Harper & Harper
[2016] FCCA 1603
•1 July 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| HARPER & HARPER | [2016] FCCA 1603 |
| Catchwords: FAMILY LAW – Practice & Procedure – application to set aside Orders pursuant to rule 16.05 of the Federal Circuit Court Rules 2001 – where the substantive proceedings relate to competing applications for property adjustment – where the respondent will incur a perceived if not real injustice if the proceedings are not reopened – application for change of venue – consideration of rule 8.01 of the Federal Circuit Court Rules 2001 – orders set aside. |
| Legislation: Federal Circuit Court Rules 2001, rr.4.03, 4.05, 8.01, 16.05, 22A.02 |
| Clifford & Mountford [2006] FMCAfam 450 Ras Behari Lal v The King-Emperor (1933) LR 60 Ind App 354 Prantage & Prantage [2013] FamCAFC 105 Arnold & Forsythe [2012] NSWCA 18 |
| Applicant: | MR HARPER |
| Respondent: | MS HARPER |
| File Number: | PAC 2904 of 2015 |
| Judgment of: | Judge Harman |
| Hearing date: | 9 June 2016 |
| Date of Last Submission: | 9 June 2016 |
| Delivered at: | Parramatta |
| Delivered on: | 1 July 2016 |
REPRESENTATION
| Solicitors for the Applicant: | Mr Frakes of Watts McCray Lawyers |
| Solicitors for the Respondent: | Mr Brandon of Evans & Company Family Lawyers |
ORDERS
The Orders made 21 March 2016 shall be set aside pursuant to rule 16.05 of the Federal Circuit Court Rules 2001.
Dismiss the Application for change of venue.
Each of the parties shall, within 28 days obtain, file and serve valuation evidence in admissible form as to the value of the property, Property P in the State of New South Wales, being all that parcel and certificate of title folio identifier (omitted).
In the event that the valuers retained by each party do not agree as to the value of the Property P property, then each of the parties shall forthwith do all things, sign all documents, do all things necessary and pay all fees necessary to cause those valuers to consult with each other, confer and produce a joint report setting out any agreed value arrived at following such consultation and, in the absence of agreement, setting out clearly the areas of controversy between them which have led them to offer different opinion as to the value of the property.
Each party shall do all acts and things, sign all documents and give all consents and authorities necessary to allow, permit and facilitate all necessary access to any valuer instructed by either party for the purpose of completing and providing valuation evidence or any conferral between the experts.
The wife shall, within 21 days, advise the husband in writing of all documents or classes of documents which she alleges have not been provided by the husband, and which are required by her to enable her to fully understand, address, examine and if necessary make further inquiry with respect to any allegation of fact made by the husband as raised in his affidavit or as may be suggested to be relevant to the proceedings and their determination.
Pursuant to Rules 14.06 and 24.04 of the Federal Circuit Court Rules and within 35 days the parties and each of them are to ensure that copies of the following documents are provided to all other parties, namely:
(a)Copies of income tax returns, assessment notices and BASs for the last 3 completed financial years for that party personally and for any entity in which that party has an interest (such as a private company, trust or partnership);
(b)An up to date statement with respect to any superannuation interest of that party together with a valuation of the fund if not an accumulation interest;
(c)Copies of bank statements for the period from the date of separation to date for any account in that party’s name (whether singularly or jointly with any other person or in trust) and in the name of any entity in which that party has an interest such as a private company, trust or partnership;
(d)Copies of credit card statements for the period from the date of separation to date for any account in that party’s name (whether singularly or jointly with any other person or in trust) and in the name of any entity in which that party has an interest;
(e)Market appraisals with respect to any parcel of real estate in which any party has an interest;
(f)Any document within the possession, custody or control of that party proving disproving or tending to prove or disprove any allegation contained in either party’s Financial Statement or Affidavit or which will be raised as an allegation of fact at hearing;
(g)Copies of market appraisals or computer site print outs as to value of:
(i)Any motor vehicle the value of which is not agreed.
Any document which is, at the date of this order, in the possession, custody or control of a party and which is not disclosed and a copy provided to the other party in accordance with the above order will not be admitted into evidence.
Vacate the mention 10 August 2016.
The matter is adjourned for further mention and directions to 12 October 2016 at 2:15pm.
IT IS NOTED that publication of this judgment under the pseudonym Harper & Harper is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PARRAMATTA |
PAC 2904 of 2015
| MR HARPER |
Applicant
And
| MS HARPER |
Respondent
REASONS FOR JUDGMENT
These proceedings relate to competing Applications for property adjustment.
The parties to the proceedings are a husband and wife, Mr Harper, the husband and Applicant in the substantive proceedings and the wife Ms Harper, the Respondent in the substantive proceedings.
The proceedings come before the Court on this occasion as a consequence of a request by the wife to reopen. That request is made by the wife pursuant to rule 16.05 of the Federal Circuit Court Rules 2001.
History of proceedings
There is no controversy as to the history of these proceedings.
On 18 June 2015, Mr Harper filed an Application Initiating Proceedings which sought Orders for property adjustment. On the same date, Mr Harper also filed an Application for Divorce.
The Application for Divorce came before a Sessional Registrar on 6 August 2015. The Divorce was not opposed and it was granted.
The substantive property adjustment proceedings came before the Court on 18 August 2015. Mr Harper appeared on that occasion and was legally represented. Ms Harper appeared by telephone. As at the date that the proceedings came before the Court, Ms Harper had not filed a Notice of Address for Service nor any other document.
At the first Court event the Court contacted Ms Harper, having obtained a telephone number for her from Mr Harper’s attorneys.
Service of Mr Harper's Application had occurred prior to the first return date of the proceedings. An Affidavit of Service was filed 27 July 2015 deposing to personal service upon Ms Harper on 7 July 2015, approximately one month after the date of filing of the Application.
While there was some slight delay in service of Ms Harper, upon which nothing turns, a sufficient period had passed since service to have permitted the filing of a Response and supporting material. The Federal Circuit Court Rules 2001[1] provide a period of 14 days from the date of service in which to file a Response and such other material as may be required by the rules. On that basis a Response was to have been filed by Ms Harper on or before 25 July 2015. As indicated, no such Response had been filed.
[1] Rule 4.03(3) of the Rules provides that, “A response must be filed and served within 14 days of service of the application to which it relates”. Rule 4.05 of the Rules requires an Affidavit and Statement of Financial Circumstances to be filed with the Response. Rule 22A.02 of the Rules requires that a Notice of Risk be filed if parenting relief is sought.
On 18 August, 2015 directions were made as to disclosure by each party. The terms of that Order were as follows:
Pursuant to Rules 14.06 and 24.04 of the Federal Circuit Court Rules 2001 and within 28 days, the parties and each of them are to ensure that copies of the following documents are provided to all other parties, namely:
a. Copies of income tax returns, assessment notices and BASs for the last 3 completed financial years for that party personally and for any entity in which that party has an interest (such as a private company, trust or partnership);
b. An up to date statement with respect to any superannuation interest of that party together with a valuation of the fund if not an accumulation interest;
c. Copies of bank statements for the period from the date of separation to date for any account in that party’s name (whether singularly or jointly with any other person or in trust) and in the name of any entity in which that party has an interest such as a private company, trust or partnership;
d. Copies of credit card statements for the period from the date of separation to date for any account in that party’s name (whether singularly or jointly with any other person or in trust) and in the name of any entity in which that party has an interest;
e. Market appraisals with respect to any parcel of real estate in which any party has an interest;
f. Any document proving or disproving or tending to prove or disprove any allegation contained in either parties Financial Statement or Affidavit and any document presently in existence and in the possession, custody or control of either party not exchanged in accordance with this Order will not be admitted into evidence;
g. Copies of market appraisals or computer site print outs as to value of:
i. Any motor vehicle the value of which is not agreed.
Of some importance with respect to the above Order is subparagraph (f) requiring that each party file and serve any document which would prove or tend to disprove any allegation of fact raised by either party in the material filed by them or, indeed, in the proceedings generally.
No specific complaint is made by Ms Harper that Mr Harper has failed to comply with that Order for disclosure, although a broad and non-specific complaint is made as to a failure to provide adequate disclosure. No complaint was raised by Mr Harper that Ms Harper has failed to give disclosure although, clearly, from a consideration of Mr Harper’s material, nothing was provided to him by Ms Harper.
The proceedings were next before the Court (the second Court event) on 7 December 2015. On that date, Mr Harper was legally represented. Ms Harper, again, appeared by telephone this time having made a request to appear by telephone.
Prior to 7 December 2015, correspondence had been received by Chambers wherein Ms Harper had sought an extension of time for the filing of her Response and other material. Initially, that request, made 15 September 2015, was referred back to Ms Harper by my Associate who highlighted the inappropriateness of communication with Chambers other than in accordance with Federal Circuit Court protocols for such communication.
Two days later, on 17 September 2015, communication involving both parties was received by Chambers and consent was provided by Mr Harper’s then attorneys to the extension sought. Thus, Ms Harper’s material was then to be filed by 2 October 2015.
At the Court event on 7 December 2015 there was, again, no material filed by Ms Harper. On that basis, a number of Orders were made including an Order for Costs. It is unclear from the material that is filed by the parties at this time whether that Order has been satisfied.
On 7 December 2015 a further Order was made with respect to disclosure. The Order was in the same terms as that previously made. The Order required that each party ensure that copies of certain documents, including any document in the possession, custody or control of that party which would prove or tend to disprove an allegation of fact, was to be served upon the other party by 5 February 2016. Again, neither party suggests that the Order has not been complied with, although one can infer from the position of the wife now agitated that some issue is raised by her. One might also infer that the repetition of the Order suggests an absence of disclosure by one or both parties as at 7 December 2015.
The Orders of 7 December 2015, importantly, included the following:
1. The matter is adjourned for further mention and directions and in the event of non-compliance with the following Order final undefended hearing to 21 March 2016 at 9.30 am.
2. The respondent shall file and serve a Response, Affidavit sufficient to comply with Federal Circuit Court Rules 2001 and Financial Statement by close of business 19 February 2016.
The matter then came before the Court on 21 March 2016 (the third Court event). On that date there was no appearance by or on behalf of Ms Harper. No Application to appear by telephone had been made.
It is unclear from the Bench Sheet produced that day whether any attempt was made to contact Ms Harper by telephone notwithstanding her failure to appear and the absence of any request by her to appear by telephone. It is the usual practice of my Court to make such attempts although, as indicated, the Bench Sheet does not confirm whether it occurred. Whether it did or not, it is clear that in the absence of Ms Harper and any material filed by her, the matter proceeded to a final and undefended hearing on the basis of the evidence presented by Mr Harper. Orders were made as sought by Mr Harper and which concluded the substantive property adjustment dispute between these parties.
The Orders made on 21 March 2016 included express reference to Ms Harper’s right to apply to reopen and be further heard pursuant to rule 16.05 of the Federal Circuit Court Rules 2001. Orders were made in the following terms:
9. IT IS NOTED that as these Orders are made in the absence of the Respondent the provisions of rule 16.05 of the Federal Circuit Court Rules 2001 apply such that the wife is entitled to reopen these proceedings.
10. Should the Respondent wish to apply to reopen the proceedings then she shall ensure that:
a. Any such request shall be made in writing, to my Chambers in accordance with Federal Circuit Court protocols by close of business 15 April 2016 and not otherwise;
b. Prior to making any such request Ms Harper shall ensure that she has filed and served a Response, Affidavit sufficient to comply with Federal Circuit Court Rules 2001 and Notice of Risk and in the event that such documents have not been filed contemporaneous with or prior to any request to reopen, the request for relisting will be refused.
Ms Harper, subsequent to the conclusion of the proceedings on 21 March 2016 and, presumably, being in receipt of the Orders made that day, contacted attorneys and provided instructions to them. To that end, Ms Harper gives clear evidence as to that which occurred.
Ms Harper contacted attorneys on 12 April 2016 and spoke with those attorneys on 13 April 2016. A request was then made, expeditiously, to relist the proceedings and reopen, that request, having been made in writing on 15 April 2016, being the last day upon which such leave could be utilised.
The proceedings were then relisted for 5 May 2016. Due to illness that date was vacated and the proceedings administratively adjourned to 24 May 2016. That date was also vacated due to illness and the matter further administratively adjourned until 9 June 2016.
On 9 June 2016, both parties appeared and were legally represented (Ms Harper’s attorneys appearing by telephone from Queensland). Brief oral submissions were made. Each of the legal representatives for the parties provided written submissions addressing the issue of reopening and it was agreed by the legal representatives for the parties that Judgment would be reserved and the matter determined on the basis of the written submissions provided and as augmented by the brief oral submissions made that day.
This Judgment is now delivered in determination of the action between these parties.
Material Relied Upon
In dealing with the proceedings today, I have read and considered each of the following documents.
In the case of Ms Harper, I have read and considered the following:
a)Her Response filed 18 April 2016;
b)Her Affidavit sworn or affirmed 15 April 2016, filed 18 April 2016;
c)Ms Harper's Statement of Financial Circumstances sworn or affirmed 15 April 2016, filed 18 April 2016;
d)A further Affidavit by Ms Harper sworn or affirmed 9 June 2016 and filed the same day. There is some controversy with respect to that Affidavit to which I shall return;
e)An Outline of Argument document, filed by Ms Harper’s attorneys 27 April 2016.
In the case of Mr Harper, I have read and considered the following documents:
a)His Initiating Application filed 18 June 2015;
b)Mr Harper's Affidavit sworn or affirmed 14 May 2015, filed 18 June 2015;
c)Mr Harper's Financial Statement sworn or affirmed 23 March 2015, filed 18 June 2015;
d)The Affidavit of Service filed 27 July 2015;
e)The Reply filed on behalf of Mr Harper 28 April 2016.
f)The husband’s Case Outline relied upon in the substantive proceedings;
g)The husband’s Case Outline 9 June 2016 relating specifically to rule 16.05 Application (together with submissions relating to interim and interlocutory Applications sought to be pressed by Ms Harper in the event that the proceedings are reopened).
Legal principles
The relevant legal principles for determination of the matter are, I am satisfied and as is submitted by Counsel for Ms Harper, set out in the erudite discussion undertaken by Jarrett FM (as he then was) in Clifford & Mountford [2006] FMCAfam 450.
I am indebted to my colleague who has spared me the onerous task of significant research. I incorporate the reasons of my colleague at paragraphs 7 to 34 inclusive:
7. Rule 16.05 is in the following terms:
16.05 Setting aside
(1) The Court may vary or set aside its judgment or order before it has been entered.
(2) The Court may vary or set aside its judgment or order after it has been entered if:
(a) the order is made in the absence of a party; or
(b) the order is obtained by fraud; or
(c) the order is interlocutory; or
(d) the order is an injunction or for the appointment of a receiver; or
(e) the order does not reflect the intention of the Court; or
(f) the party in whose favour the order is made consents.
(3) This rule does not affect the power of the Court to vary or terminate the operation of an order by a further order.
8. There are a number of decisions of this court upon applications under r.16.05(2)(a). Many decisions approach the relevant discretion on the basis that there are two matters to be considered. The first is whether there is an adequate or satisfactory explanation for the failure to appear. The second is whether the applicant demonstrates any reasonably arguable case on the merits of the substantive application[2].
[2] See for example MZWZC v MIMIA (No. 2) [2006] FMCA 228, SZFNB v MIMIA [2005] FMCA 1440, SZGDZ v MIMIA [2006] FMCA 604, MZWFZ v MIMIA [2005] FMCA 1479, SZCGQ v MIMIA [2005] FMCA 666.
9. Others approach the relevant discretion on the basis that in the absence of an adequate or satisfactory explanation for the failure to appear the relevant judgment should not be set aside[3].
[3] MZWRW v MIMIA [2005] FMCA 1493.
10. Others yet approach the matter on the basis that the discretion to set aside orders made in the absence of a party is an exceptional jurisdiction that should only be exercised with great caution or where "exceptional circumstances" can be demonstrated[4]. Invariably in those cases consideration is also given to whether there is some merit in the proposed claim or defence that is sought to be reinstated.
[4] NAJN v MIMIA [2003] FMCA 414, SZCEQ v MIMIA [2005] FMCA 1141, Morrison Motors Pty Ltd v Shah [2006] FMCA 256.
11. In Morrison Motors Pty Ltd v Shah [2006] FMCA 256, Barnes FM summarised the relevant principles as follows[5]:
[5] See also NAJN v MIMIA [2003] FMCA 414.
3. The respondent now seeks an order under Rule 16.05 of the Federal Magistrates Court Rules 2001 setting aside the orders of 9 February 2006. It emerged in submissions that the ground relied on is that the order was made in the absence of the respondent under Rule 16.05(2)(a). Rule 16.05 is, relevantly, in the same terms as Order 35 Rule 7 of the Federal Court Rules.
4. The power to set aside an order or judgment is to be exercised with great caution and generally is not to be done unless, where an applicant is relying on the fact that an order was made in his or her absence, the applicant can show that by accident and without fault on his or her part, the order was made without the applicant being heard: Autodesk v Dyason (No.2) (1993) 176 CLR 300 and Theo v Official Trustee in Bankruptcy [1998] FCA 862.
5. It is necessary to look at the whole of the relevant circumstances and to consider whether there is an adequate explanation for the non-appearance and also whether there is an arguable case or question raised by the person seeking to set aside the orders. It was said in K M & A Chadwick Pty Limited v Yeung (unreported Federal Court 2 June 1995) that the "relevant touchstone" was whether there was an arguable case or question raised by the party seeking to set aside the order.
12. In Autodesk v Dyason (No.2) (1993) 176 CLR 300 the High Court was asked to re-open an appeal that had been heard and determined by the Court[6]. It is clear from the judgments in that case that the Court was asked to exercise a power, not to be found in the rules of the High Court, but a power it inherently possessed, particularly as a Court of last resort, to re-open an appeal. Although Mason CJ and Deane J would have allowed the application, the majority (Brennan, Dawson and Gaudron JJ) found that there was no occasion to exercise the power available to the court to reopen an appeal. Two identifiable bases in principle were identified in the judgments that could, in an appropriate case, lead to a re-opening. The first was that a party had not been given an opportunity to be heard on a particular matter. The second was where "… a judgment has apparently miscarried for other reasons…"[7], such as the Court having proceeded to judgment on a misapprehension of the law or the facts.
[6] Autodesk v Dyason (1992) 173 CLR 330.
[7] Per Mason CJ at 302.
13. In Autodesk the judgments drew upon earlier decisions of the High Court, particularly those in Wentworth v Woollahra Municipal Council (1982) 149 CLR 672 and State Rail Authority of New South Wales v Codelfa Constructions Pty Ltd (1982) 150 CLR 29. In Codelfa Mason and Wilson JJ examined the power of the High Court to re-open an appeal in respect of which judgment has been pronounced in the following terms (at p39):
Counsel for the Authority referred the Court to many cases to establish the jurisdiction of the Court to entertain the present application. We have no doubt that such a jurisdiction exists: Rajunder Narain Rae v. Bijai Govind Sing (1839) II MooIndApp 181 (18 ER 269). See also Vienkata Narasimha Appa Row v. Court of Wards (1886) 11 AppCas 660 ; In re Harrison's Share Under a Settlement (1955) Ch 260 . Nevertheless, it is a power to be exercised with great caution. There may be little difficulty in a case where the orders have not been perfected and some mistake or misprision is disclosed. But in other cases it will be a case of weighing what would otherwise be irremediable injustice against the public interest in maintaining the finality of litigation. The circumstances that will justify a rehearing must be quite exceptional. In Rae's Case, Lord Brougham said, in words which the Authority claims are apposite to the present case (1839) II MooIndApp, at p 220 (18 ER, at p 284):
"It is impossible to doubt that the indulgence extended in such cases is mainly owing to the natural desire prevailing to prevent irremediable injustice being done by a Court of the last resort, where by some accident, without any blame, the party has not been heard, and an Order has been inadvertently made as if the party had been heard."
In Venkata's Case (1886) 11 App Cas, at pp 663-664 , Lord Watson, delivering the opinion of the Judicial Committee of the Privy Council, referred to Lord Brougham's words in Rae's Case and continued:
"Even before report, whilst the decision of the Board is not yet res judicata great caution has been observed in permitting the rehearing of appeals. In the last case to which we were referred, that of Hebbert v. Purchas (1871) L.R. 3 P.C. 664 where a litigant alleged, before report and approval, that he had been disabled by want of means from appearing and maintaining his case, the Lord Chancellor said:- 'Having carefully weighed the arguments, and considering the great public mischief which would arise on any doubt being thrown on the finalty "[sic]" of the decisions of the Judicial Committee, their Lordships are of opinion that expediency requires that the prayer of the petitions should not be acceded to, and that they should be refused.' There is a salutary maxim which ought to be observed by all Courts of last resort - Interest reipublicae ut sit finis litium. Its strict observance may occasionally entail hardship upon individual litigants, but the mischief arising from that source must be small in comparison with the great mischief which would necessarily result from doubt being thrown upon the finality of the decisions of such a tribunal as this."
14. It is apparent from an examination of the foregoing passages that the power the High Court was asked to exercise in AutoDesk was a power that it inherently possessed because of its position at the apex of the court hierarchy in Australia. Indeed, Mason CJ expressly acknowledged that proposition. After referring to three examples his Honour said, at 302:
These examples indicate that the public interest in the finality of litigation will not preclude the exceptional step of reviewing or rehearing an issue when a court has good reason to consider that, in its earlier judgment, it has proceeded on a misapprehension as to the facts or the law. As this Court is a final court of appeal, there is no reason for it to confine the exercise of its jurisdiction in a way that would inhibit its capacity to rectify what it perceives to be an apparent error arising from some miscarriage in its judgment.
(my emphasis)
15. Similarly in their Honour's joint judgment in Del v Director-General, NSW Department of Community Services (1997) 190 CLR 207 Toohey, Gaudron, McHugh, Gummow and Kirby JJ pointed out, at 215:
"The power of the Court to reopen its judgments or orders is in no doubt. The Court may do so if it is convinced that, in its earlier consideration of the point, it has proceeded "on a misapprehension as to the facts or the law, where "there is some matter calling for review", or where "the interests of justice so require. It has been repeatedly said that a heavy burden is cast upon the applicant for reopening to show that such exceptional course is required ‘without fault on his part’, ie without the attribution of neglect or default to the party seeking reopening. By such expressions of the power to reopen final orders, courts seek to recognise competing objectives of the law. On the one hand, there is the principle of finality of litigation which reinforces the respect that should be shown to orders, final on their face, addressed to the world at large and upon which conduct may be ordered reliant upon their binding authority. On the other hand, courts recognise that accidents and oversights can sometimes occur which, unrepaired, will occasion an injustice. In the case of a final court of appeal, such as this Court, that injustice may be irremediable, unless the Court itself, acting promptly, is persuaded to reopen its orders so as to afford relief in the exceptional circumstances of the case"
(my emphasis, footnotes omitted)
16. Despite some suggestions to the contrary[8] it is now probably the case that the principles discussed in the cases above only apply to the High Court. In DJL v The Central Authority (2000) 201 CLR 226 the issue before the Court was whether the Full Court of the Family Court had power to "re-open" an appeal that had been finalised by a perfected order. The High Court, by majority, determined that the Family Court had no power to re-open a final order after its entry. In doing so, Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ said at 247:
[8] Wentworth v Rogers (No. 9) (1987) 8 NSWLR 388 at 394; Haig v The Minister Administering the National Parks and Wildlife Act 1974 (1994) 85 LGERA 143; Australian Fisheries Management Authority v. P.W. Adams Pty Ltd (No.2) (1996) 66 FCR 349; WATI v MIMA (1997) 148 ALR 578.
Likewise, in the present litigation, clarity of thought and the isolation of the true issues have not been encouraged by submissions expressed in general terms respecting the position in "intermediate courts of appeal". In the case of each such court, State or federal, attention must be given to the text of the governing statutes and any express or implied powers to be seen therein. Nor is it of assistance to consider the position with respect to this Court in the exercise of its entrenched jurisdiction as a court of final appeal under s 73 of the Constitution, or with respect to the Privy Council or the House of Lords after R v Bow Street Metropolitan Stipendiary Magistrate; Ex parte Pinochet Ugarte (No 2), a decision referred to by the Solicitor-General of the Commonwealth.
We would add that the statement in De L v Director-General, NSW Department of Community Services [No 2] that the power of the High Court to re-open its judgments and orders is not in doubt should not be misconstrued. In that case and in all of the authorities respecting orders of this Court which were referred to in that passage, the applications were to re-open final orders and were made before entry of the orders in question. There is, as yet, no decision of this Court which turns upon the position after entry of its final orders.
The Family Law Act in its text and structure provides no express conferral of the power sought to be exercised in the present case. Nor is there an inherent power by reason of the description in the statute creating the court of it as "a superior court of record". Further, no such power is derived by necessary implication from the statutory structure, in particular from the exercise of the appellate jurisdiction conferred by Pt X of the Family Law Act.
(footnotes omitted)
17. In my view the principles that emerge from AutoDesk and De L are of no particular assistance when determining an application pursuant to r.16.05(2)(a). Each deals with the ability of the High Court to set aside orders previously made by it, in circumstances where it is the final arbiter on the issue at hand. The principles are not analogous to the principles to be applied on an application pursuant to r.16.05(2)(a).
18. Absent r.16.05(2)(a) there could be no question, I think, that this Court has implied power to set aside a judgment made by it in the absence of one of the parties to the judgment. In Taylor v Taylor (1979) 143 CLR 1 the High Court made it clear that notwithstanding that the Family Court was a court of limited statutory jurisdiction, it nonetheless had inherent power to set aside a judgment made by it in the absence of one of the parties. Mason J (as his Honour then was) described the relevant principle as follows at 16:
Although the Family Court is a court created by statute it none the less possesses an inherent jurisdiction to set aside a judgment obtained by default. Three members of this Court (Latham C.J., Rich and Williams JJ.) concluded in Cameron v. Cole that the Federal Court of Bankruptcy had an inherent jurisdiction to set aside its orders, notwithstanding that it was a statutory court and, further, that it was a court of limited jurisdiction. A jurisdiction to set aside its orders is inherent in every court unless displaced by statute. In my opinion the jurisdiction extends not only to the setting aside of judgments which have been obtained without service or notice to a party (Clifford v. Kanssen) but to the setting aside of a default or ex parte judgment obtained when the absence of the party is due to no fault on his part. I can find no indication in the Family Law Act of an intention to displace this inherent jurisdiction.
(footnotes omitted)
19. Although I was referred to no authority on the point, and I could find none myself, in my view, the discretion conferred by r.16.05(2)(a) is to be exercised on the same basis as the implied power described in Taylor v Taylor. That approach is consistent with the approach in Allesch v Maunz (2000) 203 CLR 172. Further, given that there is an express rule that provides power to set aside orders or judgments given in the absence of a party, there is probably no room for the operation of the inherent power spoken of in Taylor v Taylor[9].
[9] Cf. Allesch v Maunz (2000) 203 CLR 172 at 182.
20. In Allesch v Maunz the High Court had occasion to discuss the principle from Taylor v Taylor and the power of the Family Court to set aside property orders pursuant to s.79A(1)(a) of the Family Law Act 1975. In their Honour's view, s.79A(1)(a) was broad enough to permit the Court to set aside property orders where those orders were made in the absence of one of the parties and a "miscarriage of justice" had occurred. In the course of their judgment, Gaudron, McHugh, Gummow and Hayne JJ said, at 182 – 183:
The consideration which informs the power conferred by s 79A of the Act is that the court be satisfied that there was "a miscarriage of justice". And whether exercising inherent power or a power of the kind conferred by s 79A of the Act, a court will, ordinarily, be satisfied that there has been a miscarriage of justice if a person has suffered an adverse order in circumstances where his or her failure to appear is adequately explained unless it also appears that no different result would be reached on a rehearing or that a rehearing would work an irremediable injustice to the other side. In this last regard, it should be noted that injustice will often be capable of remedy by the imposition of terms as to costs. However, where, as here, orders have been carried into effect, injustice may not be capable of remedy except on terms that those orders stand and that the matter be reopened only to a limited extent.
21. Kirby J suggested that: "the considerations that inform a decision permitting, as here, repair of a "miscarriage of justice" are so many and varied that it is impossible to narrow them down to the "demands" of a single consideration unless it be that connoted by the very phrase used in the statute [conferring to power to set the judgment aside] itself"[10]. His Honour went on to point out[11]: "… it is desirable, as it seems to me, to treat the considerations applicable to such decisions conceptually and to classify them as impinging upon the two criteria that have for a very long time been viewed as critical to an affirmative decision to set aside a judicial order made in default of the appearance of a party. These are: (1) that an explanation, reasonable to the circumstances, is provided for the party's absence or other default; and (2) that the party in default has a material argument which, if heard and decided on its merits, might reasonably affect the determination of the rights and duties of the parties in a way different from that in the impugned order". Those remarks, and the passages that follow in his Honour's judgment, suggest that both criteria need to be made out before an applicant could expect a favourable exercise of discretion.
[10] At 188.
[11] At 188.
22. In Knight & Andrews [2004] FMCAfam 181 Baumann FM was confronted with an application to set aside an earlier order made by his Honour which dismissed the applicant’s substantive application for want of prosecution. In the course of his Honour’s reasons he said:
13. In my view, however, the mere fact that the husband did not appear is not sufficient to automatically set aside the order of 22 October 2001. Rule 16.05 is discretionary. A similar rule is found in Order 35 Rule 7(2)(a) of the Federal Court Rules 1979 (Cth). It was considered by RD Nicholson J in the case of Registrar of Aboriginal Corporations v Murnkuri Womens' Aboriginal Corporation (1995) 58 FCR 125.
14. Although that case involved a winding up order made in the absence of the party, the Court (after consideration of authorities relating to setting aside a default judgment and similar summary applications) found that even if the non appearance was explained the Court should still consider whether there is an arguable defence or action.
15. A similar situation was considered by Driver FM in Nadar v Australian Electoral Commission (2002) FMCA 83 who, although finding the applicant's explanation for non attendance was "neither sufficient or plausible" still turned his mind correctly in my view to whether the application "would have reasonable prospects of success" or whether the order for dismissal "caused injustice."
16. I agree that these factors should be considered before exercising the discretion contained in Rule 16.05.
23. In SZCEQ v MIMIA [2005] FMCA 1141 Nicholls FM was asked to set aside an order dismissing an application for review made in the absence of the applicant pursuant to r.16.05(2)(a). It was suggested to his Honour that there was a distinction to be drawn between the approach of Barnes FM in NAJN and a “lesser test which requires an "explanation" by the applicant for failure to attend, coupled with "showing [an] arguable case"[12].” In the result, his Honour was not satisfied that either test had been met and so the application to set aside was dismissed.
[12] SZCEQ v MIMIA [2005] FMCA 1141 at [10].
24. In S329 of 2003 v MIMIA [2006] FMCA 303 Baumann FM suggested that on an application under r.16.05(2)(a) the Court should consider at least:
a) The reasons for the failure to appear;
b) The prospects of success of the substantive application (in the context of an application that has been dismissed because the applicant failed to appear); and
c) Whether any prejudice to the respondent is likely to occur.
25. Rules similar to r.16.05(2)(a) exist within the rules of most courts in Australia[13]. The relevant Federal Court rules are O 32 r2(2) and O 35 r7(2)(a). The trend of authority in that Court[14] is to the effect that two matters are relevant, namely whether the applicant has an adequate explanation for the failure to appear and whether the applicant can show an arguable case on the merits (be that by way of claim or defence).
[13] For a list of the rules in each State and Territory Supreme Court see Cairns, B Australian Civil Procedure 6th ed Lawbook Co, Sydney, 2005.
[14] E.g. K M & A Chadwick Pty Limited v Yeung (unrep. Federal Court of Aust., Tamberlin J, 2 June 1995); Registrar of Aboriginal Corporations v Murnkuri Womens' Aboriginal Corporation (1995) 58 FCR 125.
26. Maher v Commonwealth Bank of Australia Limited [2004] FCA 248 suggests, however, that the matters identified by the High Court need not all be established for an applicant to obtain a favourable exercise of discretion. Mr Maher was both an applicant and cross-respondent in proceedings against the CBA. The matter was called for hearing and the Mr Maher failed to appear. His claim was dismissed. The cross-claim was stood over, but ultimately judgment on the cross-claim went against him. Finkelstein J. set out the principles as follows:
2. Mr Maher now applies for the judgments given on 2 and 5 February 2004 to be set aside. He also seeks an order that a new trial be granted. His application is opposed. In Evans v Bartlam [1937] AC 473, 482 Lord Russell said that a judge who was called upon to consider such an application (here it is brought under O 32 r 2(2)) must consider two issues, viz (1) whether there is some purpose in setting aside the judgment: there will be none if the claim sought to be prosecuted or defended (as the case may be) is hopeless; and (2) how it came about that the applicant was bound by a regularly obtained judgment. In the same case Lord Wright said (at 489) that the principal consideration was whether the applicant had a case with merits to which the court should pay heed. It did not matter that the case is weak because, as Winneke P explained in Lau v Citic Australia Commodity Trading Pty Ltd [1999] VSCA 34 at [8] "that is not to say that, when all the facts are exposed, it [in that case a defence] will not turn out to be a good one."
27. His Honour considered, however, that the more important of the two factors was whether the applicant might have an arguable claim against the bank or an arguable defence to the claim in respect of which judgment was given against him. His Honour said:
17 With this history in mind, I am in no doubt that Mr Maher made a deliberate decision not to attend the hearing on Monday 2 February 2004 in the expectation that the case would not go on in his absence and that he would thereby obtain the adjournment he was refused on the preceding Friday. I am convinced that Mr Maher intended to take whatever steps were necessary to defer the hearing while he continued his attempts to obtain pro bono counsel.
18 Moreover, I simply do not accept Mr Maher’s claim that he was physically unable to attend the hearing on 4 or 5 February 2004. The medical certificates are unconvincing. And, I suspect that Mr Maher did not obtain an affidavit from his doctor, or secure his attendance by subpoena, because the doctor’s evidence would not have assisted his cause.
19 Mr Maher’s cavalier attitude is inexcusable. There is no reason why a person who is hell-bent on delaying a proceeding in this way should be indulged. I suspect that if a new trial is ordered and Mr Maher still does not have counsel to assist him, he will renew his efforts to have the trial delayed. Tempted as I am to simply dismiss his motion out of hand, I accept that the more important consideration is to determine whether his own claim or his defence of the bank’s claim has any merit. If either has merit then it is best left to go to trial. Mr Maher can be suitably punished by an appropriate order in relation to costs, although even that may not put an end to his humbug.
28. His Honour concluded that Mr Maher’s claim against the bank might have had some merit, but his defence to the Bank’s claim did not. His Honour ordered that the judgment dismissing Mr Maher’s claim against the Bank be set aside (on certain conditions). The judgment on the counter-claim stood. Thus, notwithstanding the absence of one of the criteria, namely a reasonable explanation for the failure to appear, Mr Maher nonetheless received a favourable exercise of discretion.
29. Of the rules of the various Supreme Courts of the States and Territories, r.16.05(2)(a) is almost identical to rule 667[15] of the Uniform Civil Procedure Rules (Queensland) 1989 ("UCPR"). Both counsel referred me to the decision of Mackenzie J in J P Sproule v L E Long (2000) QSC 232. In that case Ms Sproule commenced proceedings for an order for sale of co-owned property pursuant to s.38 of the Property Law Act 1974 (Qld). Ms Long did not appear, but on the morning of the hearing she telephoned the registry and sent a letter by facsimile asking for the matter to be adjourned. The judge before whom the application was heard, knowing of the request for the adjournment, made the orders sought by Ms Sproule. She did, however, give Ms Long liberty to apply within seven days to set the orders aside if she so desired.
[15] 667 Setting aside
30. Mackenzie J had regard to Wilkinson v Wilkinson (1963) P 1 and the determination in that case that “absence” meant physical absence from the relevant hearing. His Honour considered that there was no real explanation for Ms Long's delay in applying to set the orders aside under the liberty to all provision, but ultimately he determined that the application should be dealt with under that reservation rather than the UCPR 667.
31. Shocked v Goldschmidt [1998] 1 All ER 372 is a case decided by the Court of Appeal, Civil Division (Leggatt, Roch and Morritt LJJ).
In that case the plaintiffs’ suffered judgment upon a counter-claim made against them because they did not appear on the days fixed for hearing of the counter-claim. Subsequently, they applied to have the judgment set aside. At first instance, they succeeded, but the defendant (who had the benefit of the judgment on the counter-claim) appealed. The judgment of the Court of Appeal was delivered by Leggatt LJ. Roch and Morritt LJJ agreed. In the course of his Lordship’s judgment, he pointed out the following, at 377:
The cases about setting aside judgments fall into two main categories: (a) those in which judgment is given in default of appearance or pleadings or discovery, and (b) those in which judgment is given after a trial, albeit in the absence of the party who later applies to set it aside. Different considerations apply to these two categories because in the second, unless deprived of the opportunity by mistake or accident or without fault on his part, the absent party has deliberately elected not to appear, and adjudication on the merits has thereupon followed.
32. His Lordship then considered a number of cases, some of which dealt with applications to set aside judgments in default of appearance and others which dealt with applications to set aside judgments in the absence of a party at trial. His Honour then continued, at 381:
These authorities about setting aside judgments after a trial indicate that each case depends on its own facts and that the weight to be accorded to the relevant factors will alter accordingly. But from them I derive the following propositions or 'general indications' as Lord Wright might have called them. (1) Where a party with notice of proceedings has disregarded the opportunity of appearing at and participating in the trial, he will normally be bound by the decision. (2) Where judgment has been given after a trial it is the explanation for the absence of the absent party that is most important: unless the absence was not deliberate but was due accident or mistake, the court will be unlikely to allow a rehearing. (3) Where the setting aside of judgment would entail a complete retrial on matters of fact which have already being investigated by the court the application will not be granted unless there are very strong reasons for doing so. (4) The court will not consider setting aside judgment regularly obtained unless the party applying enjoys real prospects of success. (5) Delay in applying to set aside is relevant, particularly if during the period of delay the successful party has acted on the judgment, or third parties have acquired rights by reference to it. (6) In considering justice between parties, the conduct of the person applying to set aside the judgment has to be considered: where he has failed to comply with orders of the court, the court will be less ready to exercise its discretion in his favour. (7) A material consideration is whether the successful party would be prejudiced by the judgment being set aside, especially if he cannot be protected against the financial consequences. (8) There is a public interest in there being an end to litigation and in not having the time of the court occupied by two trials, particularly if neither is short.
Contrasting the cases in the two categories it seems to me that whereas in the first the court is primarily concerned to see whether there is a defence on the merits, in the second the predominant consideration is the reason why the party against whom judgment was given absented himself.
33. The distinction referred to by his Lordship has little relevance to this Court. The Federal Magistrates Court Rules 2001 does not provide for a respondent to enter an appearance, and makes no provision for a judgment in default of an entry of appearance in the traditional sense[16]. An application, when filed, is fixed with a first court date. At that first court date, the Court may make such directions as it thinks appropriate[17]. It may also hear and determine the all or part of the proceedings[18]. A respondent is not required to appear in the sense of filing a formal notice of appearance. The Federal Magistrates Court Rules 2001 simply requires a response and an affidavit[19].
34. From the abovementioned authorities, it seems to me that the following principles emerge in respect of applications under r.16.05(2)(a):
a) The discretion to be exercised is unfettered, but nonetheless to be exercised judicially and bearing in mind the public interest in there being an end to litigation.
b) There are three criteria, each of which should usually be demonstrated before a judgment or order is set aside under r.16.05(2)(a), namely:
i) a reasonable explanation for the applicant's absence at the trial or hearing;
ii) material arguments available to the applicant that might reasonably lead to the making of an order different to that sought to be set aside; and
iii) no prejudice to the party with the benefit of the orders sought to be set aside that is not able to be adequately addressed by the Court.
[16] See for example Evans v Bartlam [1937] AC 473.
[17] FMCR 10.01(3).
[18] FMCR 10.01(2), see also FMCR 13.03A.
[19] FMCR 4.03, 4.04 and 4.05.
c) Matters relevant to the three criteria set out above will include, but will not necessarily be limited to:
i) Whether a party with notice of proceedings disregarded the opportunity of appearing at and participating in the trial;
ii) Delay, if any, in bringing the application to set aside and whether, if during the period of delay the successful party has acted on the judgment, or third parties have acquired rights by reference to it;
iii) the conduct of the applicant since the judgment or order sought to be set aside was made.
In addition to the above, one might conveniently summarise that which is so extensively discussed in the above passages by reference to Northey v Bega Valley Shire Council [2012] NSWCA 28 establishing, clearly, the principle that, “[mere absence] of itself, is insufficient to justify setting aside an order. There must be some added factor that makes it unjust for the order to stand”.
I am also conscious in adopting that which is opined by my colleague, Judge Jarrett, that his erudite summary of relevant principles was accepted as accurate and relied upon the by the Full Court in Barbey & Tuttle [2013] FamCAFC 44 and accordingly, by such adoption, creates binding principle applicable generally within the Court.
To the extent that the above discussion includes reference to a number of High Court of Australia decisions (principally, Aon Risk Services & Australian National University [2009] HCA 27 and Allesch v Maunz) as to the need for the Court to efficiently use its own resources and bring a conclusion to litigation, I am conscious of that opined by Lord Atkin in Ras Behari Lal v The King-Emperor (1933) LR 60 Ind App 354 (and quoted with approval by the High Court of Australia in Smith v Western Australia [2014] HCA 3, “Finality is a good thing but justice is better”.
Indeed, that passage taken with Northey v Bega Valley Shire Council would, to my mind, succinctly summarise that which I must address.
As Judge Jarrett has opined, there are three substantial matters which I should turn my mind to in addressing this Application to reopen. They are not fixed criteria and other matters besides those referred to might well be considered. However, for the sake of convenience, if nothing else, I will focus upon and individually address each of these three factors being:
a)There must be an explanation for the Applicant’s absence at the hearing which is reasonable;
b)The material before the Court – (I am satisfied in this regard that as the Application is essentially interlocutory in nature that I should treat the evidence of each party as more probably correct than not and noting that such evidence is led without cross-examination). The Applicant must demonstrate that there is “a material argument” available which might lead to the making of a different Order;
c)That there is no prejudice to the party who has received the benefit of Orders as a consequence of the determination in the absence of the Applicant.
Explanation for non-attendance
There are a number of bases advanced by Ms Harper in support of her position. Principally, as regards her non-attendance, Ms Harper relies upon matters relating to her health. I will deal with those issues separately, particularly as they relate to the controversy which arises as regards the second Affidavit of Ms Harper, being that sworn or affirmed 9 June 2016. Objection is taken to that Affidavit to the extent that it annexes a number of documents authored by third parties who are not deponents of evidence in these proceedings.
Objection is taken to a number of documents (essentially Ms Harper’s medical records) annexed to Ms Harper’s material on the basis that the documents annexed are not Ms Harper’s. The records are documents of third parties. They are business records. Ms Harper could have proceeded to obtain the documents under subpoena and then tender them as business records. I am satisfied the records are properly admissible as business records.[20] The admission of those records proves their existence rather than the accuracy of contents of those records.
[20] See section 69 Evidence Act 1995.
The medical records are of some importance to Ms Harper’s position and warrant and require some consideration.
The first document, annexure A to Ms Harper's Affidavit and being a medical certificate under the hand of Dr R dated 10 May 2016, certifies that Ms Harper was assessed by the good doctor on that date and, in the opinion of the good doctor, Ms Harper was, at that time, suffering “a Major Depressive Episode, Moderate, reactive to multiple factors”. The report then goes on to list the factors suggested to have impacted upon or led to the episode of a major depressive disorder.
The objection that is taken to the documents is principally that portion of the document which repeats that which Ms Harper has related to the medical practitioner and cannot be tested at this time. On the face of the document, the good doctor is qualified to offer the diagnosis advanced[21] and I accept that diagnosis for present purposes this being an interlocutory determination.
[21] See section 79 Evidence Act 1995.
Whilst I accept that issue is taken by Mr Harper with that related by Ms Harper to her doctor, I am conscious that the basis for the diagnosis offered remains of some importance. That is not to suggest that the Court can, or does, make any finding of fact as regards that alleged by Ms Harper or related by her to Dr R.
In addition to the proffered diagnosis, Dr R suggests that Ms Harper’s mood had deteriorated to its current diagnosed point “since that time in December”. Dr R identifies the various events that were related to her by Ms Harper and suggested to have occurred in or prior to December.
It is important to note that Ms Harper had participated in these proceedings on two of the three occasions that the matter was listed before the Court. Ms Harper had participated in the first Court event. Ms Harper had participated in the second Court event in December 2015, the time at which Ms Harper suggests and suggested to Dr R her emotional if not mental health began to deteriorate.
At the second Court event Ms Harper had not filed material and, as a consequence, an Order for Costs was made against her. However, Ms Harper’s participation, to the extent of her appearance by telephone, cannot be questioned. In those circumstances, it would appear, and I am satisfied that it should be accepted as such, that Ms Harper, as a consequence of her deteriorating emotional or mental health at and following that Court event, may well have then been impeded from further participation post-December 2015. Dr R certainly offers as part of her diagnosis that it was so.
I am also conscious (and it is not an issue in dispute in the proceedings) that there are three children of this relationship, all of whom reside with Ms Harper and have done so since the separation of these parties in June 2013. Ms Harper resides with those children in Queensland and Mr Harper resides in Sydney.
There is no controversy (it being consistent with Ms Harper’s evidence as well as that led by Mr Harper) that Ms Harper’s care of those children is substantial and verging upon complete. Mr Harper spends time with those children on a few occasions per year. Ms Harper goes further to suggest that the relationship between those children and each of them and their father is somewhat estranged. That controversy need not be determined by me. It is sufficient to note that Ms Harper has the very substantial care of these children.
The second document annexed, also under the hand of Dr R, is a GP mental health care plan. That document suggests that medication was prescribed for Ms Harper on 28 December 2015 relating to menopause. Further medication was prescribed for Ms Harper on the date of consultation, 10 May 2016, being a drug commonly prescribed for treatment of depression, thus there is some internal corroboration of that alleged by Ms Harper and especially that diagnosed by Dr R.
The mental health care plan sets out far more details as to the basis of the diagnosis than the previous document. The mental health care plan sets out the suggested treatment regime.
Again, objection is taken to the document and especially to reliance upon that related to Dr R by Ms Harper. However, challenge to that related by Ms Harper does not undermine the diagnosis made and advised by Dr R. The good doctor’s diagnosis is based upon the examination and direct observation and clinical experience and not purely that related by Ms Harper.
These are interlocutory proceedings and I am entitled to accept Ms Harper’s evidence on its face as more probably correct than not. That related by Ms Harper gives context to the diagnosis advanced by Dr R. That alleged by Ms Harper to Dr R is also the subject of direct evidence within her Affidavit material. That evidence is consistent with that which Ms Harper related to Dr R. On that basis, I am satisfied that, at least as regards Ms Harper’s direct evidence, I can accept her evidence for present purposes. I also accept Dr R’s evidence of diagnosis.
Ms Harper sets out that she has experienced a number of stressors post separation and these have been particularly prominent since the Application for Divorce (and Application for substantive relief) was served upon her. These stressors are suggested to include:
a)Ms Harper alleges that whilst she had, until that time or proximate thereto, been working within the business which Mr Harper continues to operate, being a business, “(business omitted)”;
b)Ms Harper alleges that she was, post separation, caring for Mr Harper’s elderly father who had been residing with the parties prior to separation;
c)Ms Harper alleges that she was left without a motor vehicle (that being transferred into Mr Harper’s possession) and which caused significant difficulties for her in conveying and transporting herself and the three children. That would not appear an issue in dispute as Mr Harper’s material and, indeed, the Orders that were made by the Court, deal with retention and ownership of the very vehicle to which Ms Harper refers;
d)Ms Harper alleges that at, or shortly after, being served with initiating process in these proceedings that Mr Harper’s financial assistance and Child Support dramatically changed. That is entirely consistent with Mr Harper’s evidence;
e)Ms Harper alleges that, until the latter part of 2015, she had no income, save that derived by her from working as a (occupation omitted) for 15 hours per week. As a consequence of financial strains, contributed to by the above, Ms Harper increased her work hours significantly to then work 12 hours per day. Those hours of employment were in addition to her duties and responsibilities as a parent with responsibility for the care of the three children of the marriage;
f)Ms Harper alleges that following these changes, that she began to experience generalised ill health such as mild infections, sore throats and the like. She associates this deterioration in her health to stress. Certainly, the mental health care plan indicates a further prescription provided to Ms Harper on 3 January 2016 for the treatment of cold sores. That prescription is certainly consistent with that alleged by Ms Harper as to the health issues she faced;
g)Ms Harper alleges that shortly prior to Christmas 2015 (slightly post-dating Ms Harper’s last participation in the proceedings) that “her mood deteriorated” and that she has not worked since that time as she was not coping well. The difficulties which Ms Harper alleges that she faced at that time included lack of sleep and a general malaise. It is described by Ms Harper (and corroborated within the metal health care plan) that from late 2015 she began to find it difficult to get out of bed, had lost motivation and found significant difficulty in undertaking simple tasks. In the mental health care plan Ms Harper is reported as describing, “had a pile of paperwork and forms to complete for Court, and many times pulled them out, sat down to start, but couldn’t start or concentrate; felt overwhelming, so emotionally gave up”.
The third document annexed to Ms Harper's Affidavit (annexure B) is a brief letter from a clinical psychologist, Ms M, dated 25 May 2016. That document (addressed “to whom it may concern” and thus clearly open to challenge as not being a business record) does not take the matter a great deal further. That is in no way a criticism of Ms M. It is simply a reflection of the contents of the brief document which I accept is provided by Ms M for Ms Harper’s assistance. It is entirely consistent with Ms Harper’s evidence and with the diagnosis of Dr R.
The final document annexed to Ms Harper’s latter Affidavit (annexure C) is an email 30 May 2016 advising Ms Harper of her “eviction” from the premises she was then occupying. The basis for that notice being issued is stated as non-payment of rent.
The evidence of Mr Harper prior to the hearing of the substantive proceedings was that he was attending to payment of Ms Harper’s rent. The Case Outline document provided by the husband at hearing repeated that allegation stating that he was paying the wife’s rent, the school fees for each of the children and, in addition, a sum of $60 per week per child (an amount which had reduced from that previously paid). It would thus appear that shortly after the conclusion of the substantive proceedings that the payment by Mr Harper of Ms Harper’s rent (one of the facts advanced by him and relied upon, particularly in support of the submission as set out in that Case Outline document that there need not be any adjustment in favour of Ms Harper pursuant to section 75(2) of the Family Law Act 1975) would appear to have ceased.
Ms Harper’s principle Affidavit, that sworn or affirmed by her 15 April 2016, refers to the above matters. It could not be suggested that Ms Harper has failed to address the issue at all.
I accept that Ms Harper’s health was a reasonable excuse for both her non-attendance and failure to file material.
Ms Harper’s health is not the only basis upon which she suggests that a reasonable excuse for her non-attendance and non-filing of a Response and other documents should be found.
It is advanced on behalf of Ms Harper that she simply could not complete the forms. The argument advanced, in that sense, is substantially on the basis of Ms Harper’s self-representation. I do not accept that submission as regards self-representation.
Whether a party is legally represented or not does not impact upon their obligation to fully and properly engage in proceedings and do that which is required of them. Self-representation certainly makes the discharge of those duties far more onerous and far more difficult. They are duties which, historically have been discharged by legal representatives for parties upon the instruction of parties rather than by self-represented litigants. Our systems and processes have developed over a significant period, some centuries, on the basis of competent representation of those who appear before the Court. However, whilst that representation is desirable, it cannot be compelled and it is a matter for parties to obtain representation subject to their desire, means and resources.
I accept that advanced by Ms Harper that she was not in a position to fund legal representation or obtain legal assistance or advice. That is regrettable as the legal process is difficult to navigate, regrettably all the more so for those who are not represented. The processes of the Federal Circuit Court of Australia are, perhaps, less formal and “simpler” than some Courts. However, I accept that to sit down and complete documentation for a legal process in which the completer of that material as a self-represented litigant, has an inherent and subjective interest in the outcome of the proceedings, is a daunting task. It is not however, an excuse or reasonable explanation for failure to file material or participate in proceedings. There is perhaps a world of difference between that which is explicable and that which is acceptable or reasonable.
That the completion of documents is difficult if not daunting to complete I entirely accept. However, if a person is self-represented, whether through choice or otherwise, it is a burden which they regrettably inherit. The rules of evidence and the rules of process and procedure apply equally to all parties before the Court. To do otherwise would deny due process to those who were represented.
That argument by and of itself, that Ms Harper was not represented in the proceedings, does not find favour. That is particularly so as a number of extensions were granted. Material should have been filed by Ms Harper within 14 days of service and it was not. On the first return date of the proceedings a direction for filing was made. An extension was ultimately granted by consent. A further Order was made on the second occasion that the matter was before the Court again extending time for compliance. Indeed, those Orders went so far as to make clear the consequence of failure to file material and participate, being the final undefended hearing in the proceedings that which ultimately occurred.
The argument as to self-representation as a basis for explanation of delay and non-participation is not accepted on its own. However, when the health issues that are raised by Ms Harper are added to that mix, I do accept that Ms Harper, in her particular circumstances, had a reasonable explanation for both her failure to complete and file material and her failure to appear.
I accept that offered and diagnosed by Dr R that Ms Harper was, at the date of consultation and that Ms Harper had been since December 2015, suffering from a depressive disorder. It is not clear from the material whether it is suggested that the depressive disorder from which Ms Harper suffered was so debilitating as to have rendered her incompetent in a legal sense. One can infer that it is not so at least at the present as no Application is made for the appointment of a Case Guardian. I accept that Ms Harper’s attorneys are satisfied that Ms Harper is competent to provide instruction and does so.
The health difficulties that Ms Harper has suffered, irrespective of the stressors and triggers of her depressive disorder are, I am satisfied, a reasonable explanation for her failure to comply with directions for filing and her attendance at the hearing of the matter 21 March 2016 (the Court event having become a hearing on an undefended basis as a consequence of Ms Harper’s failure to file material).
Finally, an argument is put that Ms Harper had not attended the hearing as the proceedings had been commenced by the husband in the Parramatta Registry and Ms Harper, resident in Queensland, could not afford to travel to Parramatta. That submission, again, is rejected.
Ms Harper did not need to travel to Parramatta for the Court event of 21 March 2016. It was perfectly open to Ms Harper to make Application to appear by telephone as she had on the prior occasion. I accept, however, that the failure to make that Application to appear by telephone or to appear in any form arose as a consequence of the depressive disorder with which Ms Harper was then afflicted.
Is there a material argument available to the applicant that might reasonably lead to the making of an order different to that sought to be set aside
This factor is perhaps the most significant in relation to this determination.
The Case Outline document filed by Mr Harper's Counsel prior to the undefended hearing 21 March 2016 annexed a Balance Sheet. The Balance Sheet suggests that the parties are in a negative financial position. The financial circumstances of the marriage between these parties are tragic. The financial history of the marriage is not addressed in any detail by Ms Harper and it is addressed only briefly by Mr Harper.
Mr Harper's Affidavit 14 May 2015 (accepting that contained within it is more probably correct than not and having been accepted as accurate at the date of undefended hearing 21 March 2016, that material being unchallenged after adequate opportunity to challenge) suggests that these parties had, in past times, done well financially.
Mr Harper deposes that, in the early 2000s a waterfront property at Property B on the (omitted) had been purchased, albeit largely financed by mortgage. The parties had purchased a number of other properties, motor vehicles and other assets. They conducted their business. They were living a perfectly comfortable, middle-class life with a relatively high standard of living.
The parties (or as the husband alleges, the wife alone) then began to engage in share trading as a means of wealth creation. Mr Harper deals with this at paragraph 14 of his Affidavit. Mr Harper asserts that the enterprise, if it might be so described, was undertaken solely by Ms Harper. He describes that:
The Respondent drew over $1,000,000 from equity from our properties and lost all this this money and de valuation of shares. I cashed in both superannuation to pay the mortgage on the home. The Respondent wasted the equity we spent 30 years on building on highly leveraged share trading in very dangerous points in the market. Our losses had exceeded $1,000,000. She borrowed from my aunty $240,000.00 … she lost the $240,000 in share trading.
There are a number of areas of controversy with respect to Mr Harper’s evidence. For the purpose of the Orders made at undefended hearing, the above was not accepted as a wastage argument. Separate reasons were delivered with respect to that determination. However, the simple reality that the assets of the parties were substantially lessened as a consequence of that share trading, thus leaving the parties in potentially a negative asset position, was accepted.
The nett consequence of the share trading losses (and Mr Harper would not appear to suggest that he was unaware of the share trading, simply that he decries all responsibility for its consequence) was the present financial position of these parties with little if anything to show for their many, many years of hard work.
Mr Harper goes on to give evidence that the waterfront property at Property B was sold by the mortgagee and a significant shortfall arose on sale. A debt of $200,000 was rolled over to the one remaining parcel of real estate, the factory unit at Property P in Sydney.[22] Mr Harper operates his business from that factory unit. There is controversy between the parties as to its value. If Mr Harper’s evidence is accepted, as it was for the purpose of the undefended hearing that evidence being unchallenged, then these parties are, indeed, in a negative asset position.
[22] At hearing Ms Harper was the sole registered proprietor of that property. The arrangement, if any, between Mr Harper (or the business operated by him from those premises) and the wife as registered proprietor of the property is not known. It is unclear whether rent was paid and addressed for Income Tax purposes and the like and these may be areas relating to Ms Harper’s broad complaint of inadequate disclosure.
The wife asserts that she has a material argument available which might lead to a different outcome as a consequence of a number of submissions. I will deal with each of them separately.
This is a complex financial matter
It is submitted by Counsel for Ms Harper that these proceedings involve some significant degree of complexity. That would appear to be asserted on the basis that, “there has been a significant reduction in capital wealth of this family”. The submission goes on to assert, “the husband contends debts due to unsecured relations. The husband raises squarely a wastage argument against the wife with respect to share trading undertaken during the marriage”. In relation to the above issues, the following observations must be made:
a)The significant reduction in capital wealth of this family does not render the matter complex. Indeed, to some extent, it renders the matter remarkably simple. There is little, if anything, at least on Mr Harper’s allegation, left to divide between these parties;
b)There is certainly an unsecured debt alleged to the husband’s sister. The husband annexes to his Affidavit an executed loan agreement in relation to the debt of $240,000. The agreement is executed by Mr Harper, Ms Harper and the sister (creditor);
What is in issue between the parties, on a consideration of the evidence of each of these parties in its totality, is not the advance of funds but the application and use of those funds.
Ms Harper would appear to infer, although the basis for the inference is unclear, that the funds advanced may not have been provided to her or to the parties jointly and certainly Ms Harper cavils with the suggestion that the funds were all used in relation to share dealings, irrespective of by whom that share trading was undertaken.
At paragraph 24 of her Affidavit Ms Harper says, with respect to the loan agreement (annexure A to Mr Harper's Affidavit) that, “I signed the document in circumstances where certain representations were made to me by both the Aunty and the applicant that payment had not been made when I challenged this the Applicant contended that payments he had indicated to me been having paid, had actually been spent by him”. One can glean from that evidence that Ms Harper challenges the assertion of Mr Harper that those funds were:
a)Advanced to Ms Harper;
b)Advanced for the purpose of share trading; and
c)Wholly expended or wholly expended in share trading.
The loan document itself suggests that funds were advanced to a number of persons and for a number of purposes. These include advances to:
a)The business “(business omitted)” (it is unclear whether that is a registered business name under which Mr Harper trades, a company or otherwise but clearly it is the vehicle through and by which Mr Harper’s business is conducted);
b)Ms Harper (described in the loan agreement as both Ms Harper and Ms Harper, assuming that the two descriptors are one and the same); and
c)Mr Harper (described in the loan agreement as Mr Harper).
Ms Harper has recorded a caveat against title of the property, although why that has been considered necessary as a registered proprietor of the property is unclear. Perhaps it is to preclude registration of any mortgage by Mr Harper’s sister. It is unclear. Ms Harper’s caveat was registered in September 2013.
It would appear clear that Ms Harper wishes to agitate issue as to the existence of a debt due and payable by the parties jointly and/or separately to Ms D. That is so notwithstanding the written loan agreement between the parties. There are, however, a number of arguments which might well be raised by Ms Harper in relation to that loan agreement which would not appear to be marked with stamp duty, may be best described as an acknowledgement of debt rather than a loan agreement and as to which Ms Harper asserts an absence of valid consent advanced by her.
Those issues, whilst not complex of themselves, potentially generate a degree of complexity for the proceedings, not the least of which might well be the need to give notice to Ms D of suggested challenges to her right to repayment. Ms D may assert a right to make Application for intervention in the proceedings to protect her interests.
Fundamentally, the debt alleged to Ms D is one of the significant contributors to the suggested negative asset position of these parties. If the parties jointly and/or severally were not required to repay funds to Ms D, some equity in the Property P property might arise irrespective of its value. However, Ms Harper would not appear to challenge that advances of funds occurred. The challenge would appear to be to the application of those funds. That, of itself, is a matter, inter parties, that raises a “material argument”. Notwithstanding that the costs associated with the determination of that controversy, if a compromise cannot be reached between the parties with respect to that dispute, would likely outweigh the value of the controversy, it is a material argument. On that basis the interests of the perception of justice would support Ms Harper's Application.
Ms Harper also seeks to challenge the value of the Property P property. At undefended hearing, the value ascribed to that property was that asserted by Mr Harper, suggested to be based upon inquiries he had made of real estate agents. No formal valuation evidence was filed or tendered.
Ms Harper raises issues with respect to disclosure. As set out above, a number of Orders have been made requiring mutual disclosure by these parties.
Prior to her Affidavit 15 April 2016, no complaint had been directly raised by Ms Harper as to an absence of disclosure. Complaint might be inferred from the serial disclosure Orders made.
At paragraph 35 of her Affidavit, Ms Harper asserts, “I am concerned that there are assets which have not been disclosed by the Applicant and that the assets that are listed have been extremely undervalued”.
The latter issue, valuation, can be readily and quickly addressed by the parties obtaining appropriate evidence. Ms Harper goes on at paragraph 36 of her Affidavit to suggest, “I have been provided with some disclosure by the Husband. But from my consideration of those, I say that full disclosure has not been made”.
That which is suggested to be deficient in Mr Harper's disclosure is not identified.
Ms Harper does indicate at paragraph 37 of her Affidavit, “It is my intention to … be able to identify what deficiencies in disclosure exist”.
No such deficiencies are identified, either in Ms Harper's evidence or in submissions put on behalf of Ms Harper.
The bald allegation is raised that there has been a lack of disclosure and that there “may” be undisclosed assets, together with misrepresentation about repayment of debt and payment of certain expenses such as Ms Harper’s rent.
The lack of specificity in that alleged as deficient disclosure is a substantial deficiency in Ms Harper's case. There is a world of difference between raising a concern or belief that there may be undisclosed assets and a forensic basis for that belief or concern to be formed let alone expressed.
The highest Ms Harper puts her position is that she is “concerned” that there are assets which have not been disclosed. She does not point to what those assets might be (whether specifically or as a class of assets), does not lead any evidence as to the basis of her suspicion, concern or belief and does not give any basis upon which the Court could share those concerns.
As a consequence, the Court is left with no evidence whatsoever which could possibly be the basis for either:
a)Concern as to non‑disclosure of assets by Mr Harper; or
b)The basis of a declaration, as is sought pursuant to section 45 of the Federal Circuit Court of Australia Act 1999, (and perhaps also relevantly Part 14 of the Federal Circuit Court Rules 2001), that interrogatories should be administered.
To the extent that Ms Harper asserts that Mr Harper has not made “full disclosure”, the complaint is infected by the same difficulties. Ms Harper does not lead any evidence to suggest or enumerate the disclosure which has occurred or indicate that which she suggests is deficient. This is so notwithstanding her evidence that she would, by the date of hearing of her Application to re‑open (delayed by over a month due to illness) identify those deficiencies.
The submission that is put on behalf of Ms Harper (paragraph 27 of the Case Outline) is as follows:
If the Wife's case is made out about lack of disclosure, undisclosed assets and misrepresentation about repayment of debt, then the outcome if the matter were re‑opened would be materially different to the Orders made 21 March 2016.
The difficulty for Ms Harper is that she has not made out any case regarding lack of disclosure or undisclosed assets. She has raised issues regarding suggested “misrepresentation about repayment of debt”, although her evidence, more accurately, goes to the application of funds which were or may have been advanced by Ms D.
As regards disclosure and suggested undisclosed assets, Ms Harper's evidence is deficient. It is not sufficient to make an allegation unsupported by evidence. As indicated above, Ms Harper's complaint is broad and generalised and does not specify any document or class of documents which she believes have not been disclosed and which are necessary to enable her to obtain advice or determine her position. Those difficulties are not remedied by the Orders sought by Ms Harper in the Response now filed by her. Ms Harper simply seeks an Order that, “There be an account of the assets, liabilities, superannuation and financial resources of the parties and there be a proportionate split of such property”.
The Court cannot identify any substantial area of controversy which would arise from the allegation of suggested non‑disclosure or suggested undisclosed assets. The basis upon which the Orders for disclosure made in these proceedings have occurred is to ensure that both parties, consistent with the foundational philosophy of disclosure and discovery, are met.
The Order made was to the effect,
That each party disclose and serve a copy of any document which would prove or disprove an allegation of fact in the proceedings –
is intended to ensure that both parties have symmetrical information; that each party is able to fully and properly gauge the strength of their case and that of the other.
The purpose of disclosure is to ensure that each party can fully and properly understand the case that they are to meet and able to clearly articulate and demonstrate the case which they lead. Vague and broad allegations as to an absence of disclosure, without some causal link between that alleged as inadequate disclosure and that which is sought, do not assist the conduct of litigation.
Following a consideration of the evidence, even treating the evidence of each party as more probably correct than not and treating it at its highest, there is some concern as to the “material arguments” which might lead to a different Order.
I am satisfied, however, that Ms Harper has demonstrated that:
a)There is a real issue between the parties as to the value of the parcel of real estate at Property P. That can be readily and quickly dealt with and addressed through obtaining appropriate valuation evidence (something which has not occurred to date). The existence of that dispute as to value for some period of time is clearly evidenced by the material filed by the parties.
Objection is raised by Ms Harper to Mr Harper having annexed to his Affidavit 14 May 2015, a series of correspondence headed “Without Prejudice Save as to Costs”. That objection is entirely valid. Such material should not be annexed to documents filed by parties with the Court unless the purpose of that annexure falls within one of the exceptions to the rejection of without prejudice settlement negotiation created by section 131 of the Evidence Act 1995. I make clear that for the purpose of the determination of the proceedings on an undefended basis, no reliance was placed upon that correspondence. The fact that there had been correspondence between the parties was clear. However, the material is, as is submitted by Ms Harper's attorneys, clearly inadmissible and, in any event, lacks any probative weight or value.
b)There is clear issue as to the advance of funds by Ms D and the application and expenditure of such funds as were advanced. That factual issue is clearly identified by Ms Harper in her material and adequately so. The material that would be required to demonstrate the advance of funds and expenditure is limited and would not incur significant cost, difficulty or inconvenience for these parties. It would involve Mr Harper obtaining the consent and cooperation of Ms D to provide source documents demonstrating the advance by her of funds (whether to the parties jointly or individually or to others on their behalf), and each party producing documents demonstrating the receipt of funds and their expenditure.
c)There would appear to be some issue between the parties regarding the value of what might be described as minor assets and chattels, including motor vehicles. Those issues again can be dealt with relatively quickly and simply.
The existence of such issues does not of itself equate to a “material argument” that might lead to different Orders being made. Having regard to the discussion of principles undertaken above by FM Jarrett (as he then was) I am conscious that the Court is caught between having made a determination of the proceedings based on unchallenged evidence and the weight that is then attached to that evidence and findings of fact made in reliance thereupon, when clearly there is now some degree of controversy in relation to the veracity of that evidence.
I am satisfied that I cannot and should not accept that each finding of fact made by me at undefended hearing is unassailable. Clearly, if there is a material argument available to Ms Harper, I must treat those findings with some caution, perhaps best described as conditional acceptance.
I am satisfied that the issues which are clearly identified as in dispute, and the subject of appropriate controversy, are issues material to the outcome of the proceedings.
If the Balance Sheet provided by and accepted and relied upon by the Court in determining Mr Harper's Application on an undefended basis is accepted, then clearly the outcome could not be different. There are no positive assets to divide simply debt to apportion.
By reference to Mr Harper’s evidence the parties are in a negative asset position and, as tragic as that may be (and also irrespective of how that has come to be), there is nothing that could change the consequence of the proceedings.
The Orders that were made required the transfer by Ms Harper to Mr Harper of her interest in the Property P property from which Mr Harper conducts his business. Mr Harper was to assume all liability with respect to that property, including a registered mortgage to a third party, and the suggested outstanding loan to Ms D. Those debts combined exceed the value of the property as alleged by Mr Harper.
There is also an income tax liability for which Mr Harper was liable, and which Mr Harper has discharged subsequent to the undefended Orders being made. That liability was alleged as a sum of $84,000. The liability as discharged by Mr Harper, proceedings having been commenced by the Australian Taxation Office for recovery of that amount, together with interest and other sums, exceeded $90,000.
Mr Harper alleges that the taxation debt was incurred between April 2008 and September 2013. That is, however, asserted in the outline of submissions provided by Mr Harper's present Counsel, rather than having been led by him in his evidence previously. There is nothing arising from the documents provided which would corroborate that allegation (although it is not doubted). That liability and its discharge might thus also be an issue in dispute between these parties, albeit addressed relatively easily through adequate and appropriate disclosure.
Against the above, it is submitted on behalf of Mr Harper that, “further litigation in this matter will result in further substantial legal costs and an exacerbation of the parties' debts for no conceivable gain for either party”.
There is some basis for that submission, although I do not accept it unreservedly. The issues that are raised by Ms Harper would suggest that there is a real controversy between these parties as regards the issues identified above. Those issues would have the potential to vary the value of the pool available for division by some hundreds of thousands of dollars and, importantly, produce a positive rather than negative asset pool.
The costs which would be incurred in addressing those controversies are not significant. What would be required and what one would imagine would and should occur, would be an expeditious resolution of those controversies through obtaining appropriate valuation evidence and undertaking appropriate disclosure before engaging in genuine effort or good faith negotiation.
I am conscious that the husband had not, prior to the undefended hearing, obtained valuation evidence with respect to the significant assets, including:
a)The Property P property; and
b)The business operated by him.
It may well be that formal and appropriately qualified valuation evidence with respect to those assets (the Evidence Act 1995 would require expert evidence rather than simply the assertion of the parties, as was the best available evidence at undefended hearing) can be obtained expeditiously and at no great cost and upon completion of those relatively simple and inexpensive processes, one might hope that the legal representatives for the parties would give appropriate advice to each of the parties and engage in an appropriate course of lawyer‑assisted negotiation. That negotiation might be, one would hope, focused upon a resolution of disputes rather than “sabre rattling” or somewhat domineering, accusatory and judgmental assertion and positional bargaining, as would appear to have occurred in the earlier attempts at negotiation between the legal representatives for these parties (different legal representatives to those presently retained, I hasten to add).
Overall, I am satisfied that there are material arguments available to Ms Harper that might, subject to the above comments as to the resolution of evidential and valuation controversies, lead to the making of Orders different to those presently in force.
Prejudice to Mr Harper
It could not be argued (and appropriately it is not) that Mr Harper would not suffer prejudice if the Orders of 21 March 2016 were set aside.
Mr Harper has done that required of him in the conduct of this litigation. He has obtained a Judgment, albeit on an undefended basis. Ms Harper had been afforded abundant opportunities to participate in those proceedings and to avoid the consequence which flowed from her non‑attendance. Those Orders have been made and were obtained and Mr Harper is entitled, as it were, to the fruits of his litigation.
Mr Harper asserts that the prejudice to him cannot be overcome by an Order for Costs. In this regard, Mr Harper points to Ms Harper being, as it were, a “person of straw”. Ms Harper's own evidence gives some validity to that assertion. Ms Harper asserts that she is impecunious and her statement of financial circumstances deposes to her not being presently employed and having no available assets of significance from which she could meet any Order for Costs. Ms Harper deposes that her ability to retain legal representation has arisen only as a consequence of the largesse of family members providing funds to her.
Ms Harper's statement of financial circumstances suggests that her financial position is significantly disadvantaged. Ms Harper has credit card debts, for example, approaching $60,000 and with no realistic means, from that disclosed by her within her statement of financial circumstances of meeting those liabilities.
Ms Harper’s debts have some relevance to the above considerations also as the liabilities of Ms Harper, which had not been advanced by her as she had failed to file material, were not taken into account in the determination of these proceedings by the Court. Some issue might arise as to whether the Property P property might be sold to discharge as much of the debt of the parties plural (rather than purely the debt for which Mr Harper is liable) in preference to other distributions.
The prejudice which each party will experience as a consequence of that which will occur in the proceedings would ordinarily be borne by them, save an Order for Costs made by the Court at the conclusion of the proceedings. Costs are, of course, governed by section 117 of the Act, including the “general rule” in section 117(1) that each party will pay their own costs and subject to the reserved discretion in subsection (2) to award costs when the dual test of a justifying circumstance and justice and equity is achieved.
There are costs involved in conducting litigation. The majority of those costs, even when an Order for Costs is made, are usually borne by individual parties. Costs, if awarded, are generally on a party/party basis rather than an indemnity basis (for a discussion of principles relevant to same, see Prantage & Prantage [2013] FamCAFC 105).
Certainly, further cost will be incurred by Mr Harper if the extant Orders are set aside. Further cost will be incurred by Ms Harper. Those costs, however, are subordinate to the interests of justice. The very basis for jurisdiction (whether inherent or prescribed by rules in the case of the Federal Circuit Court of Australia) to set aside Orders is the preservation of the integrity of the Court, the integrity of the judicial process and the delivery and perception of justice.
The prejudice or potential prejudice to Mr Harper is one of cost. The prejudice or potential prejudice to Ms Harper is a more fundamental consideration. Ms Harper will also incur cost. However, Ms Harper will incur a perceived if not real injustice if she is not now permitted to re‑open and pursue her Application. As is submitted on behalf of Ms Harper (paragraph 29), “The public interests … do [es] not warrant the Wife being held out of pursuing her entitlements”.
I am conscious of that opined in the discussion eruditely undertaken by my colleague, Judge Jarrett that the interests of justice are generally served by bringing a conclusion to litigation subject to due process having been afforded to a party. I do not cavil with that suggestion. Indeed, I embrace it and adopt it. However, in this case there are two issues that must stand against those considerations. I am satisfied those considerations might be described as speaking to and enlivening those obligations.
Firstly, as I had commenced and in the words of Lord Atkin, “Finality is a good thing, but justice is better”.
Further, as opined by the New South Wales Court of Appeal in Northey & Bega Valley Shire Council (and to paraphrase), whilst mere absence from or non‑participation in a hearing is insufficient to justify setting aside an Order, there must be some added factor or factors that makes it unjust for the Order to stand. In this case, I am so satisfied. Indeed, I am satisfied there were a number of such factors. These include but are not limited to:
a)The wife has clearly established that she had a reasonable explanation for non‑participation. That reasonable explanation related to the wife's then mental health. The wife, whether appropriately referred to as suffering under a legal disability as recognised at law or otherwise, clearly was impeded in her capacity to participate, and thus the interests of justice would be entirely denied by now shutting her out of the proceedings, and affirming the Orders made in her absence and without her participation;
b)The wife has a material argument. The evidence relied upon by the husband in prosecution of his Application was not substantially probative. It was adequate in the circumstances. I was satisfied at the time of determination that it was adequate and sufficient for the purpose of concluding the proceedings. However, that was subject to the reservation of the wife's right to apply to re‑open which has now been exercised. In those circumstances, I am not satisfied that the integrity of the judicial process or of the Orders made would be supported by the wife's exclusion and her inability to commission and lead evidence of her own regarding issues the subject of controversy (including with respect to value), as opposed to the Orders standing in reliance upon the husband's mere assertion and hearsay evidence as to value;
c)The issues which the wife raises are not insignificant. They would warrant and require, in the interests of justice and the preservation of public confidence in the Court process and judicial determination of disputes, that the wife be afforded that further opportunity.
Certainly, whilst there is prejudice to the husband, the prejudice is largely financial. That is not to ignore the reality for these parties that they have experienced a number of years of significant financial disadvantage and tragedy in their financial affairs. However, to the extent that further costs may not be readily compensable by an Order for Costs, it is possible that some asset or assets may be available which would address such concerns. If they cannot be addressed, it will remain a lasting prejudice to the husband who will incur further debt.
The wife will also incur further debt, in all probability equal to that incurred by the husband. She will, however, incur the substantial injustice, having provided a reasonable explanation for why she had not only failed to participate in the hearing 21 March 2016 but had failed to file material or fully and properly engage in the proceedings, of being shut out from justice. She would be fundamentally denied justice by not having been heard.
Ms Harper has the care of the three children of the relationship and I am not ignorant of the reality that since the conclusion of the proceedings on 21 March 2016, the arrangements for the financial support of those children, as provided by Mr Harper, would appear to have changed dramatically. That was not a change which was envisaged, signalled or conceded as possible let alone probable by Mr Harper. Whilst I am not satisfied that this circumstance would give rise to an argument that the Orders have been obtained against good faith (and thus invoking further considerations as outlined in authorities such as Perpetual Trustees Australia Limited & Heperu Proprietary Limited (No. 2) (2009) 78 NSWLR 190, or Arnold & Forsythe [2012] NSWCA 18, and Violi & Commonwealth Bank of Australia [2015] NSWCA 152, or Chand & Zurich Australia Insurance Limited [2013] NSWSC 2001), I am satisfied that it lends greater weight and support to the prejudice that would be experienced by Ms Harper outweighing that which would be experienced Mr Harper.
It is submitted on behalf of Mr Harper that:
…re‑opening of concluded litigation is an extraordinary step and should only occur in extraordinary and exceptional circumstances based on real evidence and in circumstances where the prejudice to the party who has complied with their duties as a litigant and has successfully obtained a verdict is not prejudiced.
I do not accept that this is an accurate reflection of the present state of law as discussed in Clifford & Mountford, and as accepted and applied by the Full Court in Barbey & Tuttle. Certainly, what is clear and consistent across the authorities discussed therein, and particularly as discussed by Mason CJ in Autodesk Inc & Dyason(No.2) (1993) 176 CLR 300 at 301‑303, is that the power to be exercised in setting aside an order is to be exercised “with great caution” but fundamentally, in view of the public interest in the finality of legal proceedings, with regard to the public interest in the integrity of the judicial process.
To the extent that it is submitted that Ms Harper must demonstrate “extraordinary” or “exceptional” circumstances, I reject that submission. The settled authorities with respect to the exercise of discretion to set aside Orders and specifically with respect to the interpretation and application of rule 16.05 of the Federal Circuit Court Rules 2001, do not go so far. The authorities require a reasonable explanation for absence or delay, a material argument demonstrated as available and a consideration of prejudice.
The matters that are raised by Ms Harper, whilst deficient as regards the specification of allegation of potential undisclosed assets and incomplete disclosure, satisfy me as to those grounds.
To the extent that I have rejected Ms Harper's broad assertion as to an absence of adequate disclosure by Mr Harper, I am also conscious that the material that was relied upon by Mr Harper at hearing, whilst sufficient on an unchallenged basis and for the purpose of an undefended hearing in circumstances where the asset pool of the parties appeared to have a negative value, would not suffice for the purpose of a contested determination of any controversy. That, combined with each of the matters discussed above, and the changes in circumstances which have arisen, it would seem, within a very short moment after the conclusion of these proceedings, is such that I am satisfied that the interests of justice would not be met by a rejection of Ms Harper's Application to re‑open.
For all of the above reasons, I propose to grant the relief sought by Ms Harper, being that the Orders made 21 March 2016 be set aside, and that Ms Harper be given the opportunity to now re‑open her case.
I do not propose to deal with the pleas for interim relief that are contained within Ms Harper's Application (relating to litigation funding, interim spouse maintenance and the like). I am not satisfied that there is sufficient evidence before the Court to enable the determination of those issues, nor that either party has been given appropriate due process in addressing those issues (written submissions have certainly been put on behalf of Mr Harper by his Counsel, although further opportunity might well be sought by one or both parties).
I do propose to make Orders with respect to specific disclosure and discovery, and I do propose to deal with the Application for change of venue. It can be dealt with in very short compass.
Change of venue
Ms Harper seeks a transfer of these proceedings to the Brisbane Registry of the Federal Circuit Court of Australia. The Application for transfer is supported by a number of submissions which I will deal with specifically.
Any application for change of venue must consider each of the factors set out in rule 8.01 of the Federal Circuit Court Rules 2001 which provides as follows:
Change of venue
(1) A party who files an application or response in a proceeding may apply to have the proceeding heard in another registry of the Court.
(2) In considering an application, the Court must have regard to:
(a) the convenience of the parties; and
(b) the limiting of expense and the cost of the proceeding; and
(c) whether the matter has been listed for final hearing; and
(d) any other relevant matter.
I will address each of those issues separately.
Convenience of the parties
It is certainly more convenient for Ms Harper if the proceedings are dealt with in Brisbane and in circumstances whereby her evidence establishes that she has or has recently experienced a depressive disorder. To the extent that it is submitted on behalf of Ms Harper, however, that, “There does not appear to be any reason for the Husband having commenced proceedings in the Parramatta Registry” (paragraph 18 of the wife's Outline), I reject that submission.
The husband is perfectly entitled to commence proceedings in any Registry of his choosing, provided there is a nexus between that Registry and the subject matter of the dispute. Clearly, the husband resides permanently in Sydney. The major surviving asset of the parties is in Sydney. Whilst there is clearly evidence that relates to transactions that have occurred within New South Wales and Queensland, that evidence is largely documentary, and can be obtained just as readily irrespective of the venue of the proceedings.
Ms Harper submits that, “By virtue of this conduct”, being the husband's commencement of proceedings in the Parramatta Registry, “he has made it more onerous for the Wife to engage in the proceedings”.
The submission is also put that the onerous nature of the proceedings has been exacerbated by the husband having had the benefit of legal representation whereas the wife has not. The latter submission I accept. The former submission I reject. It would be onerous for either party to be engaged in proceedings that are in a State in which they do not live, with the requirement to engage attorneys and the like.
However, the Federal Circuit Court of Australia (with the exception of Western Australia) exercises a federal jurisdiction in family law. The rules of the Court apply irrespective of the venue in which the proceedings are conducted and it is equally possible for each of the parties to engage in the proceedings by telephone and other electronic means. Indeed, the Federal Circuit Court of Australia Act 1999 encourages the Court's use of such services to overcome such difficulties and as part of the Court's mandate for informality.[23]
[23] See section 42 and Division 5 of the Federal Circuit Court of Australia Act 1999.
Whilst certainly I accept that it would be far more convenient for Ms Harper to participate in the proceedings if they were in the Brisbane Registry, it would be correspondingly (perhaps not equally) inconvenient for Mr Harper if the proceedings were dealt with in Brisbane. That is particularly so when the proceedings have been before this Registry of the Court for approximately one year.
Limiting of expense and cost of proceedings
The cost and expense of the proceedings has already been increased as a consequence of Ms Harper's lack of participation. While she has provided reasonable explanation for that lack of participation, it is a simple reality that the burden of that cost has been borne by Mr Harper. I do not impose to inflict a further burden of costs through transfer.
There is certainly the possibility that costs might increase for Ms Harper if it were necessary to engage town agents and the like for inspection of material. However, there are means and ways of overcoming even those logistical problems. Appearance can occur by telephone, AVL link and the like for all but the final hearing of the proceedings (even that could possibly be conducted in that fashion if necessary).
Inspection of material on subpoena and the like can be equally addressed through readily available means such as material being copied or scanned and electronically produced. I am not satisfied that the limiting of expense or cost would support a transfer of the proceedings.
Whether the matter has been listed for final hearing
The matter has been heard and determined on a final basis, albeit undefended. The matter has been before this Court for nearly 12 months. I do not propose, in those circumstances and absent compelling basis, to transfer the matter.
Other relevant matters
No substantial submissions were put on Ms Harper's behalf beyond the above matters.
It is submitted that a final hearing of the matter would require a listing of three days. That will be determined once the parties have completed very specific and directed disclosure and the preparation of valuation evidence to address the issues identified above and as to which I propose to make Orders today.
It is submitted that there is greater delay in the Parramatta Registry than the Brisbane Registry. That may well be so, although it is unclear. The disadvantage to litigants through the Parramatta Registry through delays caused by the Registry having had its number of Judges reduced over time, and only recently increased, is well known. However, it is the Registry in which these proceedings have been litigated for 12 months.
A more expeditious hearing would be desirable for every litigant before the Court. There is, however, some irony in the wife now agitating for expeditious determination in circumstances where the present delay of 12 months has been occasioned through the wife's non‑engagement.
While certainly I accept the wife has the care of the three children of the marriage it is not necessary, at this point in the proceedings, for her to travel to Sydney and it is open to the wife through her attorneys, to make Application to avoid that.
The parties certainly resided for a significant period of their relationship on the (omitted). Ms Harper asserts that for the last 10 years of the parties' marriage prior to separation, the parties had resided in that locality. The relationship of the parties has spanned New South Wales and Sydney, however, and the parties had, prior to those 10 years, lived in Sydney.
Where the parties resided prior to their separation is of less concern to me than where the evidence would arise. The only parcel of real estate presently available for division between these parties is in Sydney. The documents which would be required to evidence transactions and prove facts in these proceedings can be obtained irrespective of where the proceedings are heard.
It is otherwise submitted that the husband is in a superior financial position to the wife, and that the public interest discourages “such conduct”. It is not possible to ascertain what is intended by the reference to “such conduct” by reference purely to the husband's financial position. It would appear to be a suggestion that the husband has deliberately and maliciously commenced proceedings in a Registry with no connection to either party for the purpose of creating hardship, inconvenience and difficulty for the wife. I reject that submission. Further, I reject the submission that there is a public interest in permitting litigation to be conducted in one Registry of the choosing of a party in suggested “superior financial position”.
There is also some controversy as to whether the husband is, in fact, in a superior financial position. Whilst the husband certainly has greater income and earning capacity than the wife, his income is not substantial (if the husband’s evidence is accepted), and he is left to bear the brunt of and service the secured liabilities of the parties as well as other debts.
I am also conscious that the Application for change of venue was made after the proceedings have been on foot for some significant period of time.
I am not satisfied that a transfer should occur, by reference to each of the above considerations individually and collectively.
In relation to the balance of relief, as indicated it will need to await determination at another time.
In relation to disclosure, discovery and valuation, I propose to make Orders as indicated and they are set out in the attached Orders.
I certify that the preceding one hundred and seventy-two (172) paragraphs are a true copy of the reasons for judgment of Judge Harman
Date: 1 July 2016
(1) The court may vary or set aside an order before the earlier of the following—
(a) the filing of the order; or
(b) the end of 7 days after the making of the order.
(2) The court may set aside an order at any time if—
(a) the order was made in the absence of a party; or
(b) the order was obtained by fraud; or
(c) the order is for an injunction or the appointment of a receiver; or
(d) the order does not reflect the court’s intention at the time the order was made; or
(e) the party who has the benefit of the order consents; or
(f) for a judgment for specific performance, the court considers it appropriate for reasons that have arisen since the order was made.
(3) This rule does not apply to a default judgment.
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