Ebner & Pappas
[2014] FamCAFC 229
•27 November 2014
FAMILY COURT OF AUSTRALIA
| EBNER & PAPPAS | [2014] FamCAFC 229 |
FAMILY LAW – APPEAL – Whether leave is required to appeal from a decision to summarily dismiss an application to vary orders pursuant to s 79A of the Family Law Act 1975 (Cth) – Where the decision is interlocutory in nature – Leave to appeal required.
FAMILY LAW – APPLICATION FOR LEAVE TO APPEAL – Where the parties had consented to the making of final property orders – Where the husband sought to vary the orders pursuant to s 79A of the Family Law Act 1975 (Cth) alleging that the wife had failed to disclose financial interests – Where the trial judge found that the husband had knowledge of the financial interests – Where the trial judge found that the husband lacked a reasonable cause of action and summarily dismissed the application – Discussion of the appropriate test in applications for summary dismissal – Discussion of the self-represented litigants guidelines – Application for leave to appeal dismissed.
FAMILY LAW – APPLICATION TO ADDUCE FURTHER EVIDENCE - Where controversial and inadmissible evidence was sought to be adduced – Application dismissed.
FAMILY LAW – COSTS – Where the wife sought indemnity costs – Where the husband submitted that there should be no order for costs due to his impecuniosity – Where the original application and the appeal was doomed to fail – Where exceptional circumstances exist – Indemnity costs order made.
| Family Law Act 1975 (Cth) ss 79A, 94 AA, 93A Family Law Regulations 1984 (Cth) reg 15A Family Law Rules 2004 (Cth) r 10.12 |
| Bretton & Bondai [2013] FamCAFC 168 |
| APPLICANT: | Mr Ebner |
| RESPONDENT: | Ms Pappas |
| FILE NUMBER: | SYC | 4655 | of | 2008 |
| APPEAL NUMBER: | EA | 72 | of | 2013 |
| DATE DELIVERED: | 27 November 2014 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | May, Ainslie-Wallace & Aldridge JJ |
| HEARING DATE: | 21 August 2014 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 24 May 2013 |
| LOWER COURT MNC: | [2013] FamCA 458 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Dura |
| SOLICITOR FOR THE APPELLANT: | Bruce & Stewart Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Einfeld QC with Ms Christie |
| SOLICITOR FOR THE RESPONDENT: | ACA Lawyers |
Orders
The application in an appeal filed by the husband on 15 August 2014 be dismissed.
The notice of appeal filed on 13 June 2013 and the application by the husband for leave to appeal made orally be dismissed.
The husband pay the costs of and incidental to the appeal and application for leave to appeal of the wife as agreed, or in default of agreement, as assessed. The costs to be assessed on a party party basis with the exception of the costs to be assessed on an indemnity basis from 23 December 2013.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Ebner & Pappas has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EA 72 of 2013
File Number: SYC 4655 of 2008
| Mr Ebner |
Appellant
And
| Ms Pappas |
Respondent
REASONS FOR JUDGMENT
INTRODUCTION
On 25 October 2012 the Family Court of Australia made consent orders resolving the property proceedings between Ms Pappas (“the wife”) and Mr Ebner (“the husband”). By an application dated 29 January 2013 the husband sought to vary those orders. In response, in her application filed on 22 April 2013, the wife asked for summary dismissal of the husband’s application.
On 24 May 2013 Stevenson J summarily dismissed the husband’s application. By notice of appeal filed 13 June 2013 the husband appeals from that order.
Background
The parties were married in 1995 and separated in July 2007 although they continued to reside under the one roof until 4 November 2008. They have two children who, at the time of the hearing before Stevenson J, were aged 16 and 13.
Property settlement proceedings between the parties commenced in 2007 and were litigated until resolved by consent orders made on 25 October 2012. The Orders of 25 October 2012, as far as is relevant to the present appeal, provide:
1.That the parties acknowledge that the property known as [B] (the Property) is presently encumbered by way of four mortgage accounts (the Mortgage) to National Australia Bank (the Bank) securing a facility limit of $920,000 (the Facility Limit). As at 16 October 2012 the mortgage accounts with a total drawn amount of $680,000 are as follows:
i.Account 1236 drawn $196,987.68 current repayment $1,359.94 per month.
ii.Account 2603 drawn $240,913.53 current repayment $1,667.08 per month.
iii.Account 2943 drawn $92,545.74 current repayment $1,297.86 per month.
iv.Account 8185 drawn 149,553.05 with no monthly repayment and a facility limit of $200,000.
2.That on 16 October 2012, the Husband shall ensure that the amount drawn under the Mortgage is $680,000 with a Facility Limit of $730,446.95 whereafter the Wife shall immediately be responsible for the Mortgage and indemnify and hold the Husband harmless from any claim or action by the Bank.
3.That immediately upon the Wife providing a bank cheque issued by an Australian bank sufficient to discharge the Mortgage in full, the Husband shall contemporaneously with the discharge of the Mortgage in full, do all things and sign all documents necessary to transfer to the Wife his interest in the Property subject to the Mortgage to the Wife including giving a direction to the Bank to release the title to the Property directly to the Wife. As from the discharge of the Mortgage, the following paragraphs 4, 5, 6, 7, 8 and 11 will cease to have effect except to the extent of any rights or liabilities arising prior to the date of discharge of the Mortgage.
4.The until such time that the Wife discharges the Mortgage under paragraph 3 and subject to paragraph 5 below, the Wife shall make minimum monthly payments of $3,000 per month into the Mortgage for the first annual period after the date of these Orders and thereafter minimum monthly payments of $4,000 per month with such monies to be first applied towards interest and thereafter to a reduction of principal outstanding.
5.The Wife is at liberty to pay lump sum amounts into the Mortgage as a reduction of principal outstanding which for the purposes of the Orders will be applied as an equivalent amount of payments required by paragraph 4 above.
6.The Wife shall be at liberty to draw upon the Mortgage any funds to meet minimum monthly payments arising under paragraph 5 up to the Facility Limit but for no other purpose.
7.The Husband shall be at liberty to draw upon the Mortgage any funds to meet principal and interest obligations to the Bank arising under the Mortgage but for no other purpose.
8.Neither party shall further encumber the Property without firstly discharging the Mortgage in full except that the parties may mutually agree to obtain an increase of the Facility Limit from the Bank at any time.
9.That in the event of any sale or disposition of the Property after the date of these Orders and the net sale proceeds are $3,250,000 or more after repayment of any renovation costs to the Wife and payment of all real estate agent’s commission and selling costs, then the Wife shall pay to the Husband an amount of $80,000 and the parties are to provide all necessary instructions and authorities to cause $80,000 to be paid to the Husband from the net proceeds of sale upon settlement of the Property.
10.That the Wife is responsible for all costs of or relating to the Property or its transfer, including but not limited to real estate agency commissions, council and water rates and applicable land taxes whensoever arising, any capital gains tax or income tax payable by the Husband as a result of these Orders or transfer and the Wife shall within 5 days indemnify the Husband in the event any such cost, taxes or amount is paid by the Husband. The Husband shall do such lawful things reasonably requested by the Wife which lawfully minimise or avoid the imposition of such costs, taxes or amounts. Any expenses arising from such requests are to be paid by the Wife.
11.That if the Mortgage is in default and not remedied within 30 days of the default, both parties agree do all things and sign all documents necessary to sell the Property and provide all necessary instructions and authorities to cause the net proceeds of sale to be applied in the following order and priority:
a. Repayment of the sum required to discharge the Mortgage secured on the Property.
b. Payment of all legal costs associated with the sale of the Property;
c. Payment of all Real Estate Agent’s commission and selling costs;
d. Payment to the Husband of $80,000 if payment is required by paragraph 9 above.
e. In payment of the balance to the Wife.
… …
15. That as against the Husband the Wife be solely entitled to all other property, both real and personal in his ownership, possession or control including but not limited to:
a) Her interests in the [F] Trust;
b) Her interests in [E] Pty Limited;
c)Her interests in [Pappas] Pty Limited;
d) Her interest in the [F] Superannuation Fund;
e) Her interest in any shares;
f) All funds held in financial institutions in her name.
g) All household contents and personal effects including jewellery currently in her possession save and except those items referred to in the list of chattels attached to these Orders.
(As per original)
The husband’s s 79A application
The application filed by the husband did not, by its terms, purport to seek orders pursuant to s 79A of the Family Law Act 1975 (Cth) (“the Act”) although her Honour assumed for the purposes of the hearing before her that the application was and it was not contended otherwise on appeal.
The orders sought in the husband’s initiating application filed on 29 January 2013 were:
1.That the Court order and insert as Order 8A to the Orders of
25 October 2012 (Proceedings SYC4655 of 2008) that the Wife not dispose of her interest in Property for a period of three years from 25 October 2012 without leave of the Court with the Court at liberty to hear submissions from the parties as to whether such sale is in the best interests of the children.2.That the Court order that existing Order 9 of the Orders of
25 October 2012 (Proceedings SYC4655 of 2008) be deleted and be replaced by the following words as Order 9 to the Orders:“That in the event of any sale or disposition of the Property after the date of these Orders, then the Wife shall pay to the Husband an amount of $105,000 and the parties are to provide all necessary instructions and authorities to cause that $105,000 is to be paid to the Husband from the net proceeds of sale upon settlement of the Property. The amount of $105,000 shall not bear interest for a period of three years after 25 October 2012, thereafter at a rate of
4 percent per annum until such time as the amount is paid to the Husband.”3.That the Wife pay to the Husband his costs arising during 2012 under proceedings SYC4655 of 2008.
The basis for the husband’s application was that the wife had not correctly and fully disclosed her financial position prior to the making of the consent orders.
In particular, the husband asserted that the wife had failed to disclose in her Financial Statement filed on 16 May 2012 interests in E Pty Ltd, Pappas Pty Ltd, D Unit Trust and the F Trust, and had falsely attributed a nil value in her interest in the Business D. The husband said, in reliance on a valuation dated 10 March 2011 of Mr A and obtained for the purposes of the property settlement proceedings that the combined value of the wife’s interest in these entities was $726,238. The husband further contended that, although the wife filed her Financial Statement on 16 May 2012 she did not serve a copy of it on the husband and, despite being directed to do so at a procedural hearing on 6 June 2012, it was not served on the husband until 16 October 2012 the day on which both the husband and the wife signed the consent orders, the subject of the application.
(Affidavit husband 24 January 2013 [2], [5], [7] and [9])
Further, the husband contended that on several occasions the wife said to the court that she had no funds with which to pay the cost of obtaining expert valuations of various interests for the purposes of the hearing. The husband said that at a procedural hearing, the judge, on the basis of the wife’s assertions of impecuniosity, ordered that in the first instance, the husband pay the costs of any valuation reports. The husband said that, as a consequence, he believed that he would be wholly responsible for all valuation expenses without contribution from the wife which, he considered could be in the order of $100,000.
(Affidavit of husband 24 January 2013 [1], [3], [5] and [6].)
The husband further relied on the wife’s assertion made during the hearing of her application for financial support for the children, that her share investment portfolio of $350,000 had been reduced by half because of the global financial crisis. Further, he referred to her comment to the judge that:
“… there’s an indemnity on [H Firm’s] part to hold that money until 2017, and they’ve given me an indemnity that they will return the money plus interest if I don’t touch it until that date.”
(Transcript of 16 March 2012 page 25 lines 34 to 36 being Exhibit “B” to the husband’s affidavit of 24 January 2013.)
On 18 July 2012, the husband wrote to the wife, referring to the indemnity given in relation her investment portfolio and said:
As I said, the indemnity then includes interest and is due June 2014 (not 2015). You will get roughly $450,000 payout. This gives you sufficient funds to manage the mortgage together with rent of ground level …
I await your written proposal re settlement options in the next few days.
(Exhibit “C” to the Husband’s affidavit of 24 January 2013)
The husband asserted:
… As a result of the numerous statements under oath of the Wife that she had no money and that her business was worthless, I gave up on my requirement that the matrimonial home not be sold for at least three years. To protect the benefit of the children residing in the matrimonial home I would have insisted on this restriction on sale being part of the Consent Orders if I knew the Wife was ready and able to refinance and meet the cost of the mortgage.
(Affidavit of husband 24 January 2013 [20])
In a further affidavit filed on 16 May 2013, after setting out the material upon which he proposed to rely on the application, the husband said at [A]:
… Furthermore I rely on documents produced under subpoena on Commonwealth Bank, [H Firm] and [D Unit Trust]. As there was an objection made to photocopying on the grounds of confidentiality, I request that the whole of the documents will need to be available in Court on 20 May 2013.
The husband also said at [25]:
… Furthermore the wife does not address the fact that her non-disclosure misled the court on a number of occasions with the result that the court ruled adversely against me such that I felt it necessary to abandon litigation and seek settlement on favourable terms.
For her part, the wife accepted that her financial statement sworn on 16 May 2012 did not refer to the H Firm share portfolio and described the value of her interests in Business D as nil. She said, at [11] of her affidavit filed 20 May 2013:
Despite the non-disclosure, after preparation of the Financial Statement and up until the making of the consent orders on 25 October 2012, the business valuation of [Business D] prepared by [Mr A] and Share Portfolio documentation from [H Investments] were always disclosed and presented as part of the negotiations for the Final settlement.
The husband did not dispute the correctness of this statement.
Thus the husband’s application was based upon a failure of the wife to include reference to her share portfolio and incorrectly asserting that her interest in Business D was nil in her 16 May 2012 Financial Statement and what the husband contended were her incorrect statements to the Court.
The trial judge’s reasons
After setting out the orders sought by the husband, her Honour noted that the husband was apparently seeking to vary the consent orders pursuant to s 79A of the Act and that the application appeared to be based on s 79A(1)(a). This section provides:
(1) Where, on application by a person affected by an order made by a court under section 79 in property proceedings, the court is satisfied:
(a) there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance;
...
the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.
The primary judge noted that the wife asserted that her share portfolio had been the subject of a valuation by Mr A and that valuation had been disclosed in financial statements sworn by her on 21 January 2010 and 26 November 2010. She further observed that both the husband and the wife referred to Mr A’s valuation in their affidavits and, indeed the husband had included a table prepared by Mr A which set out the wife’s interests in various entities and against which he attributed a valuation at [6] and [7].
Further, her Honour noted the husband’s evidence that he had relied on the report of Mr A in preparing a document used in conducting settlement negotiations with the wife (at [10]). After noting the wife’s evidence that her share portfolio had been included in the “final summary of assets” used to reach a settlement of the property proceedings, her Honour concluded: “… It is patently obvious that the wife’s shareholding was included in both documents” (at [11]).
The judge set out the contents of a letter dated 16 March 2009 from H Firm to the wife, annexed to the husband’s affidavit, which read in part at [14]:
Following on from our recent meeting please accept this letter as confirmation that [H Firm] agrees to indemnify you against the fall in the value of your portfolio from commencement to the value at 12th March 2009. That amount that will be covered by this indemnity is detailed in the following table:
Value at Commencement
Value 12/3/2009
Difference
$350,000
$211,864
$138,136
Plus Interest
$96,698
$234,834
TOTAL
$234,834
Based on this information we calculate that the fall in your portfolio value during this period amounts to $234,834. Interest has been calculated at an average of 5% p.a. for the 5 year period.
The indemnity that our firm is providing on this amount means that on
1st July 2014 your portfolio will be in the same position you would have been, had it not fallen in value to the amount described above during this period.
Her Honour thus concluded at [14]:
… On the basis of his own evidence, therefore, the husband was fully aware of this arrangement between the wife and [H Firm].
The judge was satisfied on the husband’s own evidence that he was fully aware at all relevant times that the wife had held a share portfolio. The judge concluded at [16] that:
In these circumstances, I am satisfied that the husband was fully on notice at all relevant times that the wife held a share portfolio. In my view, the husband’s evidence alone was sufficient to establish that he was aware of the existence of her share portfolio and the [H Firm] indemnity. He had this knowledge at all relevant times, including the point when he elected to resolve the proceedings on a final basis. Additionally, the wife’s evidence and the draft balance sheet prepared by his lawyers establish that he knew of the wife’s shareholding.
Her Honour continued at [17]:
The reality of the husband’s complaint in relation to the wife’s share portfolio would thus seem to be that she omitted to include these assets and an estimate of their value in her Financial Statement of 16 May 2012. It is nonetheless abundantly clear that the husband was fully aware of the existence of the wife’s share portfolio and elected to investigate this issue by way of a subpoena to [H Firm]. In these circumstances, I am of the view that the husband cannot now assert a miscarriage of justice by way of suppression of evidence, including failure to disclose relevant information, for the purposes of s.79A(1)(a) of the Family Law Act, simply on the basis that the wife failed to include her share portfolio in her Financial Statement of 16 May 2012.
Her Honour then noted that the husband was in possession of Mr A’s report of March 2012 which had dealt with the valuation of the wife’s business interests and said at [21]:
In these circumstances, it is my view that the husband cannot now assert a miscarriage of justice by way of suppression of evidence, including failure to disclose relevant information, for the purposes of s.79A(1)(a) in relation to the value of the wife’s business interests. He was in possession of a report by a court appointed single expert in relation to that very issue.
At [22] the judge concluded:
… It appears that the husband took issue with some items in the wife’s May 2012 Financial Statement and obtained documents by way of subpoenas to the Commonwealth Bank, [H Firm] and [Business D]. If the husband did not in fact have these documents before he consented to the orders of 25 October 2012, it was always open to him to issue these subpoenas before he elected to finalise the proceedings.
We would add that the husband had legal representation prior to the court order being made.
Her Honour referred to Lindon v Commonwealth of Australia(No. 2) (1996) 136 ALR 251 at page 256 and Friar & Friar [2011] FamCAFC 71 where the principles as to the court’s approach to applications for summary dismissal are summarised. Her Honour then said:
[30]… It is clear to me, for reasons set out above, that he had knowledge of the matters about which he now complains when he elected to enter into the consent orders of 25 October 2012. At that time he had the benefit of legal representation.
[31] In these circumstances, I can see no basis upon which any amendment to the husband’s application could advance his prospects of success. I thus will take the unusual step of making an order for summary dismissal of the husband’s application pursuant to section 79A. I am satisfied that the husband lacks a reasonable cause of action. It may be that he advances a claim which is clearly frivolous or vexatious, in the manner to which the High Court referred in Lindon v Commonwealth of Australia.That being so, I will also dismiss his application for an order that the wife pay his costs “arising during 2012”
(Emphasis in original)
Is leave to appeal required?
Counsel for the wife submitted that, as the application for summary dismissal was an interlocutory application, the husband’s appeal was incompetent because he had neither sought nor obtained leave of the court under s 94AA of the Act and regulation 15A(1) of the Family Law Regulations 1984 (Cth) (“the Regulations”).
In Wickstead v Browne (1992) 30 NSWLR 1, at p. 11 Handley and Cripps JJA said:
… When the appeal was called on, the Court drew attention to the need for leave to appeal since the orders for summary dismissal were interlocutory. Mr Spender QC submitted that the orders were final but we are satisfied on binding authority that they were interlocutory and that leave to appeal was required: see Hall v Nominal Defendant (1966) 117 CLR 423 at 440 per Taylor J who referred to English authority directly in point dating from 1890 and Tampion v Anderson (1973) 48 ALJR 11 at 12; 3 ALR 414 at 415-417, a decision of the Privy Council. The point was in truth unarguable. We are however of the view that leave to appeal should be granted.
In Re Luck [2003] HCA 70; (2003) 203 ALR 1 McHugh ACJ, Gummow and Heydon JJ said at [9]:
… An order is an interlocutory order, therefore, when it stays or dismisses an action or refuses leave to commence or proceed with an action because the action is frivolous, vexatious, an abuse of the process of the court or does not disclose a reasonable cause of action.
The order here dismissed an action because the judge found it did not disclose a reasonable cause of action. Consistently then with authority it was an interlocutory order.
Further, section 79A(1) empowers the court, if satisfied of one of the matters referred to in that sub-section and if it considers it appropriate, to vary or set aside existing orders made under s 79 of the Act. This is the very language of an interlocutory application. It follows that proceedings under s 79A, at least in so far as they seek to set aside existing property orders are interlocutory in nature and leave to appeal is required.
During the appeal, counsel for the husband made an oral application for leave to appeal in the event it was determined that leave was required. In support of that application he submitted that the dismissal of the husband’s case meant an end to his application under s 79A which could not properly be brought again unless there was a change in material facts, notwithstanding that the application was interlocutory. This, it was submitted, would work a substantial injustice against the husband.
For the wife it was submitted that leave ought to be refused because, notwithstanding that the need to obtain leave had been pointed out to the husband in the wife’s written submissions filed on 23 December 2013, no application had been made before the oral application made during the appeal. Further it was contended that no explanation was given for that delay.
Secondly, it was submitted that the dismissal of the husband’s application under s 79A did not work a serious injustice as the husband could always bring in a further application under s 79A, subject to there being established further, relevant facts.
Finally, it was contended that there was no merit in the appeal in any event and thus it would be futile to grant leave to appeal.
It is a feature common to interlocutory applications that an unsuccessful interlocutory application may again be brought before the court but will not be entertained unless there has been a material change in circumstances.
The merits of any proposed appeal are relevant to the success of any application for leave to appeal. As our discussion of the proposed grounds of appeal will demonstrate, there is no merit in the appeal whatsoever.
Application to adduce further evidence
By an application in an appeal filed on 15 August 2014 the husband sought, pursuant to s 93A(2) of the Act, to rely on his affidavit sworn 15 August 2014 and that it be considered as further evidence in the appeal. The affidavit largely referred to documents which he said had recently come into his possession. Two sets of documents in particular were sought to be relied upon.
First, the husband asserted that in July 2013 “ledger accounts of [E Pty Ltd] and the [Business D] (the business conducted by [E Pty Ltd]) have since come into my possession”. He contended that those documents established that the business had significant clients who paid large and regular sums of money to it. The ledgers, he said, were not made available to Mr A, the single expert appointed by the court to value the wife’s interests in these companies.
Secondly, the husband said that in September 2013, pursuant to a subpoena issued in Supreme Court proceedings, documents were produced that showed $359,057 had been deposited to the “The Pappas CG Family Trust” and that on 19 August 2013 $300,025 of those funds was transferred to the wife. This, the husband asserts, established that the wife was a beneficiary of the Pappas CG Family Trust and thus she had failed to disclose that interest.
No evidence was proffered for the delay from the time when the husband became aware of these documents after receiving them in July and September 2013 and making this application. Because the application to adduce further evidence was filed one week before the hearing of the appeal the wife was deprived of any opportunity to deal with the assertions in the affidavit.
As correctly submitted by the counsel for the wife, the assertions by the husband in the affidavit are inadmissible.
It was further submitted by the wife that there was no evidence that the ledgers would have been or were relevant to a valuation of E Pty Ltd.
It was submitted that merely because the wife received money that originated from the Pappas CG Family Trust that receipt does not establish, of itself, that she was a beneficiary of the trust.
There is much force in those submissions.
The ability to adduce further evidence in an appeal is significantly constrained.
In CDJ v VAJ (1998) 197 CLR 172, McHugh, Gummow and Callinan JJ considered the power of this court to admit further evidence. At page 201 their Honours observed that the exercise of the power is remedial in nature, to give the Full Court discretion to receive further evidence where “that evidence, if accepted, would demonstrate that the order under appeal is erroneous.”
After considering the nature of the jurisdiction of the Full Court to hear appeals, their Honours said:
111. Nor can the availability of further evidence relevant to the issues in the appeal be treated as equivalent to a ground of appeal, proof of which prima facie entitles the appellant to a new trial. The power to admit the further evidence exists to serve the demands of justice. 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.
Further it was said:
114. Where there is no need for a new trial or extensive taking of evidence, other discretionary factors such as the availability of the evidence at the trial and the need for finality of litigation are likely to be more relevant in the exercise of the discretion than the effect that the evidence would have had at the trial.
It is immediately apparent that the evidence on which the husband would wish to rely on the appeal is controversial as can be seen from the submission of the wife. Further, its reception would require the taking of extensive evidence in order to understand its purported effect. The wife said that she would wish to adduce evidence to establish that ledgers of the company had in fact been produced in answer to the earlier subpoena and that she was not a beneficiary of the Pappas CG Family Trust.
For those reasons, together with our conclusion that the appeal should be dismissed, the application to adduce further evidence will be dismissed.
The appeal
The husband’s notice of appeal contains eleven grounds. In his written summary of argument the husband sought instead to argue only two grounds of appeal. We will consider the grounds as argued.
Ground 1
In identifying the correct test and principles relating to applications for summary dismissal the learned trial Judge failed to properly apply them.
It is convenient first to consider the rules and authorities applicable to the application.
Rule 10.12 of the Family Law Rules 2004 (Cth) provides:
A party may apply for summary orders after a response has been filed if the party claims, in relation to the application or response, that:
(a) the court has no jurisdiction;
(b) the other party has no legal capacity to apply for the orders sought;
(c) it is frivolous, vexatious or an abuse of process; or
(d) there is no reasonable likelihood of success.
In Lindon v Commonwealth of Australia(No. 2) (1996) 136 ALR 251 the High Court of Australia held (at page 255 - 256):
The approach to be taken by the court to the Commonwealth’s application for summary relief is not in doubt:
1.It is a serious matter to deprive a person of access to the courts of law for it is there that the rule of law is upheld, including against government and other powerful interests. This is why relief, whether under O 26, r 18 or in the inherent jurisdiction of the court, is rarely and sparingly provided.
2.To secure such relief, the party seeking it must show that it is clear, on the face of the opponent’s documents, that the opponent lacks a reasonable cause of action or is advancing a claim that is clearly frivolous or vexatious.
3.An opinion of the court that a case appears weak and such that it is unlikely to succeed is not, alone, sufficient to warrant summary termination. Even a weak case is entitled to the time of a court. Experience teaches that the concentration of attention, elaborated evidence and argument and extended time for reflection will sometimes turn an apparently unpromising cause into a successful judgment.
4.Summary relief of the kind provided for by O 26, r 18, for absence of a reasonable cause of action, is not a substitute for proceeding by way of demurrer. If there is a serious legal question to be determined, it should ordinarily be determined at a trial for the proof of facts may sometimes assist the judicial mind to understand and apply the law that is invoked and to do so in circumstances more conducive to deciding a real case involving actual litigants rather than one determined on imagined or assumed facts.
5.If notwithstanding the defects of pleadings, it appears that a party may have a reasonable cause of action which it has failed to put in proper form, a court will ordinarily allow that party to reframe its pleading. A question has arisen as to whether O 26, r 18 applies to part only of a pleading. However, it is unnecessary in this case to consider that question because the Commonwealth’s attack was upon the entirety of Mr Lindon’s statement of claim.
6.The guiding principle is, as stated in O26, r 18(2), doing what is just. If it is clear that proceedings within the concept of the pleading under scrutiny are doomed to fail, the court should dismiss the action to protect the defendant from being further troubled, to save the plaintiff from further costs and disappointment and to relieve the court of the burden of further wasted time which could be devoted to the determination of claims which have legal merit.
(Footnotes omitted)
In Friar & Friar [2011] FamCAFC 71 the Full Court said:
49.Rules 10.12(c) and (d) of the Family Law Rules 2004 (“the Rules”) relevantly provide that a respondent may apply for “summary orders” in relation to an application on the basis that it is “frivolous, vexatious or an abuse of process” or has “no reasonable likelihood of success”.
50.The Rules are properly read as supplementing the power of the Court to dismiss frivolous or vexatious proceedings pursuant to s 118(1) of the Act. The Rules are also to be read in the context of the many cases confirming the Court’s inherent power to dismiss or permanently stay an application which cannot succeed, as to which see the authorities discussed in Bigg v Suzi (1998) FLC 92-799 at 84,974.
The phrase “no reasonable likelihood of success” is, at least in relation to the test to be applied in the summary dismissal proceedings, of relatively recent origin.
In Bretton & Bondai [2013] FamCAFC 168 Finn and Strickland JJ at [59], and May J at [122], considered this is a conceptually different test to the “doomed to fail” test.
In Spencer v Commonwealth of Australia (2010) 241 CLR 118, referring to a Federal Court Rule in similar terms to Rule 10.12, Hayne, Crennan, Kiefel and Bell JJ said at [56]:
Because s 31A(3) provides that certainty of failure (“hopeless” or “bound to fail”) need not be demonstrated in order to show that a plaintiff has no reasonable prospect of prosecuting an action, it is evident that s 31A is to be understood as requiring a different enquiry from that which had to be made under earlier procedural regimes. It follows, of course, that it is dangerous to seek to elucidate the meaning of the statutory expression “no reasonable prospect of successfully prosecuting the proceeding” by reference to what is said in those earlier cases.
The applicable test was considered by another intermediate court of appeal, the Victorian Court of Appeal in Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Construction) v Blanalko Pty Ltd [2013] VSCA 158. At that time the relevant legislative test in Victoria was “no real prospect of success”. There at [27] Warren CJ and Nettle JA said:
… whatever might be the practical effect of the new test, it is difficult to disagree with McMurdo J in Gray v Morris and McMurdo P in the Commissioner of Taxation v Salcedo that it should be applied by reference to its own language, without paraphrase or comparison with the previous rule, always bearing in mind the principle that the power to award summary judgment is only to be exercised with caution and, therefore, not unless it is clear that there is no real question to be tried.
(Footnotes omitted)
Their Honours continued at [35]:
Upon the present state of authority:
a) the test for summary judgment under s 63 of the Civil Procedure Act 2010 is whether the respondent to the application for summary judgment has a ‘real’ as opposed to a ‘fanciful’ chance of success;
b) the test is to be applied by reference to its own language and without paraphrase or comparison with the ‘hopeless’ or ‘bound to fail test’ essayed in General Steel;
c) it should be understood, however, that the test is to some degree a more liberal test than the ‘hopeless’ or ‘bound to fail’ test essayed in General Steel and, therefore, permits of the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent’s case is not hopeless or bound to fail, it does not have a real prospect of success;
d) at the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.
As the trial judge correctly made plain, the setting aside or variation of orders under s 79A(1)(a) requires satisfaction not only of a suppression of evidence, which includes failure to disclose relevant information, but also a miscarriage of justice by reason of that suppression.
The trial judge concluded that, as the husband was aware, from earlier disclosure, of the wife’s assets and had evidence as to their value, there could not be a miscarriage of justice by reason of their non-disclosure in the 16 May 2012 financial statement or by the wife’s various statements to the court. Thus, the judge found that the husband’s application had no reasonable likelihood of success. In doing so her Honour properly applied the correct test.
It was submitted by the husband that in disposing of his application the trial judge did not take the husband’s case at its highest and relied upon evidence adduced by the wife. The husband submitted that her Honour was in error in giving that evidence due consideration, particularly where it had, he submitted, been conceded by the wife that there had been a “material, albeit not deliberate, failure to disclose”.
Her Honour found that the husband was, prior to consenting to the orders of
25 October 2012, in possession of considerable material to challenge the values recorded by the wife in her financial statement sworn 16 May 2012. He was on notice of the wife’s share portfolio and the arrangement with H Firm. He had a single expert’s valuation of the wife’s businesses. He still elected to settle the matter.
In coming to those findings her Honour relied entirely on the evidence of the husband.
It is true that the trial judge referred to evidence of the wife in partial explanation of the omission from her May 2012 financial statement, the impact on her of cancer treatment she was receiving at that time.
Although a matter referred to by her Honour, that was clearly not a consideration that affected her Honour’s primary determination which was, even accepting that there was no relevant explanation for the non-disclosure in the May 2012 financial statement, the husband’s own evidence indicated that no miscarriage of justice flowed from the inaccuracies in this document.
It was then submitted by the husband that, had the parties, or one of them, been legally represented before her Honour, a comparison of respective balance sheets could have been undertaken by the trial judge to establish prejudice flowing to the husband or the wife if his summary dismissal application was granted or refused. Thus it was submitted, as there was no evidence as to what should comprise the balance sheet, it was not open for the trial judge to make a finding that the husband lacked a reasonable cause of action.
Absent a complaint of denial of procedural fairness, the fact that the husband’s case might have been conducted differently had he, or the wife, been legally represented is irrelevant. The trial judge can only deal with the evidence and submissions placed before her by the parties, whether represented or not.
The husband then submitted that even if his case was weak he should still have been entitled to pursue it.
Her Honour correctly identified the appropriate principles to be applied. There is no doubt that her Honour was well aware of the significant burden on the party who seeks to have the other party’s case summarily dismissed. On the evidence relied upon by the husband, her Honour’s finding that the husband lacked a reasonable cause of action in that he had failed to establish a miscarriage of justice was clearly correct.
Finally, it was submitted that the trial judge erred in not giving the husband the opportunity to correct or amend his pleadings to rely on a different subsection of s79A. This was an aspect of the matter expressly considered by her Honour. She said (as previously set out above):
30. In my view, the husband made no submission or gave any evidence which could be construed as an indication that he relied on subparagraphs (b),(c),(d) or (e) of section 79A(1). It is clear to me, for reasons set out above, that he had knowledge of the matters about which he now complains when he elevated to enter in the consent orders of 25 October 2012. At that time he had the benefit of legal representation.
31. In these circumstances, I can see no basis upon which any amendment to the husband’s application could advance his prospects of success. …
At no stage, either before the trial judge, or before us, did the husband suggest what amendments he might have been able to make to his application that would save it from summary dismissal.
There is no merit in this ground of appeal.
It should be observed that the case for the husband was that the non-disclosure by the wife justified the new orders he proposed be made pursuant to s 79. The proposed orders provided that the wife be restrained from disposing of her interests in the B property for a period of three years unless the court was satisfied that such disposal was in the interests of the children. The proposed orders also sought that the husband receive $105,000 of the proceeds of any sale regardless of the sale price. We accept the submission for counsel for the wife that the proposed orders under s 79 would not be justified by the asserted non-disclosures being established. This, of itself, demonstrates that no miscarriage of justice occurred through the asserted non-disclosure.
Ground 2
That the learned trial Judge failed to properly apply and follow the guidelines in respect of litigants in person as set out in Re F: Litigants in Persons Guidelines (2001) FLC 93-072.
The guidelines to which the ground refer are:
(1) A judge should ensure as far as is possible that procedural fairness is afforded to all parties whether represented or appearing in person in order to ensure a fair trial.
(2) A judge should inform the litigant in person of the manner in which the trial is to proceed, the order of calling witnesses and the right which he or she has to cross examine the witnesses.
(3) A judge should explain to the litigant in person any procedures relevant to the litigation.
(4) A judge should generally assist the litigant in person by taking basic information from witnesses called, such as name, address and occupation.
(5) If a change in the normal procedure is requested by the other parties such as the calling of witnesses out of turn the judge may, if he/she considers that there is any serious possibility of such a change causing any injustice to a litigant in person, explain to the unrepresented party the effect and perhaps the undesirability of the interposition of witnesses and his or her right to object to that course.
(6) A judge may provide general advice to a litigant in person that he or she has the right to object to inadmissible evidence, and to inquire whether he or she so objects. A judge is not obliged to provide advice on each occasion that particular questions or documents arise.
(7) If a question is asked, or evidence is sought to be tendered in respect of which the litigant in person has a possible claim of privilege, to inform the litigant of his or her rights.
(8) A judge should attempt to clarify the substance of the submissions of the litigant in person, especially in cases where, because of garrulous or misconceived advocacy, the substantive issues are either ignored, given little attention or obfuscated: Neil v Nott (1994) 121 ALR 148 at 150.
(9) Where the interests of justice and the circumstances of the case require it, a judge may:
• draw attention to the law applied by the court in determining issues before it;
• question witnesses;
• identify applications or submissions which ought to be put to the court;
• suggest procedural steps that may be taken by a party;
• clarify the particulars of the orders sought by a litigant in person or the bases for such orders.
The above list is not intended to be exhaustive and there may well be other interventions that a judge may properly make without giving rise to an apprehension of bias.
It was submitted by the husband that the primary judge failed to follow the guidelines in three ways. First, that the judge failed to explain to the parties procedures relevant to litigation and particularly the reliance on documents produced on subpoena. It was submitted (at [24.1]):
… No opportunity was provided by the Court to the Appellant to have access to the documents produced nor any assistance offered as to the manner or process in which those documents are to come before the Court.
The husband was asked twice by the trial judge to identify the material he relied upon. He referred to his affidavits and the response to the initiating application served by the wife. He did not refer to there being any document produced in response to a subpoena on which he wished to rely. In those circumstances it is hardly surprising that the trial judge did not give him advice as to how to access that material.
It was submitted that, as there had been a reference to documents produced under subpoena in the husband’s affidavits, he should have been advised by her Honour as to the process by which he could have access to those documents and, further advised as to how they might be used by him.
Given that the husband had already extracted and annexed to his affidavit parts of the documents produced under subpoena there is an unappealing illogicality about the submission.
Further, as the above quoted passages from the husband’s evidence make perfectly plain, he had a familiarity with subpoenas and subpoenaed documents in this court.
The husband’s second complaint was that her Honour failed to give proper advice as to the right to object to inadmissible evidence. The submission inferred that her Honour had regard to that inadmissible evidence.
After having read the affidavits on which the parties relied, her Honour said:
… Now, the way that the matter will proceed will be by way of submissions, it being a duty application. There will not be any oral evidence. I have read the affidavits and I will read them subject to proper exclusions and exceptions. As the matter is in a duty list, I will not be entertaining formal objections to the affidavit material.
Having said that, I will not place weight on material which clearly should not have been put in the affidavits. …
(Transcript 20 May 2013 page 4 lines 3 to 9)
On the appeal, the husband’s submissions did not identify the inadmissible material upon which the trial judge was said to have relied in support of this ground.
The trial judge based her decision on the evidence of the husband himself. The admissibility, or otherwise, of the wife’s evidence is, therefore, irrelevant.
We further observe that in his affidavit filed in response to that of the wife, the husband took specific objection to many paragraphs of the wife’s evidence. It is not clear what explanation the trial judge could have given him that would have better aided his understanding of his entitlement to object to evidence and one was not suggested during submissions on this ground during the appeal.
Finally, it was submitted that the trial judge failed to inform “the parties as to the law to be applied in determining the question it had before it”.
In his submissions to her Honour, the husband said:
MR [EBNER]: You Honour, first of all, just through the courts, the issue of summary dismissal, I would just – refer the court to ..… being .…. which applied principles set down in Lindon in the High Court.
HER HONOUR: Yes. I’m familiar with those authorities. Thank you.
MR [EBNER]: Yes. So on the basis of those cases, I don’t believe that the husbands – or my case in the initiating application is doomed to fail in any shape or form and I would just seek the court rely on my evidence and none of the evidence put forward by the wife. I did have some other orders that I was seeking but that’s basically my submission regarding the summary dismissal.
(Transcript 20 May 2013 page 5 line 27 to line 37)
Whilst it was accepted during submissions on the appeal that the husband himself had referred to the authority of Lindon, it was argued that her Honour had not given either party an explanation “as to the precise matters that the court is to take into consideration and affording the husband to address those matters in any detail in his submissions” (at [24.3]).
As the husband was obviously aware of the relevant authorities, principles and considerations to be taken into account by the court, it is impossible to see any force in his complaint that the trial judge did not refer him to them and inform him of them.
This ground also has no merit.
The application for leave to appeal, made orally, and the appeal, will be dismissed.
Costs
The wife sought an order for costs, on a party party basis prior to 23 December 2014, and on an indemnity basis after 23 December 2013, in the event that the appeal was found to be incompetently brought, that is, that the husband was required to seek leave to appeal. On 23 December 2013 the summary of argument was filed on behalf of the wife, which brought to the husband’s attention the need to seek leave to appeal.
Consideration of costs on an appeal fall to be determined by reference to s 117 of the Act which provides that, subject to subsection (2), each party to proceedings under the Act should bear his or her own costs. Section 117(2A) sets out the matters which must be taken into account where the court is of the opinion that an order for costs is otherwise warranted. It was contended for the wife that if the husband’s application was wholly unsuccessful a costs order should be made.
The husband submitted that if he was unsuccessful there should be no order for costs because both the application pursuant to s 79A and the subsequent appeal were based upon an admitted non-disclosure by the wife. He also relied upon his poor financial position asserting that most of his annual income was subject to a garnishee order obtained by the wife for repayment of a costs order made by the Supreme Court of New South Wales.
As to the admitted non-disclosure, principal in her Honour’s decision to dismiss the husband’s application was not the non-disclosure per se but whether there had been established any material miscarriage of justice occasioned by that non-disclosure. None was and the admitted non-disclosure thus has no relevance.
As to the husband’s claimed impecuniosity, whilst the financial position of the parties is a relevant consideration, impecuniosity is not, of itself, a bar to costs order. If it was an impecunious litigant could always avoid an adverse costs order Lenova & Lenova (Costs) [2011] FamCAFC 141 at [12].
The appeal was entirely unsuccessful. In all the circumstances the appropriate order is that the husband pay the wife’s costs of the application for leave to appeal and the appeal.
Indemnity Costs
Costs are ordered to be paid on an indemnity basis only in exceptional cases. In Colgate-Palmolive Company v Cussons Pty Limited [1993] FCA 801; (1993) 46 FCR 225 Sheppard J said at p 233-234, after noting that the categories of indemnity costs are not closed:
… it is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion. I instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud …; evidence of particular misconduct that causes loss of time to the court and other parties …; the fact that proceedings were commenced or continued for some ulterior motive … or in wilful disregard of known facts or clearly established law …; the making of allegations which never ought to have been made or the undue prolongation of a case by groundless contentions…; and imprudent refusal of an offer to compromise…; and an award of costs on an indemnity basis against a contemnor … The question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for payment of costs other than on a party and party basis.
(Citations omitted)
The wife submits that the original application and the appeal were doomed to fail and were thus pursued in wilful disregard of known facts. The wife further asserts that the husband was on notice of the need to seek leave to appeal from 23 December 2013.
The husband’s own evidence indicated that he knew that the 16 May 2012 financial statement was not accurate and that the statements made to the court relied on by him may not have been accurate. He had valuations available to him of the wife’s assets. He, then being represented by lawyers, elected to settle the matter on the information then known to him without wishing to make any further enquiries. It is impossible to see how any miscarriage of justice could be established. Further, as we have pointed out, there was no material link between what was said to have been not disclosed and the new orders that the husband sought under s 79.
The husband persisted with these submissions before us. He failed to establish any arguable ground of appeal. Contrary to the submission of the husband, these factors are exceptional and there will be an order that the husband pay the costs of and incidental to the appeal, as agreed, or in default of agreement as assessed, such costs to be assessed on a party party basis before 23 December 2013 and on an indemnity basis after 23 December 2013.
I certify that the preceding one hundred and five (105) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (May, Ainslie-Wallace & Aldridge JJ) delivered on 27 November 2014
Associate:
Date: 27 November 2014
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