Dimmick & Harrison (No 3)

[2023] FedCFamC1A 81

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1) APPELLATE JURISDICTION

Dimmick & Harrison (No 3) [2023] FedCFamC1A 81

Appeal from:

Dimmick & Harrison [2022] FedCFamC2F 1329

Appeal number(s):

NAA 14 of 2023

File number(s):

SYC 4298 of 2021

Judgment of:

SCHONELL J

Date of judgment:

25 May 2023

Catchwords:

FAMILY LAW – APPEAL – Leave to institute proceedings out of time – Where the appellant at trial sought leave to institute property proceedings seven years out of time – Whether the primary judge fell into error in determining if there was a prima facie case and in considering if hardship would be occasioned – Where the primary judge fell into error in inferring that a typographical error on the respondent’s Financial Statement was the mortgage balance when there was no evidence of such – Where the primary judge made an erroneous finding that the appellant had no liabilities – Where the primary judge did not consider the non-financial and homemaker contributions as well as the matters within the rubric of s 90SF(3) of the Family Law Act 1975 (Cth) – Where mistake of fact and failure to take into account some material consideration has been established – Inadequacy of reasons – Where the primary judge did not provide reasons as to why the appellant’s non-financial contributions, poor health and limited employment options would not lead to a conclusion that the appellant would not suffer hardship if leave were not granted – Leave to appeal allowed – Appeal allowed – Matter remitted for rehearing – Costs certificates issued.

Legislation:

Family Law Act 1975 (Cth) ss 44, 90RD, 90SF, 90SM

Cases cited:

Bennett and Bennett (1991) FLC 92-191; [1990] FamCA 148

Edmunds & Edmunds (2018) FLC 93-847; [2018] FamCAFC 121

Emerald & Emerald (2018) FLC 93-870; [2018] FamCAFC 217

Gadzen & Simpkin (2018) FLC 93-871; [2018] FamCAFC 218

House v The King (1936) 55 CLR 499; [1936] HCA 40

Masih & El Saeid [2020] FamCAFC 152

Medlow & Medlow (2016) FLC 93-692; [2016] FamCAFC 34

Sharp v Sharp (2011) 50 Fam LR 567; [2011] FamCAFC 150

Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52

Walker and Walker (1984) FLC 91-564; [1984] FamCA 55

Whitford and Whitford (1979) FLC 90-612; [1979] FamCA 3

Number of paragraphs:

49

Date of hearing:

18 May 2023

Place:

Sydney

Counsel for the Appellant:

Dr Barnett SC with Mr Bateman

Solicitor for the Appellant:

G & D Lawyers

Counsel for the Respondent:

Mr Galapo

Solicitor for the Respondent:

Jenman Lawyers

ORDERS

NAA 14 of 2023
SYC 4298 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTION

BETWEEN:

MR DIMMICK

Appellant

AND:

EXECUTOR ESTATE OF THE LATE MS HARRISON

Respondent

order made by:	SCHONELL J
DATE OF ORDER:	25 MAY 2023

THE COURT ORDERS THAT:

1.Leave to appeal is granted.

2.The appeal is allowed.

3.Order 2 made by the Federal Circuit and Family Court of Australia (Division 2) on 22 December 2022 is set aside.

4.The matter is remitted to a judge of the Federal Circuit and Family Court of Australia (Division 2) other than the primary judge for a determination as to whether pursuant to s 44(6) of the Family Law Act 1975 (Cth) the appellant should be granted leave to prosecute the application for financial orders filed 9 June 2021.

5.The appellant is granted a costs certificate pursuant to s 9 of the Federal Proceedings (Costs) Act 1981 (Cth), 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 in respect of the costs incurred by him in the appeal.

6.The respondent is granted a costs certificate pursuant to s 6 of the Federal Proceedings (Costs) Act 1981 (Cth), 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 in respect of the costs incurred in the appeal.

Note:   The form of the order is subject to the entry in the Court’s records.

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Dimmick & Harrison has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

SCHONELL J:

1. On 22 December 2022, a judge of the Federal Circuit and Family Court of Australia (Division 2) made a declaration that the parties were in a de facto relationship from 2000 to 2012 and thereafter dismissed the appellant’s application pursuant to s 44(6) of the Family Law Act1975 (Cth) (“the Act”) for leave to bring proceedings out of time.

2. By Amended Notice of Appeal filed 12 April 2023, the appellant seeks leave to appeal and thereafter, to appeal only the order refusing the grant of leave to bring proceedings out of time.

3. For the following reasons, I am satisfied that the primary judge’s determination was erroneous.

   BACKGROUND

4. The primary judge determined that the parties were in a de facto relationship between 2000 and 2012. In circumstances where the appellant filed his Initiating Application on 9 June 2021, it was some seven years after the expiry of the time in which to bring an application.

5. The primary judge, having determined the length of the parties’ relationship, proceeded to hear the appellant’s application for leave. The primary judge accurately recorded that the appellant bore the onus to satisfy the Court that hardship would be caused if leave were not granted. In that respect, the primary judge recorded that the appellant needed to establish that he had “a prima facie case worth pursuing, or a real probability of success” (at [101]) (footnote omitted). The primary judge identified that in assessing whether the appellant had a prima facie case, the Court would consider the assets of the parties, the contribution based entitlements and any adjustment necessary in relation to the parties’ future needs (at [104]).

6. There is no issue that the primary judge correctly identified the relevant legal principles.

7. The primary judge identified that no cost notices were filed nor did the appellant provide any estimate of the future costs of the litigation.  The primary judge also identified that neither party addressed a consideration of the principles arising from the High Court’s decision in Stanford v Stanford (2012) 247 CLR 108.

8. The primary judge thereafter identified that she did not have the benefit of a jointly prepared Balance Sheet and that on the material the best she could identify was that the respondent had purchased a property at Suburb B (“the Suburb B property”) for $747,000 subject to a mortgage (at [110]). There was no evidence of its current value. The appellant had assets having a value of $1,343, did not have any liabilities, and had superannuation of either $1,137 or $5,214 (at [106]). The primary judge found that a sum of $430,000 referenced in the respondent’s Financial Statement filed 28 February 2022 as cash at bank was a typographical error in circumstances where the case as conducted was that the only significant asset was the Suburb B property (at [108]). This sum was found by the primary judge to be the mortgage balance.

9. The primary judge observed in relation to the contribution based entitlements: the length of the relationship; the initial contributions; that the respondent received an inheritance, some of which was used to pay a tax debt of the appellant; and that the respondent paid the mortgage and utilities on the Suburb B property. The primary judge recorded the appellant’s concession that he made no direct contribution to the purchase of the Suburb B property, that the appellant was a guarantor on the refinance, and that a payment of funds from his superannuation was used to repay a loan to the respondent but not otherwise.

10. The primary judge did not accept the appellant’s evidence as to his income but recorded his evidence as to the payment of groceries and household expenses. The primary judge also recorded the appellant’s evidence of his homemaking contributions and contributions to gardening and landscaping but made no findings in relation to those contributions.

11. As to the respective future needs, the primary judge accepted the appellant’s evidence that he was in poor health with a disability and chronic health condition, that he was in receipt of government benefits, and that his health difficulties limited his employment opportunities as a tradesman. Her Honour also recorded that as the respondent had passed away there was no adjustment for any future needs for her (at [116]).

12. The primary judge determined as follows:

    Has the [appellant] established that he has a prima facie case worth pursuing that alleviates a hardship or substantial detriment?

    119. The [appellant] bears the onus to demonstrate hardship pursuant to section 44(6). In considering the pool the only evidence is that the [Suburb B] property was purchased for $747,000, 20 years ago, and has a current mortgage of around $430,000. There is limited evidence of direct and indirect financial contributions made during the period of the de facto relationship from 2000 to 2012. There is no evidence from the [appellant] of what the costs of pursuing any claim may be.

    120. The evidence provided by the [appellant] does not support a finding that he would suffer hardship were leave not granted. I do not accept that not granting leave would cause him privation, or a substantial detriment. Having so found, I need not consider the discretionary factors in relation to the reasons for delay. I find that the application should be dismissed.

    LEAVE TO APPEAL

13. The appellant concedes that the determination by the primary judge in refusing to grant leave is an interlocutory determination and therefore leave to appeal is necessary. Leave will be granted if an appellant is able to establish that the determination of the primary judge is attended by sufficient doubt and that a substantial injustice would result if leave were refused (Medlow & Medlow (2016) FLC 93-692).

    GROUNDS OF APPEAL

14. The Amended Notice of Appeal contends three grounds all of which are directed to the findings by the primary judge that the appellant would not suffer hardship if leave were refused.  Ground 1 contended that the primary judge failed to materially consider and evaluate whether the appellant had a prima facie case, Ground 2 contended that the primary judge erred in her consideration of hardship, and Ground 3 contended an inadequacy of reasons. Grounds 1 and 2 were argued together and accordingly will be addressed in the same way.

15. The determination by the primary judge involved the exercise of a discretion. It is well established that for an appellant to succeed in an appeal from an exercise of discretion, they must bring their appeal within one of the recognised categories of appellant intervention identified by the High Court in House v The King (1936) 55 CLR 499 (“House v The King”).

16. It is not in issue that the requirement to provide reasons and the adequacy thereof depends upon the circumstances of each particular case (see Bennett and Bennett (1991) FLC 92-191 at 78,266).

    APPLICABLE LAW

17. To obtain a grant of leave pursuant to s 44(6) of the Act, the appellant must demonstrate that hardship would be occasioned if leave were not granted.

18. Hardship will ordinarily be established by the appellant demonstrating that they have a prima facie case of some consequence (Gadzen & Simpkin (2018) FLC 93-871). In Edmunds & Edmunds (2018) FLC 93-847, the Full Court observed:

    48.That involves a consideration, but not a final determination, of the nature of the applicant’s claim.  In doing so, the Court must weigh the applicant’s case against that of the respondent’s and form a view as to whether there is in fact a prima facie case, or a real probability of success, that would, if leave were granted, alleviate hardship.

19. The likely costs of the litigation is but a factor to be considered in determining whether or not hardship would be alleviated (Whitford and Whitford (1979) FLC 90-612 (“Whitford”); Walker and Walker (1984) FLC 91-564).

20. If hardship is established, then the Court will consider, in the exercise of its discretion to grant leave, matters including whether there is an explanation for the delay (albeit the absence of an explanation is not necessarily determinative (see Emerald & Emerald (2018) FLC 93-870)) and the question of any prejudice to the respondent. In that respect, as the Full Court observed in Sharp v Sharp (2011) 50 Fam LR 567:

    97. Merely because the respondent to an application for leave does not point to particular prejudice that might arise if leave were granted, does not dispose of the question. The law presumes prejudice to flow to a person sought to be joined in litigation after the effluxion of the relevant time limits. Even if the court came to the view that there was no significant prejudice to the respondent, the court may consider whether in all of the circumstances of the case, it is just and reasonable to grant the extension sought. The New South Wales court of Appeal in McLean v Sydney Water Corporation [2001] NSWCA 122, per Giles JA (Hodgson and Stein JA agreeing) said at [22] that:

    22. … Prejudice engendered by delay and unlikelihood of a fair trial will be highly material, and if there is prejudice and unlikelihood of a fair trial that will tell strongly, often conclusively, against the grant of an extension of time. It does not follow that in the absence of prejudice (other than general prejudice) and unlikelihood of a fair trial it will be just and reasonable to grant an extension of time.

21. It is axiomatic that if the appellant does not have a prima facie case, then there could be no hardship occasioned by the refusal to grant leave.

22. Such applications are usually determined on the papers and are summary in nature. It is therefore not a hearing on the merits and the appellant’s untested evidence is taken at its highest (see Whitford).

    GROUNDS 1 AND 2

23. It is not in issue that the primary judge in determining whether the appellant had a prima facie case correctly identified that she needed to consider the assets of the parties, their respective contributions and any adjustment in relation to future needs. The appellant, however, contended by Ground 1 that in undertaking this assessment the primary judge fell into error. 

24. The first such contended error was the finding by the primary judge that a reference in the respondent’s Financial Statement filed 28 February 2022 to cash at bank constituted a typographical error (at [108]). The appellant contended that such a finding was “contrary to the ordinary reading of the Financial Statement” (appellant’s Summary of Argument filed 12 April 2023, paragraph 22) (footnote omitted). The appellant’s assertion, however, ignores the reasons for the conclusion reached by the primary judge, namely that “[t]he case was run on the basis that the only significant asset is the [Suburb B] property” (at [108]). No submission was made by the appellant’s counsel that the assets of the respondent included a substantial sum of money in a bank account. In circumstances where it is not contented that the primary judge was in error in finding that the case was conducted on the basis that the only significant asset was the Suburb B property, then the primary judge’s conclusion was consistent with the case as presented.

25. The appellant, however, also submitted that the primary judge was in error in concluding that the typographical error established that the reference to $430,000 should be construed as evidence of the mortgage balance. In so finding, it was submitted that the primary judge fell into error. The respondent’s counsel conceded that there was no evidence of the mortgage balance other than what it was in 2014. He submitted though that the primary judge’s finding at [108] that “[a] reasonable conclusion is that $430,000- represents the negative of the mortgage rather than an asset” was open on the evidence. The respondent also submitted that the Court should conclude that given the reference in the respondent’s Financial Statement to this amount (albeit in Part I dealing with property owned) as “$430,000-”, the dash sign after the numbers should be interpreted as a negative.

26. I do not accept either of these submissions. It was clearly open to find, as the primary judge did, that it was typographical error and that the respondent did not have a bank account with a balance of that amount as it was consistent with the way that the case was conducted. However, that process of deduction or inference does not permit or lead to the alternative conclusion that it was evidence of something else, namely the mortgage balance. Nor does it permit of the alternative explanation as advanced by the respondent’s counsel.

27. The primary judge advances no reasons for how she came to that conclusion other than it was “[a] reasonable conclusion” (at [108]). The reasonableness could only be informed by some evidence. While the Court could safely conclude that there was a mortgage secured against the property as that was the evidence of the respondent, there was simply no evidence from which it could conclude that it had a value of $430,000 or any other amount.

28. The appellant submitted that the primary judge erred in finding at [109] that the appellant had no liabilities. The appellant referred to the evidence that he gave in his affidavit filed 21 February 2022 that he had a credit card liability of $19,607 as at 1 March 2021 as well as the cross-examination of the appellant that confirmed that his credit card liability at the time of hearing remained at that amount. The respondent quite properly conceded that the primary judge’s finding that the appellant had no liabilities was accordingly erroneous.

29. The appellant also submitted that the primary judge failed to make adequate findings regarding the issue of contributions including that the primary judge did not make findings consistent with the respondent’s evidence that the appellant made payments of $200 a week (albeit that her evidence was that he missed a few weeks) towards living expenses. The appellant also submitted that the primary judge did not properly consider the lump sum payments made by the appellant which were said to total $8,000. The evidence of the respondent was that the appellant paid $200 per week by way of board/rent and that the $8000 paid into the mortgage was in repayment of a loan.

30. The primary judge records that the appellant contributed to the household expenses by way of payment of living expenses (at [118]). The primary judge found that “[t]here is limited evidence of direct and indirect financial contributions during the period of the de facto relationship” (at [119]). Within the context of that which the appellant submits the primary judge did not do, it is not demonstrated that the primary judge’s conclusion was erroneous.

31. As to the sum of $8,000 paid by the appellant into the mortgage, the respondent’s evidence was that this was paid into the mortgage as part repayment of a debt said to be owed by the appellant to the respondent’s former partner. The appellant submitted that in light of a finding by the primary judge at [89] that there was “very limited evidence of any loan made by [the respondent’s former partner] to the [appellant]”, the Court should find this to be a contribution by the appellant which the primary judge did not consider in assessing the appellant’s contributions. The respondent submitted correctly that the appellant gave no evidence of these payments and that the respondent’s evidence was unchallenged as to the circumstances in which the monies were paid. I accept the respondent’s counsel’s submission as it accords with the evidence of the parties.

1. The appellant also submitted that the primary judge did not consider the appellant’s non-financial contributions. This submission has merit. The primary judge records the appellant’s evidence of homemaker and non-financial contributions at [115], but does not thereafter consider it within the context of her determination as to whether the appellant had a prima facie case.

2. The primary judge’s considerations as to whether the appellant had a prima facie case are referred to at [119] and [120]. Senior counsel for the appellant submitted that in those paragraphs the primary judge considers the appellant’s financial contributions but fails to consider the appellant’s non-financial and homemaker contributions. She also submitted that the primary judge did not have regard to any matters within the rubric of s 90SF(3) of the Act, despite there being evidence of such at [116], in considering whether the appellant had a prima facie case.

3. Counsel for the respondent submitted that the primary judge’s reasons have to be read in their totality and, if that is done, then it is apparent that the primary judge refers to the various contributions of the appellant at [115] and [116]. He submitted that in reading the judgment as a whole it is clear that the s 90SF(3) matters were considered by the primary judge in her determination that the appellant would not suffer hardship.

4. Ordinarily such a submission might have some force. However, here the primary judge specifically referenced at [119] and [120] to the factors that she had regard to in determining whether the appellant had a prima facie case. Her Honour erroneously included the mortgage balance for the Suburb B property when there was no evidence to found same, made no reference to the appellant’s liabilities of $19,000 (having erroneously found he had none), and considered only the appellant’s “limited direct and indirect financial contributions” (at [119]). The primary judge did not consider his non-financial and homemaker contributions or the fact that he was in poor health, he had a disability, he was on government benefits and he had limited employment opportunities.

5. I accept the appellant’s submission that in light of the primary judge’s earlier findings the determination is incongruent. Such incongruence can only be explained by a failure of the primary judge to consider the appellant’s non-financial and homemaker contributions, issues about his health, and his earning capacity in the context of a consideration of whether the appellant had a prima facie case and consequentially the issue of hardship. This is compounded by the primary judge’s erroneous finding that the appellant had no liabilities in circumstances where he had a credit card debt of about $19,000. In the context of the appellant’s already parlous financial position, the quantum of this debt looms large in the consideration of hardship. Thus, the House v The King error within the context of a mistake of fact and failure to take into account some material consideration has been established.

6. The respondent contended that the appellant failed to adduce any evidence as to the costs of the litigation. The submission of the respondent as far as it goes is correct. However, this is the simplest of cases; there is one asset and the evidence of contributions has been extensively addressed in the s 90RD determination. It is difficult to imagine that more could be said. Indeed, if leave were granted, the s 90SM determination could be completed in less than half a day. In that context, the cost of the litigation would be modest.

7. For the above reasons, I am satisfied that Grounds 1 and 2 demonstrate error.

   GROUND 3

8. Ground 3 contends that there was an inadequacy of reasons informing dismissal of the appellant’s application.

9. Under the heading “[h]as the [appellant] established that he has a prima facie case worth pursuing that alleviates a hardship or substantial detriment”, the primary judge provides her reasons at [119] and [120]. The primary judge identifies that the primary property for division was the Suburb B property, that there is limited evidence of the direct and indirect financial contributions made by the appellant, and that there is no evidence of the costs of the proceedings. Having made such findings, the primary judge concludes that the evidence adduced by the appellant did not support a finding of hardship.

10. That finding, however, ignores the evidence of the appellant’s non-financial and homemaker contributions as well as the evidence as to his health and limited earning capacity.

11. The primary judge does not provide any reasons as to why the appellant’s non-financial contributions, homemaker contributions or the matters identified by the primary judge such as the appellant’s poor health including his disability and chronic health condition, as well as the limitations that are imposed on his employment opportunities would not be such to lead to a conclusion that the appellant would suffer hardship if leave were not granted.

12. In Masih & El Saeid [2020] FamCAFC 152, the Full Court observed as follows in the context of the facts in that case:

    63.Reasons for judgment must refer to relevant evidence, state the primary judge’s findings upon material questions of fact and provide an explanation for the findings and the ultimate conclusions reached (DL v The Queen (2018) 356 ALR 197 at [130]). That obligation was not satisfactorily discharged in this instance. The appellant is left wondering how his case about the respondent’s alienation of the children, supported in large measure by the single expert’s evidence, was understood and squarely addressed by the primary judge (Bennett and Bennett (1991) FLC 92-191 at 78,266; Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 at [59]). Consequently, Ground 3 succeeds.

13. As in that case so it is here. The appellant in this case is left wondering why it is that his health issues and limited earning capacity were not considered by the primary judge in determining he would not suffer hardship. A failure to do so amounts to an error of law.

14. I am satisfied that Ground 3 demonstrates error.

    CONCLUSION

15. Where the appellant has established error, I am satisfied that a substantial injustice would be occasioned to the appellant if leave to appeal were not granted.

16. Senior counsel for the appellant and counsel for the respondent both submitted that given the state of the evidence, I could not re-exercise the discretion. The consequence, as unfortunate as it is, is that the matter will be remitted to another judge other than the primary judge for determination as to whether or not leave should be granted.

17. In circumstances where the appellant has been successful on a point of law, then it is appropriate that a costs certificate be granted to each of the parties.

18. I will make orders accordingly.

I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Schonell.

Associate:

Dated:       25 May 2023