, as he then was, in Galea v Galea (1990) 19 NSWLR 263 at 279. His Honour, perhaps, went even further by acknowledging and investing judges with humanity. His Honour indicated that:
A judgment of the loss of impartiality and neutrality would not be made from a short and emotional exchange taken out of context and then weighed in isolation. Judges like witnesses, are human. Despite their professional training they are, in varying degrees, likely to show the range of emotions to which humanity is heir. Whilst patience is a judicial virtue, so also is a concern about justice, the efficient conduct of proceedings, and the avoidance of unnecessary delay, including to other litigants awaiting their hearing
The gravamen of this application is, perhaps, found in those comments before even turning to that opined by the High Court in Ebner as the appropriate test of the reasonably informed lay-bystander.
The comments that have been made by the Bench do not impact at all upon the merits of the claim that either party makes, save and except one aspect thereof. Upon it being indicated by the respondent’s legal representatives that the costs sought on an indemnity basis with respect to the section 79A proceedings, were in the quantum of $80,000, remark was passed to the effect, “You’re kidding?”
The above comment is informed by that which fell from Benjamin J in Simic & Norton [2017] FamCA 1007, and having regard to what has actually occurred in these proceedings.
The wife filed an application. It came before the Court in a duty list on its first return date. On that date, some discourse occurred with respect to the proceedings, particularly comments that the parties were wasting, at that point, not only their own resources, but public money, in perpetrating this dispute. I will return to that issue shortly. The matter was then promptly listed for hearing.
At hearing the matter was resolved by compromise, whether expressed as without admissions or otherwise.
The simple reality is that an order was made which concluded the controversy between the parties, save and except for the issues that were reserve the determination today as set out above. The applicant obtained, by consent, the relief she sought.
When the matter was first called today the parties were advised that there would about an hour to deal with the matter to finality. The estimate from the legal representative for the respondent was two hours. Having advised the parties that there were other matters with priority the matter was stood. The parties were directed to engage in negotiation to attempt to achieve some realisation of compromise between parties who, since the commencement of this tranche of proceedings, have demonstrated a relative incapacity to do so, save and except, to their credit, their compromise achieved on 31 October 2018 when counsel appeared for the respondent.
The Court then commenced to hear and determine the matter with priority. Another matter was dealt with in which compromise had been achieved. This matter was then called on. During the period that other business was dealt with the parties would not appear to have engaged in any discussion with each other. Of course, what occurs outside of the Courtroom could not be known to the court. But when one or both of the parties are sitting in the Court during that period it is difficult to understand, unless telepathically, how they have sought to communicate with each other. I do not make that comment to be sarcastic. There is no other way they could have communicated.
A direction was given by the court to engage in negotiation. It simply did not occur. I accept, probably, on instructions from the parties, as one or both did not wish to compromise their position.
In returning to the comments of their Honours Eames and Kirby referred to above, this is a busy trial court. It is a trial court which has far more work than it can possibly deal with simpliciter on any given day. Matters of this nature take up time, which is then, as discussed, for example, by the High Court in Aon Risk Services v ANU, not made available to other litigants. It is germane to consider the other litigants who were not offered today’s hearing date in preference to this matter being heard and determined expeditiously.
This date is fixed three months after the original date for hearing (when the section 79A relief was granted by consent). The cases displaced include cases where children are not seeing a parent, or a parent their child. Cases where children are seeing a parent, but are alleged to be at risk. Cases where children are at risk, full stop, irrespective of which parent they live with, see or don’t see. It is that business which this case displaces.
I will return to the comments of Eames AJ and Kirby ACJ. The comments that are made by the Court do not touch upon the merits of the case at all. They touch upon the relative proportionality of what the parties have done.
There is a real and live issue, although I need not determine it. It is not an application before me. That is the application that the wife committed an act of bankruptcy. The wife was required, by an order of this Court, to pay a sum certain. The wife has, at all times, had the wherewithal to be met that debt from capital, (if the order requiring payment might, for one moment, be described as a debt). There was more than sufficient equity in the property that was to be transferred to the wife, in return for payment, for her to satisfy the debt. The bankruptcy matters can be taken up by the parties in another forum.
When payment was not made and the clear difficulties impeding payment made clear, the appropriate response, one might have thought, would have been for the parties to negotiate a change of orders. For example, the orders provide, as is submitted on behalf of the respondent, specific real estate agents to list the property. The wife has asserted that the husband was negligent and delinquent in his obligations and, thus, there was significant delay. On the first return date the husband asserted that they had engaged, as was described be his legal representative, “a dud agent”. Comment was made by the Bench that if the agent is “a dud”, that the parties should take steps towards replacing them. It is now asserted that the parties were powerless in that regard as there was an order which compelled the selection of the agent.
Of course, the parties can do anything they choose by consent. But to do so, the proposal needs to be put, and it needs to be responded to in the affirmative. Why the parties could not simply have negotiated a resolution of this is unclear.
Both parties are legally represented and have been at all times. As the High Court discussed in the Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd litigation, these are matters which parties should, with competent legal advice, simply resolve away from the court. As Elizabeth I had, to her then Privy Council, opined in response to matters of this nature, “It is not a matter which concerns the Court.”
Parties have a right of access to a means of dispute resolution. So much as opined, and appropriately so, by Field and Boulle. However, the means of dispute resolution should be proportionate to the issue in dispute and the value of the dispute itself. This dispute, as it crystallises in relation to that which this court is asked to determine today, is, at best, approximately $4,500, the disputed interest between 2 May 2018 and early 2019, that interest calculated, subject to any order the Court might make to the contrary, by reference to the Federal Circuit Court Rules and being the somewhat usury rate of interest provided thereby.
In that context, as Eames AJ had opined, a comment cannot be taken out of context. Similarly, as Kirby ACJ had opined, one must have regard to the frustrations of a busy workload and this court’s duties to all litigants, as the High Court clearly expressed in Aon Risk Services. These parties, or, more correctly, the Respondent, it is he who seeks relief, seek to take up, and have already taken up, significant court resources not funded by them directly, but by the tax payers, collectively, of Australia. That has, today, been to agitate what is, in reality – leaving aside the costs dispute and whether such an order is made bearing in mind the general rule created by section 117(1) that each party bear their own costs – no more than $4,500. For that dispute the Respondent’s legal representative seeks to use half a day of this Court’s time and when $80,000 is suggested to have already been spent.
Parkinson & Knox have opined that the cost to the community of providing each day of court sitting is in the vicinity of $10,000, a figure that has been quoted to the parties before, indeed, that this was raised is one of the bases for suggested recusal. It is a reality. The Attorney General, Mr Porter, opines that the cost to the community of providing each judge of this court is a million dollars a year. If one divides that by sitting days, the $10,000 estimate is, in fact, somewhat modest. It would be more than that on the Attorney-General’s estimate. These parties will now take up more than one half of today. They have already taken up one half of a court day in a duty list.
This matter was allocated a hearing date in October, 2018, a full day. Accordingly, more than $20,000 of public money will be expended in dealing with this somewhat trivial dispute, using that term deliberately and advisedly in light of the quantum of the subject matter of interest suggested to be in dispute.
The test for recusal, as laid down by the High Court, is clear. As their Honours said in Ebner, the reasonable lay observer who is reasonably informed must be satisfied that comment or conduct has arisen from the Court which would prejudice any perception of a fair hearing. There has been no comment with respect to the subject matter. There has been no suggestion that the husband is not entitled to costs or interest. They are determinations yet to be made, indeed, the evidence yet to be considered. All that has been opined, very much consistent with Eames AJ and Kirby ACJ, is that the parties might have some regard to the proportionality of their dispute.
These parties are and have been, since the commencement of the first set of proceedings which resulted in the primary order, involved in bankruptcy proceedings. This could have been a simple enforcement case, one that could have been dealt with under the Federal Circuit Court Rules without the need even for a Court appearance. But instead, the harshest and most oppressive relief that could have been sought was sought. It was sought other than treating the Family Law Act as an exclusive jurisdiction to deal with matrimonial causes, although, accepting, for one moment, that it is a matter for a party to enforce a monetary debt as they consider appropriate.
Rather than simply engage in discussion, compromise, resolution of the problem which, at least from the wife’s perspective, underlies her failure to comply with the order, the husband commenced bankruptcy proceedings and then, once proceedings were before this court, in two locations and jurisdictions, refusing to engage in any discussion.
I am conscious of that which fell from the Supreme Court of New South Wales in Bryant v Hawkesbury Community Radio. That Court, in the context of “costs following the cause” opined that even a party with a strong case is required, as a consequence of sensible and appropriate use of the Court’s resources, as the Bar Rules and Uniform Solicitors Conduct Rules each provide, should not invoke the Court’s coercive jurisdiction unreasonably or without due consideration and to then use the Court’s resources, let alone those of the parties, appropriately and as economically as possible for the benefit of the community as well as the parties. Parties need not assume, even in a jurisdiction such as the Supreme Court, where costs follow the cause, that there will be an immediate consequence, a costs order.
In circumstances whereby no comment has been made at any point as to the subject matter of the controversy, merely that the parties are using, as it were, a sledgehammer to break a very small nut, I am not satisfied that the case is made by the respondent. This is a small money claim with respect to interest, interest which, at its highest, on the respondent’s case, is $8,500. Yet costs are now suggested to be incurred and, thus, sought by way of indemnity costs order against the applicant, 10 times that amount. Proportionality, as discussed by Benjamin J in Simic & Norton, could not be suggested as applicable to these proceedings. It is in that context that any comment as to the parties “wasting” their time, the Court’s time, the Court’s resources and the parties’ money are made, not by reference to the circumstances of the dispute itself.
The husband may well be perfectly entitled to the relief he seeks. When the evidence is presented and tested, that will become apparent. At this point, however, all that has been commented upon is the lack of utility of the expenditure which the parties have engaged upon. If the husband has, in fact, incurred costs of $80,000 and is not successful in obtaining an indemnity costs order, even if he obtains a party/party costs order, he will be left in a dramatically worse position than he would have been if he had simply sought to negotiate a sensible conclusion to the business which was concluded on 31 October 2018 when the wife obtained the order she sought.
In those circumstances, I do not propose to recuse myself. The ground is not made out.
I certify that the preceding fifty-five (55) paragraphs are a true copy of the reasons for judgment of Judge Harman
Date:11 April 2019
0
3
3