GOLDSTEIN & GOYLE
[2012] FamCAFC 149
•11 September 2012
FAMILY COURT OF AUSTRALIA
| GOLDSTEIN & GOYLE | [2012] FamCAFC 149 |
| FAMILY LAW ─ APPEAL ─ COSTS JUDGMENT ─ Where the major thrust of the appellant’s challenge to the costs order with respect to the substantive property settlement proceedings related to his financial position, or asserted financial position ─ Where the finding of the learned Federal Magistrate in relation to the appellant’s financial position was as favourable to him as it could have been on the evidence in terms of his resistance to the respondent’s application for the costs of the property settlement proceedings ─ Where the appellant complained that the learned Federal Magistrate had failed to have regard to what he clearly submitted were the respondent’s greatly superior financial circumstances ─ Where having not challenged the property settlement decision, or demonstrated before the learned Federal Magistrate in the costs application, or before this Court pursuant to s 93A of the Act, by reliable evidence, that the respondent in fact had property of the order asserted by the appellant in addition to that which she received under the orders of the learned Federal Magistrate, this complaint cannot not succeed ─ Where the appellant relied upon offers of settlement which he asserted he had made ─ Where even if the appellant’s asserted offers of settlement were before the learned Federal Magistrate, they would not or should not have changed anything in relation to the exercise of his Honour’s discretion ─ No basis for appellate intervention demonstrated ─ Appeal dismissed ─ Costs of the appeal reserved. |
| Family Law Act 1975 (Cth) ss 4AA, 90SF(3), 93A, 117(2A) |
| Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 Kohan and Kohan (1993) FLC 92-340 |
| APPELLANT: | Mr Goldstein |
| RESPONDENT: | Ms Goyle |
| FILE NUMBER: | CAC | 1761 | of | 2009 |
| APPEAL NUMBER: | EA | 19 | of | 2012 |
| DATE DELIVERED: | 11 September 2012 |
| PLACE DELIVERED: | Dubbo |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Coleman J |
| HEARING DATE: | 27 August 2012 |
| LOWER COURT JURISDICTION: | Federal Magistrates Court |
| LOWER COURT JUDGMENT DATE: | 18 January 2012 |
| LOWER COURT MNC: | [2012] FMCAfam 26 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Self Represented |
| SOLICITOR FOR THE RESPONDENT: | Kennedy & Cooke Lawyers |
Orders
That the appeal be dismissed.
That the costs of the appeal be reserved.
That written submissions in support of any application for costs be filed and served within 28 days hereof.
That written submissions in opposition to any application for costs be filed and served within 28 days thereafter.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Goldstein & Goyle has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EA 19 of 2012
File Number: CAC 1761 of 2009
| Mr Goldstein |
Appellant
And
| Ms Goyle |
Respondent
REASONS FOR JUDGMENT
introduction
Pursuant to orders extending the time within which to do so, Mr Goldstein (“the appellant”) appealed against a costs order made against him by Federal Magistrate Scarlett on 18 January 2012.
The order of the learned Federal Magistrate provided that the appellant pay the costs of Ms Goyle (“the respondent”) from the date of the filing of her application in the substantive proceedings on 27 October 2009 until 17 November 2010 on a party and party basis, and on an indemnity basis from 18 November 2010 until the judgment of the court in proceedings for settlement of property pursuant to the de facto relationship provisions of the Family Law Act 1975 (Cth) (“the Act”) on 4 May 2011.
The appellant sought that both orders be set aside.
The respondent resisted the appellant’s challenge, and sought to maintain the orders of the learned Federal Magistrate.
The appellant appeared in person and concisely, frankly, and cogently articulated his challenges to the decision of the learned Federal Magistrate.
background
It is instructive to refer briefly to the reasons for judgment of the learned Federal Magistrate, first with respect to the costs decision which gave rise to the present appeal and, given that the costs decision was substantially informed by them, the orders made by the learned Federal Magistrate in the property settlement proceedings, and the reasons for such orders.
There is no doubt that the Court is entitled to refer to the reasons for judgment in relation to the costs orders, and indeed needs to in order to properly determine the appellant’s challenges to them.
Whilst the Court was probably entitled to have regard to the reasons for judgment of the learned Federal Magistrate in the earlier property settlement proceedings, as they have not been disturbed, or even challenged by way of appeal, and remain matters of record, the Court did not read those reasons without having first obtained the consent of the appellant to doing so.
As the transcript of the hearing would confirm, the Court endeavoured to explain to the appellant that, in the absence of reading the reasons for judgment in the property settlement proceedings, the Court was in a “vacuum” in assessing the merits of the appellant’s complaints with respect to the learned Federal Magistrate’s reasons for awarding costs against him. The Court also explained that the reasons for judgment in the property settlement proceedings may destroy any foundation for successfully agitating the appellant’s complaints with respect to the costs order.
As will be seen, the reasons for judgment in support of the property settlement decision do not assist the appellant’s challenges to the costs order. However, the appellant has not been disadvantaged by consenting to the Court reading those reasons. Without an appreciation of the reasons for the orders which were made in the property settlement proceedings, the Court could not begin to properly determine the merit or otherwise of the appellant’s challenges to the costs orders. Given the presumption that the decision at first instance was correct, and the reality that the appellant bears the onus of demonstrating appealable error, if the Court had not had regard to the reasons for judgment in the property settlement proceedings, the appellant’s appeal would have been doomed to certain failure.
The Reasons for Judgment in the Property Settlement Proceedings
It is convenient, and logical, to first refer to the reasons for judgment in the property settlement proceedings.
Whilst the Court does not criticise the appellant for not having attempted to do so, as the decision in the property settlement proceedings and reasons for it remain undisturbed, as the Court attempted to explain to him, the ability of the appellant to go behind findings recorded in those reasons is extremely limited.
The learned Federal Magistrate identified the competing applications, and recorded that the respondent, who was the applicant before him, sought an order for equal division of the property of the former de facto relationship of the parties.
The learned Federal Magistrate also recorded the relief sought by the appellant, which was essentially that:
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a)The applicant should transfer to the respondent all of her interest in properties at [Property L] [Q] and [Property B] [P], New South Wales;
b)The applicant and the respondent should discharge the mortgage over the [Q] and [P] properties to release the applicant from any liability in respect of the mortgages;
c)The applicant should be declared the sole owner of various chattels, including a … Chevrolet motor vehicle;
d)The applicant should resign from any office she held in the company [G] Pty Ltd;
e)The applicant should return a Jeep Commander motor vehicle to the respondent within 14 days; and
f)The parties would otherwise be solely entitled to all other property in their possession.
The learned Federal Magistrate found, it seems uncontroversially, that the parties had lived in a de facto relationship within the meaning of that term in s 4AA of the Act from about May 2002 to September 2009.
There were no children of the relationship, although children of a former relationship of the appellant lived with the parties during the latter stages of their cohabitation.
Under the heading “Submissions”, the learned Federal Magistrate recorded:
46. The respondent also said that the applicant had already received some assets from the relationship. She had already sold the horse “[A]” for $1500.00 and retained the proceeds. He produced a handwritten list of items which he said the applicant had already received. The list included the horse “[A]” with a sale price of $2500.00 beside it. The other items were:
a)A horse worth $8500.00;
b)A horse worth $900.00;
c)A horse worth $2500.00;
d)A new horse float worth $28,000.00 which the applicant sold for $23,000.00;
e)Another horse float worth $2,500.00;
f)Saddles and bridles worth $5,000.00; and
g)A [breed omitted] dog with a value of $2,500.00.
Having referred to the relevant legislative provisions, the learned Federal Magistrate then identified the property of the parties to the marriage. In a helpful table, at paragraph 64 of his reasons for judgment, the learned Federal Magistrate identified the non-superannuation assets of the parties, which he quantified at $602,500.00, and the superannuation entitlements of the parties which he quantified at $104,000.00. The total liabilities of $385,300.00 which the learned Federal Magistrate particularised were offset against those assets to produce a net asset pool, inclusive of superannuation interests, of $320,700.00.
When paragraph 46 is compared with the table of assets appearing at paragraph 64 of the learned Federal Magistrate’s reasons for judgment, it becomes apparent that none of the items asserted by the appellant to have been received or retained by the respondent was reflected in the asset pool found by the Federal Magistrate to have been proved.
Given that the total non-superannuation assets were found to total $602,500.00, had the appellant successfully persuaded the learned Federal Magistrate to include the items identified at paragraph 46, the asset pool would have been materially larger, by approximately $47,400.00.
The appellant seeks to have this issue assume some significance in the costs appeal. With respect to him, in the absence of any appeal against the learned Federal Magistrate’s failure to find that the respondent had property of the value, or substantially of the value asserted by the appellant before his Honour, and in the absence of evidence pursuant to s 93A of the Act establishing that reality, this Court cannot do, other than proceed on the basis that, having not been found to have had property of the magnitude asserted by the appellant in the property settlement proceedings, the respondent did not have such property.
With respect to the appellant, in the absence of more than a reiteration of his assertion that the respondent had received or retained the property asserted by the learned Federal Magistrate in the property settlement proceedings, as recorded in paragraph 46 of his Honour’s judgment, this Court cannot proceed on the basis that the respondent received or retained any of such property.
Moreover, given the nature of most of the property referred to by the appellant, even if it were open to find that the respondent did receive or retain all or the bulk of it, in the absence of reliable evidence of market valuation, of which there is none, so finding could not materially advance the appellant’s cause.
For reasons which he detailed, the learned Federal Magistrate concluded that the respondent’s contributions exceeded those of the appellant by 55 per cent to 45 per cent.
Pursuant to s 90SF(3) of the Act, the learned Federal Magistrate concluded that the contribution based entitlement of the appellant should be enhanced by 5 per cent, for reasons which his Honour articulated (see pars 83-92). An equal division of the property of the parties was thus determined to be appropriate by the learned Federal Magistrate. The learned Federal Magistrate identified how such equal division of property would be implemented.
Consistent with the orders which his Honour made, the former matrimonial home of the parties, valued at $550,000.00 and subject to an encumbrance of $340,000.00, was to be sold and the net proceeds of sale divided equally between the parties. It is readily apparent that, of the total assets of all kinds worth $320,700.00 net, of which the parties’ superannuation entitlements account for $104,000.00, the $210,000.00 equity of the parties in their former matrimonial home represented not only by far the most valuable asset of the relationship, but approximately two thirds of the totality of the net assets of the relationship.
On the hearing of the appellant’s appeal against the costs order, it emerged uncontroversially that the combination of the former matrimonial home being sold for less than $550,000.00, and the secured encumbrance over it significantly exceeding $340,000.00, resulted in the parties receiving little or no net funds upon the completion of its sale.
The learned Federal Magistrate’s orders provided that each party retain their respective superannuation entitlements, which were equal in the sum of $52,000.00.
The learned Federal Magistrate’s orders provided for various motor vehicles to be retained by the respondent whilst another motor vehicle and “horses and horse floats in her possession” and a dog were declared to be solely owned by the respondent.
A balanced reading of the learned Federal Magistrate’s reasons for judgment in the property settlement proceedings makes clear that:
(a)The learned Federal Magistrate was aware of the appellant’s allegations with respect to the items of property which he asserted that the respondent had received or retained after the parties separated, and the values which the appellant asserted with respect to each item of such property, which totalled approximately $47,400.00.
(b)The learned Federal Magistrate did not find that the respondent had received or retained such property or, to the extent that his Honour may have done so, did not find any values proved with respect to such property.
(c)To the extent that the respondent had a horse float, and/or horses, and/or a dog (assuming it to be the same dog as the appellant referred to), his Honour intended that the respondent retain such property.
Without suggesting that the learned Federal Magistrate did err, or may have erred, and without criticising the appellant for not having appealed against his Honour’s decision, if his Honour erred in not taking into account to the advantage of the appellant, any of the property which was identified in paragraph 46 of the reasons for judgment, there having been no appeal against his Honour’s conclusions in that regard, and no evidence before this Court demonstrating that such conclusions were erroneous, reliance upon the asserted receipt or retention of such property by the respondent cannot assist the appellant in his appeal against the costs order.
The Costs Judgment
The learned Federal Magistrate referred to the application of the respondent subsequent to the delivery of judgment in the property settlement proceedings seeking costs orders on the bases which his Honour ultimately ordered.
The basis of the respondent’s costs application was identified (paragraph 8), after which the learned Federal Magistrate recorded:
9.The only evidence relied on by the Respondent is a copy of an Order made by the Equity Division of the Supreme Court of New South Wales in proceedings [omitted] between Workers Compensation Nominal Insurer as Plaintiff and [G] Pty Ltd as Defendant, showing that the Defendant company was wound up by Order of the Supreme Court on 7th June 2011 and a Liquidator was appointed.
His Honour also recorded:
10.The Respondent also tendered into evidence without objection a bundle of correspondence, including a copy of a letter dated 12th October 2011 from a solicitor formerly acting for the Respondent, Mr Carlos Turini, addressed to the Applicant’s solicitors, advising that:
Mr [Goldstein] instructs the following:
1.That his business, [G] Pty Ltd, has entered into liquidation;
2.That his business is in debt of over $300,000; and
3.That the bank has repossessed the [W] property.
The bases of the respondent’s claim for costs were identified by the learned Federal Magistrate. They were an offer of settlement made by the respondent (par 12), and the reality that the present appellant had been “largely unsuccessful” in the property settlement proceedings (par 13).
The learned Federal Magistrate recorded the reliance of the respondent upon the present appellant’s conduct in the property settlement proceedings, including:
14.…
(a)his failure to attend court on three occasions;
(b)his failure to file and serve material when directed to do so by the Court; and
(c)his appearance on the final hearing, where he produced no material other than a list of debts that he claimed that were owed but failed to make any proper disclosure of his financial circumstances.
His Honour also recorded:
15.For the Respondent, Mr Cohen told the Court that the Respondent had been declared bankrupt. He conceded, however, that the Applicant had been successful in her claims.
Whilst in his submissions to this Court, both oral and written, the appellant contended that his financial position had further deteriorated since the decision in the property settlement proceedings, and that he was likely to be made bankrupt, the Court does not understand the appellant to assert that he actually is, or has been bankrupt.
The learned Federal Magistrate recorded that the financial circumstances of the present appellant “appear to be in a parlous state”. The Oxford Dictionary definition of “parlous” records: “full of danger or uncertainty; precarious”. As is not in doubt, a major thrust of the appellant’s challenge to the costs order made by the learned Federal Magistrate was that he is in very difficult, if not impossible, financial circumstances.
As the Court endeavored to explain to the appellant, short of finding that he was destitute, the learned Federal Magistrate’s finding in relation to the appellant’s financial position was probably as favorable to him as it could have been on the evidence for the purpose of his resistance to the respondent’s application for the costs of the property settlement proceedings.
The learned Federal Magistrate referred to the failure of the appellant to attend Court on a number of occasions:
20.The Respondent’s conduct in relation to the proceedings is a significant factor in persuading the Court that a costs order should be made against him. The records of the Court show that the Respondent did not attend Court on 7th December 2009, on 2nd August 2010, on 6th October or 26th October 2010.
The appellant asserted that, on a number of those occasions a solicitor retained by him had failed to appear, but appeared to acknowledge that the reasons for the appellant’s non-appearance were not matters for which the respondent was or could have been responsible, and were not matters which should disentitle the respondent to her costs of such occasions.
As the Court suggested to the appellant, if a solicitor properly retained to appear for him on those occasions failed to appear to represent the appellant’s interests, such part of any costs awarded against him as were referable to those occasions may well be liabilities in respect of which the appellant is entitled to be indemnified by the solicitor, but those are not matters about which this Court can speculate.
The learned Federal Magistrate relied upon the failure of the appellant to comply with directions of the Court of 6 August 2010, and to the appellant’s presentation of his case on 3 December 2010 when he was “unprepared and spent a considerable amount of time making submissions for which there was no basis in evidence”, by reason of which the learned Federal Magistrate concluded that the proceedings were “unnecessarily prolonged by the conduct of the respondent”.
Reference was then made to the offer of settlement made on behalf of the respondent, the terms of which were not specifically referred to by his Honour. That does not reflect critically upon his Honour. This Court does not have a copy of the offer of settlement.
It does not however seem to be suggested by the appellant that, whatever its terms, the respondent’s offer of settlement represented an outcome more favorable to the respondent than the learned Federal Magistrate’s decision provided for her.
The appellant complained to this Court that he too had made offers of settlement, but that the learned Federal Magistrate had not referred to them. Nothing to which this Court has been referred demonstrates that the offers of settlement which the appellant has placed before this Court were raised in the proceedings before the learned Federal Magistrate.
With respect to the appellant, having scrutinised the offers of settlement which he asserts that he made, raising those offers would not have materially altered matters in terms of the costs determination. The offers of settlement sought to be relied upon by the appellant do not demonstrate either that the respondent unreasonably refused to settle on any basis asserted by him or, that the learned Federal Magistrate’s decision provided a less favourable outcome for the respondent than any offer of settlement made by the appellant would have provided for her.
In the context of offers of settlement, the appellant relied upon a document exhibited to his affidavit in support of his application for an extension of time to appeal the decision of the learned Federal Magistrate. The document headed, “Heads of Agreement (Without Prejudice)”, and purportedly signed on 25 January 2010 by the appellant and the respondent provided for a settlement which included:
6.[Mr Goldstein] is to arrange for a re-financing of the current home loan and the debts of the Business to enable [Ms Goyle] to be released from any liabilities either directly or in any capacity as a guarantor.
This agreement is subject to each party confirming their taxation liabilities relevant to this settlement and to [Mr Goldstein] confirming his ability to re-finance liabilities and have [Ms Goyle] released as provided in point 6.
If this agreement cannot be concluded within 30 days of the date below, both [Ms Goyle] and [Mr Goldstein] request the Registrar to re-list the matter for directions and set another date for a conciliation conference.
As seems clear, the agreement was unable to be concluded within the period referred to in it. Moreover, whatever the agreement may have provided, if implemented at the time it was entered into, nothing to which this Court has been referred demonstrates either that the respondent resiled from the agreement, or that, if she did, the outcome of the property settlement proceedings should in some way have rendered her doing so significant in terms of her costs application.
As is not in doubt, and the authorities to which the learned Federal Magistrate referred in paragraph 28 in his reasons for judgment make clear, his Honour was exercising a discretion in relation to costs (see Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 and Kohan and Kohan (1993) FLC 92-340).
His Honour concluded that, until the offer of settlement of 17 November 2010 was made, costs should be awarded on a party and party basis but that, in the light of the findings which he had earlier recorded, costs on an indemnity basis were appropriate from the day after the making of that offer.
The Grounds of Appeal
The appellant’s grounds of appeal articulate a number of complaints, albeit, as will be seen, his Summary of Argument is rather more confined. In reality, the appellant’s challenges to the costs order really relate to his financial position, or asserted financial position. As is apparent from reading them, the submissions by the appellant were not the subject of evidence referred to by the learned Federal Magistrate in his judgment in the property settlement proceedings. It has not been demonstrated that those matters were the subject of evidence in the costs proceedings. Moreover, as the Court earlier noted, the finding of the learned Federal Magistrate in relation to the appellant’s finances was favourable to him.
As is not in doubt, pursuant to s 117(2A) of the Act, the learned Federal Magistrate was obliged to consider the financial circumstances of the parties. This his Honour clearly did in relation to the appellant. With respect to the appellant, as he appeared to come to acknowledge during the course of his submissions to this Court, the learned Federal Magistrate’s finding in relation to his finances was probably as favourable to the appellant as it could have been.
To the extent that the appellant complained that the learned Federal Magistrate had failed to have regard to what he clearly submitted were the respondent’s greatly superior financial circumstances, two observations are appropriate.
The first, as noted earlier, is that, the learned Federal Magistrate did not accept the contention of the appellant in the property settlement proceedings that the respondent had received or retained property to the value of approximately $47,400.00, and included no part of that sum in the inventory of the property of the parties.
Having not challenged that decision, or demonstrated before the learned Federal Magistrate in the costs application, or before this Court pursuant to s 93A of the Act, by reliable evidence, that the respondent in fact had property of the order asserted by the appellant in addition to that which she received under the orders of the learned Federal Magistrate, this complaint could not succeed.
The second observation, which has also been alluded to earlier, is that, of the net asset pool of $320,700.00 by reference to which the learned Federal Magistrate determined the property settlement proceedings, $210,000.00, being the equity in the former matrimonial home of the parties, has, it is common ground, subsequently ceased to be available. As is not in doubt, each party retained superannuation entitlements worth $52,000.00. The remaining property of the parties accordingly approximated $6,000.00 net.
Assuming, which has not been established, that the respondent got the whole of that property, it could not be successfully asserted by the appellant that her financial circumstances so exceeded his “parlous” financial circumstances as to vitiate the exercise of the learned Federal Magistrate’s discretion.
As is not in doubt, s 117(2A) requires the Court to take into account financial circumstances. So doing does not necessarily result in the discretion to award costs not being exercised in reliance upon the financial circumstances of the parties.
In his Summary of Argument the appellant submitted, with justification on the face of the documents to which he referred, that he was “struggling” to keep his business operating “in positive figures not running at a loss”.
The appellant asserted that he has “pre-separation with [Goyle] to current” debts in excess of $520,000.00, as the exhibit to which he referred (SMG13) to his affidavit revealed. The appellant also asserted that he had received a bankruptcy notice, as Exhibit SMG14 clearly is.
Whilst the appellant asserted that the liabilities particularised by him at SMG13 pre-dated the parties’ separation almost three years ago, both the quantum of the liabilities and their composition vary greatly from those found by the learned Federal Magistrate in his judgment in the proceedings for the settlement of property. How that has come about is unclear. In the absence of evidence establishing a nexus with the respondent, those are not matters which should operate to the respondent’s detriment in this appeal.
The appellant reiterated his assertion that the respondent had received a horse float which she had sold for $23,000.00. As explained earlier in these Reasons, there is no clear further evidence before this Court establishing that, as seems likely, if the respondent did retain a horse float, it was worth, or was sold for $23,000.00, or any other sum. In the absence of such evidence, this complaint cannot be advanced.
As also noted earlier, the appellant relied upon offers of settlement which he asserted he had made. Even if, which seems unlikely, these offers of settlement were before the learned Federal Magistrate, they would not or should not have changed anything in relation to the exercise of his Honour’s discretion. The evidence does not establish at present, or at the time the offers were made, that they were unreasonably refused by the respondent, or that the decision of the learned Federal Magistrate in the property settlement proceedings was less favourable to the respondent than the offers provided.
Regrettably, having not demonstrated the basis for appellate intervention, the appellant’s Notice of Appeal must be dismissed.
The Court is not unsympathetic to the appellant, whose financial circumstances appear to be rather more parlous than they were at the time the learned Federal Magistrate determined the proceedings for settlement of property. As was submitted by her learned Counsel however, given that the $210,000.00 anticipated equity in the former matrimonial home has been lost to both parties, and that the only valuable, if somewhat intangible property each retains is a superannuation interest, it ought not be thought that the Court accepts or imagines that the respondent, who has paid, or is liable to pay approximately $35,000.00 in legal fees, is in a position of financial affluence, or anything approaching it.
The orders will be that the appeal is dismissed, and that the costs of the appeal are reserved. Whilst the Court will not pre-empt the decision in that regard, there is much to be said for the respondent not sending “good money after bad” by pursuing her costs of the appeal.
I certify that the preceding sixty eight (68) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Coleman delivered on 11 September 2012.
Associate:
Date: 11.09.2012
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