GIDEON & GIDEON

[2006] FamCA 1313

FAMILY COURT OF AUSTRALIA

GIDEON & GIDEON [2006] FamCA 1313

APPLICATION – Reinstatement of an application for leave to appeal deemed abandoned for non-compliance with a procedural order - In the course of s79A proceedings, orders were made requiring that monies held in the wife’s solicitor’s trust account continue to be held as security for the husband’s costs – Wife sought to leave to appeal this order – Wife did not file her pre-argument statement by mid-June 2006 as required – Substantive issue came on for hearing in July 2006 – Wife’s solicitors withdrew, claiming to be out of funds – The unrepresented wife was granted an adjournment – Within 8 days the wife’s solicitors resumed acting for her – Three days after they were back on the record, the application for leave to appeal against the security for costs order was deemed abandoned – The wife’s solicitor gave evidence that an error in his office lead to the failure to file the pre-argument statement on time – No explanation was provided for the three and a half month delay in seeking to reinstate the appeal after it had been deemed abandoned – To reinstate the appeal would further delay the hearing of the substantive trial listed for February 2007 – Nothing substantive flows from the security of costs order as the wife may never be required to pay any monies to the husband – It would be inappropriate to reinstate the application for leave to appeal due to the delay, the fact that it is unlikely to be successful if reinstated, and because it would affect the proper conduct of the business of the court – Application dismissed.

Family Law Act 1975 (Cth)

APPELLANT WIFE: Y GIDEON

RESPONDENT HUSBAND: R GIDEON

FILE NUMBER: MLF 1675 of 2003

APPEAL NUMBER: SA 18 L of 2006

DATE DELIVERED: 16 NOVEMBER 2006

PLACE DELIVERED: Melbourne

JUDGMENT OF: THE HONOURABLE JUSTICE KAY

HEARING DATE: 16 NOVEMBER 2006

LOWER COURT JURISDICTION: Family Court of Australia

LOWER COURT ORDER DATE: 17 February 2006

LOWER COURT MNC:

REPRESENTATION

COUNSEL FOR THE APPELLANT: MR LEVINE

SOLICITORS FOR THE APPELLANT: ISSAC BROTT & CO

COUNSEL FOR THE RESPONDENT: MS JOHNS

SOLICITORS FOR THE RESPONDENT: FORTE FAMILY LAWYERS

Orders

(1)      The applicant wife pay $2500 towards the respondent husband's costs. 

(2)      The application is otherwise dismissed.

(3)The application in a case filed 25 October 2006 is struck out, the application in a case filed 2 November 2006 is struck out.

FAMILY COURT OF AUSTRALIA AT MELBOURNE

Appeal Number: SA 18 L of 2006
File Number: MLF 1675 of 2003

Y GIDEON

Appellant Wife

And

R GIDEON

Respondent Husband

REASONS FOR JUDGMENT

1. Before the court today is an application seeking to have reinstated an application for leave to appeal orders made by Carter J in these proceedings on 17 February 2006. 

2. The substantive proceedings concern a s 79A application, seeking to set aside consent orders for property that were made by consent on 30 April 2004 on what I understand to be about the fifth day of the contested hearing at which each party was represented.

3. The wife, being dissatisfied with the outcome of that settlement, commenced proceedings to set the orders aside.  There were issues relating to that application that were dealt with by Joske J.  They were the subject of an examination by the Full Court relating to the manner in which Joske J ordered that the trial should take place, namely that as a preliminary issue, a determination should be made as to whether or not there was a ground existing under s 79A to set the order aside before embarking upon an investigation as to what order should be made if such a ground existed.

4. In the course of the proceedings an application was made to freeze some moneys that the wife was entitled to pursuant to the existing settled orders and an injunction was granted requiring her solicitors to hold those moneys in their trust account.  There was a sum slightly in excess of $200,000 involved.  The wife then sought to be relieved of the obligation to hold the moneys in her solicitor's trust account and at the same time, the husband brought an application for security for costs in relation to the s 79A application.  That resulted in Carter J making an order on 17 February 2006 that required the moneys to be held by the solicitors as security for costs and not released without prior written consent of the parties or order of the court.

5. The wife, aggrieved of that interlocutory decision, filed an application for leave to appeal.  She did so on the last possible date within time, namely 17 March 2006.  I made procedural orders on 2 June 2006 relating to the application for leave to appeal and those orders required, amongst other things, a pre-argument statement to be filed by 23 June 2006.  That was not done. 

6. On 10 July 2006 the s 79A application came on for substantive hearing before Benjamin J.  At the trial on 10 July 2006, the wife's solicitors indicated they were withdrawing from the proceedings as they were out of funds and they were given leave to withdraw, leaving the wife to contest the proceedings by herself, it being emphasised that she did not have the language skills, nor the legal skills to conduct the proceedings.  That left Benjamin J in the position of having little choice but to adjourn the proceedings.

7. By 18 July 2006, some eight days later, the wife's solicitors filed a fresh notice of address for service and they were back acting for her.  Three days later, the application for leave to appeal against the orders of Carter J was deemed to be abandoned by the failure of the wife to comply with procedural directions.  That matter has since, I am told, had a chequered history in relation to its process through the court, but has now been listed for trial on 5 February next year. 

8. The listing of the trial is a complicating issue because it involves the necessity to have an interstate judge try the action, as one of the witnesses in the case appears to be counsel who acted for the wife in the property hearings, whom it appears, it is suggested, may or may not have properly advised the wife in terms of reaching the settlement.  That issue will have to be explored presumably by the trial judge and because it involves Victorian counsel, everybody seems to agree that an interstate judge is appropriate to hear the matter.  So there is a significant logistical problem for the court and great expense to the Commonwealth to organise to have the matter heard and to fix the rosters of the court such as to be dislocating both as to Victorian litigants and to the litigants from the state where the judge will have to come from in making special arrangements for this case to be heard.

9. On 2 November 2006, some three and a half months after the appeal had been deemed to be abandoned, the wife's solicitors filed a fresh application asking that the leave to appeal application against Carter J be reinstated.  The explanation offered in relation to the circumstances that led to the abandonment is as follows.  It is set out in an affidavit of Issac Alexander Brott, the solicitor involved, who acts for the wife and has at all times relevant to these issues been acting for her in the s 79A application.

   7.I briefed counsel to prepare the pre-argument statement in the appeal.  I am informed by counsel that the pre-argument statement was prepared on the 23 June 2006 and was delivered to my office with explicit instructions that the said document had to be filed and served that day.  I have made enquiries of my office staff who did not have a recollection of the said document being delivered though that does not mean that they are denying it had been delivered.

   8.On or about 21 July 2006, pursuant to Rule 22.56, the Honourable Justice Kay ordered that the appeal be deemed to be abandoned for a failure to file the pre-argument statement pursuant to order 4 of the orders made on 2 June 2006.  The pre-argument statement had not been filed in the intervening period because counsel had been under the mistaken impression that the pre-argument statement had been filed and my staff were unaware of the document and the requirement to file the document.

   9.The current application had not been made earlier, because the final hearing of the matter had been listed on 10 July 2006, further applications were made in the interval and I was granted leave to cease to act in the trial, because there were no funds with which to pay the disbursements of the trial.  I have recently been reengaged to act in the matter but I have not been in a position to brief counsel in this matter until the wife had been able to refinance [a property].  I do not believe there will be any prejudice to the husband in having the appeal reinstated.

10. I should comment firstly that the appeal is not deemed to be abandoned by anything that I ordered but by operation of the relevant Rules of Court.  I should also comment that it appears that there is no explanation as to when the brief was delivered to counsel after the hearing at which the directions were made on 2 June 2006, nor is there any explanation at all of why it has taken from the time that Mr Brott went back on the record on 18 July 2006, until 2 November 2006 to bring this application insofar as it was thought appropriate.  I can understand that if the matter was to go to trial on 10 July 2006, there would have been little point in bringing the application if the trial was going ahead, but as the trial did not go ahead, there does not seem to be an explanation as to why it took from 10 July 2006, when it became apparent the trial was not going on, until now to bring the application.

11. It is now being brought with a new date for trial having been fixed for 5 February 2007.  It seems abundantly clear to me that if leave is granted to reinstate this matter, then it will inevitably lead to an application being made to seek to have the trial date abandoned and a new date set, which could be many months away.  There is provision for this application to be heard on the papers, but that may or may not be a likely event.  The earlier directions which I made required an oral argument of the application, so that could not be heard by the Full Court at any time that would comfortably coincide with a trial that would take place on 5 February 2007.  Inevitably there would be further delay in relation to the trial were the leave to appeal the interlocutory order relating to security for costs to be granted.

12. It is I think conceded by counsel for the applicant that he must demonstrate an adequate explanation for the delay and he must also demonstrate the substantive likelihood of a prospect of success in relation to the appeal, as well as being able to take steps which would effectively relieve the prejudice or hardship the husband may suffer as a result of the delay.  No suggestion was made that his instructing solicitor, who appears to be by his own admission, at fault in relation to the lapse of the requirements to comply with my earlier orders, should be obliged to meet costs.  The  submission of the wife’s counsel was that the husband's costs would have to be met - that is costs of this application - and that his own client should be the one responsible for meeting those costs, albeit that any delay that has taken place in the proceedings can hardly be visited to her feet.  Rather they appear to, by own admission, as I have indicated, to rest entirely with her solicitors in the proceedings.

13. Be that as it may, rule 22.57(2) sets out matters that I may consider in examining whether to reinstate an application that has been abandoned.  The rule actually applies to the appeal but I think it is apposite that it applies to an application for leave to appeal equally.  Indeed, there is a further hurdle in relation to the leave to appeal, namely that it would be required to show an error of principle or a substantial injustice before leave would be granted, and I can pay attention to the likelihood of that succeeding or at least there being matters of substance that can be argued in relation to those matters.

14. It needs to be remembered that this is leave to appeal against an application for security for costs.  Nothing substantive flows from it at this stage in that the costs order may never be made in favour of the husband in the event that the s 79A application is successful, and even if it is unsuccessful, the costs orders that may be made may or may not go to the amount held in the security and may or may not be required to draw upon the security if there are other competing claimants to draw upon the wife's bounty, namely her own solicitors.

15. At this stage, the mere making of the security for costs order does not appear to have had any substantive effect upon the outcome of proceedings or the passage of money from one party to the other.  It merely leaves frozen a fund which, in the event the costs order is made in favour of the husband, is a fund which could be utilised to meet the orders that were so made.

16. I am required by rule 22.57 to pay attention to, firstly, the main purpose of the rules as set out in rule 1.04, namely that:

    Each case is resolved in a just and timely manner at a cost to the parties and the court that is reasonable in the circumstances of the case.

17. The reinstatement of this application will effect the timeliness of the manner in which the substantive proceedings are dealt with; whether they will affect the justice is an issue that I am unable to determine. 

18. I am required to pay attention to whether the application has been made promptly and it clearly has not.  The application to reinstate could have been made at any time after the proceedings were deemed abandoned - that is, in mid-July 2006 - and it is now made in November 2006.  There is no evidence to suggest that the non-compliance was intentional but it certainly seems to be an oversight on behalf of the wife's solicitors.  Whether it was intentional, that is, as a tactic to further delay the proceedings, I am unable to make any comment upon. 

19. It seems clear that the non-compliance was caused by the wife’s solicitor's effective non-compliance and it has relieved him of the burden of having to defend an application for leave to appeal.  The effect of non-compliance on the wife has been to leave her without the remedy, if she had a remedy, that is, the remedy to argue that there had been an error of principle or substantial injustice which would give her leave to appeal from Carter J's orders.  But as I have indicated there is no substantive effect on her at this stage other than funds that would freely be available for her to be spent are not so freely available to her. 

20. The evidence indicates that she has herself refinanced another property which has enabled Mr Brott to come back into the proceedings.  The evidence also indicates that she sold a second property for some $335,000 in May 2006; no explanation is presently proffered as to where those funds have gone to. 

21. So in the circumstances, as I balance the issues that I have already outlined, it seems to me that it would be inappropriate to reinstate the application for leave to appeal, firstly, because of the delay; secondly, because I am not persuaded that there is likely to be any success in relation to the application if it was reinstated; thirdly, because of the matters which affect the proper conduct of the business of the court, including the proper conduct of the resolution of these proceedings and the effect that it would have on other parties to the court in dislocating the business of the court. 

22. In the circumstances, the application filed 2 November 2006 is dismissed.

23. I order that:

    (1)      The applicant wife pay $2500 towards the respondent husband's costs. 

    (2)      The application is otherwise dismissed.

    (3)The application in a case filed 2 November 2006 is struck out. 

I certify that the preceding twenty three (23) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Kay.

Associate: 

Date:  27 November 2006