Harrell and Nesland

[2020] FamCAFC 21

FAMILY COURT OF AUSTRALIA

HARRELL & NESLAND [2020] FamCAFC 21

FAMILY LAW – APPEAL – APPLICATION IN AN APPEAL – EXTENSION OF TIME TO SERVE NOTICE OF APPEAL – Where the parties have been involved in litigation since 2012 – Where the de facto wife was ordered to pay the de facto husband’s costs of the proceedings on a party and party basis – Where there was dispute over whether the costs order was to be pursuant to the Family Law Rules 2004 (Cth) or the Federal Circuit Court Rules 2001 (Cth) – Where the primary judge utilised the slip rule under r 16.05(2) of the Federal Circuit Court Rules 2001 (Cth) – Where there appears to be a disparity of approximately $250,000 between the amount of costs on the Federal Circuit Court scale and the costs on the Family Law Rules scale – Where the primary judge stated his intention was to order the costs be paid on the Family Law Rules scale – Where the de facto wife appeals from the primary judge’s utilisation of the slip rule – Where the de facto wife filed her Notice of Appeal within time but failed to serve her Notice of Appeal within time – Consideration of the principles of the slip rule – Consideration of Pawley & Pawley [2017] FamCAFC 136 – Where there is a need to have regard to all of the surrounding circumstances, in particular a full transcript, to determine whether it can properly be said that the slip rule has application in a given case – Where it is insufficient to simply rely on the primary judge’s assertion that his intention was for the costs to be assessed under the Family Law Rules scale – Where it cannot be said the de facto wife’s appeal lacks merit – Application for extension of time to serve the Notice of Appeal granted – Costs reserved.

Bankruptcy Act 1966 (Cth)

Family Law Act 1975 (Cth) Pt VIIIAB
Federal Circuit Court of Australia Act 1999 (Cth) s 5

Family Law Rules 2004 (Cth) rr 22.05, 22.45

Federal Circuit Court Rules 2001 (Cth) rr 16.05, 21.10, 21.11

Emmert & Quarto [2019] FamCAFC 208
Endresz v Commonwealth of Australia (2019) 139 ACSR 561; [2019] FCAFC 197
Harrell & Nesland (No. 2) [2018] FCCA 961
Jackamarra v Krakouer (1998) 195 CLR 516; [1998] HCA 27
Lawrie v Lees (1881) 7 AC 19
Luck v University of Southern Queensland (2018) 265 FCR 304; [2018] FCAFC 102
McMahon and McMahon (1976) FLC 90-038; [1976] FamCA 22
Milham v Stanford (2001) FLC 93-073; [2001] FamCA 294
Newmont Yandal Operations Pty Ltd v The J Aron Corporation and the Goldman
Sachs Group Inc (2007) 70 NSWLR 411; [2007] NSWCA 195
Oswald & Karrington (2016) FLC 93-726; [2016] FamCA 152
Pawley & Pawley [2017] FamCAFC 136
Pendleton & Pendleton [2018] FamCAFC 203
Quant & Bonde (2018) 58 Fam LR 379; [2018] FamCAFC 150
Ramsay Health Care Australia Pty Ltd v Compton (2016) 247 FCR 387; [2016] FCAFC 125
R v Cripps; Ex parte Muldoon [1984] 1 QB 686
Skinner v Australian and British Land Co Ltd (1889) 11 ALT 57

APPLICANT: Ms Harrell

RESPONDENT: Mr Nesland

FILE NUMBER: BRC 6489 of 2012

APPEAL NUMBER: NOA 56 of 2019

DATE DELIVERED: 31 January 2020

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Kent J

HEARING DATE: 14 January 2020

LOWER COURT JURISDICTION: Federal Circuit Court of Australia

LOWER COURT JUDGMENT DATE: 22 May 2019

LOWER COURT MNC: [2019] FCCA 1794

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Matthew Love Family Lawyers

COUNSEL FOR THE RESPONDENT: Mr Kirk SC

SOLICITOR FOR THE RESPONDENT: Hirst & Co

Orders

1. The time within which the applicant de facto wife had to serve the Notice of Appeal filed by her on 18 June 2019 be extended to 26 July 2019.

2. The respondent de facto husband’s application for dismissal of the applicant de facto wife’s Notice of Appeal pursuant to r 22.45 of the Family Law Rules 2004 (Cth) be dismissed.

3. Each party’s costs of and incidental to this application be reserved.

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

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

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT
 BRISBANE

Appeal Number: NOA 56 of 2019
File Number: BRC 6489 of 2012

Ms Harrell

Applicant

And

Mr Nesland

Respondent

REASONS FOR JUDGMENT

1. By an Application in an Appeal filed on 16 September 2019, Ms Harrell (“the de facto wife”) seeks an extension of time in which to serve a Notice of Appeal filed by her on 18 June 2019 upon Mr Nesland (“the de facto husband”). That application is opposed by the de facto husband. He seeks that the de facto wife’s Notice of Appeal be dismissed pursuant to r 22.45 of the Family Law Rules 2004 (Cth) (“the Family Law Rules”), for non-compliance or delay.

2. The de facto wife seeks to challenge on appeal the determination of the primary judge to amend, on 22 May 2019, the terms of a costs order originally made by the primary judge about a year earlier, on 19 April 2018, such amendment being made in reliance upon the slip rule in r 16.05(2) of the Federal Circuit Court Rules 2001 (Cth) (“the FCC Rules”).

3. The effect of the amendment, by reference to other relevant rules within the FCC Rules which will be discussed, is to prescribe that the costs as ordered be recoverable on the scale of costs set out in Schedule 3 to the Family Law Rules. Absent such amendment, by operation of the relevant FCC Rules, the order as expressed in its original form would result in the ordered costs being in an amount in accordance with Schedule 1 to the FCC Rules. In practical terms, the difference is significant being in the order of about $278,000 (on the Family Law Rules Schedule) as compared with about $23,000 (on the FCC Rules Schedule).

Litigation history

1. On 10 January 2018, a judge in the Federal Circuit Court of Australia (“the FCC”) made property settlement orders pursuant to Part VIIIAB of the Family Law Act1975 (Cth) (“the Act”). By those orders, the de facto wife received or retained property interests worth $859,649 (28 per cent) and the de facto husband received or retained property interests worth $2,185,371 (72 per cent) of total property interests found by the trial judge to be worth $3,045,020. The de facto wife’s application for spousal maintenance was dismissed. No appeal was filed from those orders.

2. In February 2018, the de facto husband filed an application for costs of the proceedings. Importantly, that application sought the following order:

   2. That, pursuant to Rule 21.02 of the Federal Circuit Court Rules:

   a.The Applicant pay the Respondent’s costs of the proceedings incurred on or after 27 August 2014 on an indemnity basis fixed in the amount of $345,803.81, or otherwise as agreed or assessed on an indemnity basis;

   FAILING WHICH

   b.The Applicant pay the Respondent’s costs of the proceeding incurred on or after 27 August 2014 on a party-party basis fixed in an amount as determined by this Honourable Court or otherwise, as agreed between the parties in writing or as assessed on a party-party basis;

   FAILING WHICH

   c. The Applicant pay the Respondent’s costs of the proceeding incurred on or after 27 August 2014 pursuant to schedule 1 of the Federal Circuit Court Rules fixed in an amount as determined by this Honourable Court or otherwise, as agreed between the parties in writing or failing agreement, as assessed.

   …

   (As per the original)

3. The de facto husband’s application came before the primary judge who, on 19 April 2018, delivered reasons[1] and made orders (amended on 20 April 2018 and 22 May 2019[2]) which required the de facto wife to pay the de facto husband’s costs on a party and party basis. This order largely rested on the offers made by the de facto husband which were:

   a)On 17 September 2012, for the de facto wife to receive 31.5 per cent of the pool of property interests as ultimately determined; and

   b)On 14 December 2012, for the de facto wife to receive 34.5 per cent of that pool.

   [1]Harrell & Nesland (No. 2) [2018] FCCA 961.

   [2] It is assumed that the reference, on the face of the 19 April 2018 order, to its amendment on 23 May 2019, rather than 22 May 2019, must be an error.

4. The primary judge highlighted the expense the de facto husband was put to in complying with disclosure obligations and requests, filing applications to have caveats removed and as a consequence of the de facto wife’s conduct in the proceedings. His Honour also set out the issues which, at trial, the de facto husband succeeded on, including the make up of the asset pool and the dismissal of the lump sum spousal maintenance application (see [10] of the primary judge’s 19 April 2018 reasons). The de facto wife’s opposition to the making of a costs order was based, solely, on her financial circumstances (see [6] of the 19 April 2018 reasons).

5. Having expressed satisfaction that there were justifying circumstances for the making of a costs order, the primary judge said this (reasons for judgment delivered on 19 April 2018 at [20]–[22]):

   20.It has been submitted to me that in all of the circumstances I ought to make an order for indemnity costs in favour of the [de facto husband] in the amount of $265,187.48.  Those costs represent the actual costs paid by the [de facto husband] subsequent to the making of the de facto declaration order by Judge Jarrett.  They do not include the costs of the substantive appeal which are not claimed. 

   21.I am not satisfied that in all the circumstances the [de facto wife] ought to be penalised by the making of an indemnity costs order.  It may be that there were other factors motivating her to take the course which she did.  There was some uncertainty on her part concerning the extent of assets which might properly form part of the pool, and in my view the [de facto wife’s] insistence on extensive disclosure, though unnecessary in the main, was not motivated by spite.  I accept, however, that the [de facto wife] was largely unsuccessful on most of the contested issues at trial.  I consider that an award of costs to be assessed on a party-party basis is warranted.  Any such assessment will necessarily take into account the fact that there were two trials essentially dealing with the same issues, and that there ought in such circumstances be no double-dipping.

   22.I accordingly order that the [de facto wife] pay the [de facto husband’s] costs of and incidental to the proceedings – excluding the costs of appeal – on and from 27 August 2014 until 10 January 2018, to be assessed on a party-party basis.

6. With respect to the primary judge’s observation at [20] of the reasons quoted above as to the amount for indemnity costs of $265,187.48, it is not known how his Honour arrived at that figure. As noted from the application, the amount of indemnity costs was in fact $345,803.81, and as at April 2018 when the primary judge heard the application, the amount for party and party costs was yet to be assessed.

7. The significance of what his Honour said at [20] is that it is left unclear from that statement whether his Honour was disinclined to order costs on an indemnity basis, whatever the proper amount of those costs were, or whether his Honour was disinclined to make an order for costs for as much as $265,187.48. As will be seen, the amount subsequently assessed for party and party costs in fact exceeds the figure of $265,187.48 in that it amounts to approximately $278,000.

The amendment in reliance upon the slip rule

1. Subsequent to the primary judge’s orders made on 19 April 2018, the de facto husband had a costs assessment undertaken which was conducted on a party and party basis pursuant to the Family Law Rules. Upon serving the resulting report on 31 August 2018, which calculated the de facto husband’s party and party costs at $278,407.24, the de facto wife disputed the costs accounting (by Notice filed on 27 September 2018) on the basis that it ought to have been calculated on the FCC scale. If it had been calculated on the FCC scale, the amount would be, on the de facto wife’s case, approximately $23,000.

2. An Application in a Case was filed by the de facto husband on 3 December 2018 which, relevantly, sought:

   1.The Respondent de facto Husband’s costs pursuant to the order of [the primary judge] dated 19 April 2018 be assessed pursuant to schedule 3 of the Family Law rules (2004).

   ...

3. That application was heard and determined on 22 May 2019 when the primary judge varied his April 2018 orders such that the de facto husband’s costs ought be assessed on the Family Law Rules scale.

4. The orders as amended are as follows, showing both the terms of the original order expressed and the amendments made:

   THE COURT ORDERS ONA FINAL BASIS:

   1.That the Applicant pay the Respondent’s costs of and incidental to the proceedings – excluding the costs of appeal – on and from 27 August 2014 until 10 January 2018, to be assessed on a party-party basis to be referred to taxation under Chapter 19 of the Family Law Rules 2004 (Cth.)

   2.That the Applicant pay the Respondent’s costs of and incidental to the Respondent’s Application in a Case filed on 13 February 2018, including the costs of appearance on 18 April 2018, such costs to be assessed on a party-party basis such costs to be referred to taxation under Chapter 19 of the Family Law Rules 2004 (Cth.)

   3.That the Applicant’s response to an Application in a Case filed on 17 April 2018 be dismissed, and there be no order as to costs in respect thereof.

   AND IT IS ORDERED UNTIL FURTHER ORDER:

   4.That paragraph 2(a) of the order of His Honour Judge Baumann (as he then was) be stayed pending the making of further submissions as to whether or not the [B Street] property should be the subject of a charge, or some other form of security, for the purpose of the payment to the Respondent of the amount of party-party costs assessed as payable to him pursuant to these orders.

   5.        That the matter be adjourned to chambers.

   6.That each party have liberty to apply on the giving of three (3) days’ notice, each to the other.

   AND IT IS ORDERED BY THE COURT:

   7.That the reasons for judgment of the Court handed down on 19 April 2018 be varied, pursuant to the provisions of Rule 16.05(2)(h) of the Federal Circuit Court Rules 2001, by the inclusion in such reasons, as a new paragraph 17 thereof, of the following:

   “17As to the Applicant’s financial circumstances deposed to in her affidavit filed on 17 April 2018, I am mindful of the fact that any adverse costs order made against her will negatively impact upon her net wealth. I note also that she has deposed that her solicitors have lodged a caveat over the [B Street] property as security for the payment of their fees in the amount of some $150,000.00 owed to them by the Applicant. In those circumstances, it is probable that the [B Street] property will have to be sold in any event to pay the solicitor’s fees from the proceeds of sale. It is, in my view, an illegitimate stance for the Applicant to adopt whereby on the one hand she has unilaterally exposed her home to being sold so as to meet the payment of her own legal fees, whereas on the other hand she impliedly submits that a costs order should not be made against her because that might give rise to the same result. She ought not be allowed, as a matter of public policy, to both approbate and reprobate.”

   Notation: These Orders have been amended pursuant to Rule 16.05(2)(e) of the Federal Circuit Court Rules 2001 to include Order 7.

   Notation: Order 1 of these Orders has been amended pursuant to Rule 16.05(2)(e) of the Federal Circuit Court Rules 2001 to remove ‘to be assessed on a party party basis’ and to include ‘ to be referred to taxation under Chapter 19 of the Family Law Rules 2004 (Cth.)’

   Notation: Order 2 of these Orders has been amended pursuant to Rule 16.05(2)(e) of the Federal Circuit Court Rules 2001 to remove ‘such costs to be assessed on a party party basis’ and to include ‘such costs to be referred to taxation under Chapter 19 of the Family Law Rules 2004 (Cth.)’

   (As per the original)[3]

   [3] Whilst the orders are expressed to be amended on 23 May 2019 it appears the actual date of amendment was 22 May 2019.

5. In passing, as it is not directly relevant on the current application, Order 7 of the above orders purporting to amend the reasons for judgment delivered on 19 April 2018 by the inclusion of a new paragraph, in purported reliance upon the sip rule, appears to me to be entirely misconceived. Having regard to the definition of “judgment” in s 5 of the Federal Circuit Court of Australia Act 1999 (Cth), the slip rule where it refers to “judgment or order” does not embrace reasons for judgment. It is well settled in this context that reasons for judgment are not of themselves a “judgment” in this connection. A judgment is the formal order by which a court disposes of the matter before it.[4] It is also well settled that it is not legitimate for a judge to expand upon, or alter the substance of, delivered reasons at some later time.[5]

   [4] See, Oswald & Karrington (2016) FLC 93-726 at [10] and the cases there cited.

   [5] For example, Quant & Bonde (2018) 58 Fam LR 379 at [14]–[19].

6. From the reasons for judgment delivered on 22 May 2019, his Honour said this:

   6.The question of costs, which was before the Court on the hearing of the matter on 18 April 2018, was an application for the payment of costs, firstly on an indemnity basis, secondly for costs to be assessed on a party/party basis, and thirdly, for costs to be assessed in accordance with schedule 1 of the FCC Rules. It is clear from the reasons of the Court handed down on 19 April 2018 that the Court was not minded to make an order for the payment of the respondent’s costs on an indemnity basis.

   7.It is further clear that the Court was not persuaded to make an order that costs be paid in accordance with schedule 1 of the FCC Rules. The order as made reflected the order as sought in paragraph 2(b) of the application filed on 13 February 2018. The order as made, though it did not make an order for the assessment of costs pursuant to rule 21.11 of the FCC Rules, was nevertheless an order which clearly was intended to be so made pursuant to rule 21.11(2)(a) of the FCC Rules.

7. I interpolate here that, in [7], the primary judge confirms that the order as made reflected the order as sought in paragraph 2(b) of the application filed on 13 February 2018 the terms of which have earlier been set out. As will be discussed, if the primary judge made the order that was intended to be made, but was in error as to the effect of an order in those terms (an error arguably produced by the legal representatives drawing the application) it may be debatable as to whether the slip rule applies.[6]

   [6] See the reference below to Ramsay Health Care Australia Pty Ltd v Compton (2016) 247 FCR 387.

8. Relevantly, rr 21.10 and 21.11 of the FCC Rules state:

   FEDERAL CIRCUIT COURT RULES 2001 - RULE 21.10

   Costs and disbursements

   Unless the Court otherwise orders, a party entitled to costs in a proceeding (other than a proceeding to which the Bankruptcy Act applies) is entitled to:

   (a) costs in accordance with Parts 1 and 2 of Schedule 1; and

   (b)  disbursements properly incurred.

   …

   FEDERAL CIRCUIT COURT RULES 2001 - RULE 21.11

   Taxation of costs

   (2)  When taxing a statement of costs, a taxing officer must apply:

   (a) for a family law or child support proceeding--the scale of costs set out in Schedule 3 to the Family Law Rules; and

   (b)  for a general federal law proceeding--the scale of costs set out in Schedule 2 to the Federal Court Rules.

   (3)  In this rule:

   “taxing officer” means a Registrar.

1. As appears from these rules, unless the Court specifically orders otherwise, costs ordered in the FCC are costs in accordance with Schedule 1 of the FCC Rules. If an FCC judge ordered a “taxation of costs” in a family law or child support proceeding, r 21.11 operates.

The de facto wife’s Notice of Appeal

1. Following the May 2019 variation of the April 2018 orders, the de facto wife lost her legal representation and, as a self-represented litigant, filed a Notice of Appeal within time, on 18 June 2019. That Notice of Appeal was required to be served on the de facto husband within 14 days of its filing pursuant to r 22.05 of the Family Law Rules; that service did not occur. This is despite the de facto wife having received a letter from the Appeals Registry on 26 June 2019 informing her of the requirement to serve the Notice of Appeal and to file a draft appeal index.

2. The de facto husband was not made aware of the appeal until, subsequent to the de facto wife retaining legal representation on 18 July 2019, he was served with the draft appeal index on 25 July 2019.

3. The de facto husband refused to consent to the appeal proceeding necessitating the application which is before the Court for an extension of time for service of the Notice of Appeal.

Law relevant to an extension of time

1. In Pendleton & Pendleton [2018] FamCAFC 203, I sought to summarise from the authorities the principles relevant to an extension of time in the context of the filing of a Notice of Appeal, at [6]–[9] as follows:

   6.The power to extend time is provided in r 1.14 of the Rules.  The principles governing the discretion to exercise that power are well established in many decisions of the Full Court.  Some recent examples include Bant & Clayton [2014] FamCAFC 108; Chong & Chong [2016] FamCAFC 211; Manotis & Manotis (No 2) [2016] FamCAFC 232; Harrison & Ward [2017] FamCAFC 99; McMillan & McMillan [2017] FamCAFC 88 and Harrison & Ward [2018] FamCAFC 136.

   7.Each of those decisions place emphasis upon the well-known judgment of McHugh J in Gallo v Dawson (1990) 93 ALR 479 at 480 (“Gallo v Dawson”) in which his Honour said of an equivalent rule of court:

   …The grant of an extension of time under this rule is not automatic.  The object of the rule is to ensure that those Rules which fix times for doing acts do not become instruments of injustice.  The discretion to extend time is given for the sole purpose of enabling the court or justice to do justice between the parties … This means that the discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the applicant.  In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time … When the application is for an extension of time in which to file an appeal, it is always necessary to consider the prospects of the applicant succeeding in the appeal … It is also necessary to bear in mind in such an application that, upon the expiry of the time for appealing, the respondent has “a vested right to retain the judgment” unless the application is granted … It follows that, before the applicant can succeed in this application, there must be material upon which I can be satisfied that to refuse the application would constitute an injustice…

   8.It can be seen that in Joshua v Joshua (1997) FLC 92-767 at 84,440 that Lindenmayer J emphasised, again with reference to McHugh J’s decision in Gallo v Dawson, the significance of the consideration as to whether the applicant establishes a substantial issue to be raised on appeal.  There, his Honour observed:

   …the first and most important question to be determined upon such an application as this is whether the applicant has established that there is a substantial issue to be raised on appeal.  If not, the application must fail.  If so, then other considerations may become relevant to the exercise of the discretion, namely: the extent of the delay and the reasonableness of any explanations offered for it; any hardship or prejudice flowing to the respondent from the applicant’s delay which cannot be compensated for by orders as to costs or otherwise: and the desirability, in the public interest, that there be finality to litigation…

   9.The determinative question then, on this application, is whether an extension of time is necessary to enable the Court to do justice between the parties and to prevent injustice – in this connection the Court must weigh the prima facie entitlement of the respondent to retain the benefit of the judgment and the desirability of finality of litigation (see Tormsen and Tormsen (1993) FLC 92-392).

2. These same principles apply to an extension of time for the service of a Notice of Appeal (see McMahon and McMahon (1976) FLC 90-038 at 75,144). In summary, the question of whether to extend time involves consideration of whether such an extension is required so as to do justice between the parties which necessarily involves questions as to the merit of the appeal, the length of delay, any explanation for that delay and any prejudice to the other party.

3. Of course in the present case the extension of time is not in respect of the filing of a Notice of Appeal but rather in respect of extending the time to permit service of an appeal filed within time.

Law relevant to dismissal pursuant to r 22.45

1. Given the de facto husband seeks dismissal of the de facto wife’s Notice of Appeal pursuant to r 22.45, it is helpful to consider the relevant law. That rule states:

   Dismissal of appeal and applications for non-compliance or delay

   (1)  This rule applies if:

   (a)  the appeal is not taken to have been abandoned; and

   (b)  a party (the defaulting party ) has not:

   (i)  met a requirement under these Rules or the Regulations;

   (ii)  complied with an order in relation to the appeal (including an application for leave to appeal  or application in relation to an appeal); or

   (iii)  shown reasonable diligence in proceeding with an appeal or application.

   (2)  A court having jurisdiction in the appeal or application may:

   (a)  if the defaulting party is the appellant or the applicant:

   (i)  dismiss the appeal or application; or

   (ii)  fix a time by which a requirement is to be met and order that the appeal or application will be dismissed if the order imposing the requirement is not complied with

   ...

2. In Jackamarra v Krakouer (1998) 195 CLR 516 at [33], the High Court said this about a court exercising power to dismiss an appeal for delay/want of prosecution or non-compliance with Court orders:

   … [W]hen an appellant has instituted an appeal within time, if all other things are equal, the bare fact that the appellant has failed to take some interlocutory step within the time fixed by the rules would not be reason enough to shut that appellant out from the pursuit of the appeal unless it were clear that the appeal would fail. Of course, the qualification “if all other things are equal” is very important and it should not be permitted to obscure the fact that very often the fact that an appeal is pending may itself affect the respondent adversely in some way.

3. In the circumstances of this case, where even if the de facto wife had served the Notice of Appeal pursuant to the Family Law Rules, the de facto husband was not required to take action prior to the filing of a draft appeal index (when he became aware of the appeal in any event). That being the case, it is difficult to see that the de facto husband has suffered any injustice sufficient to outweigh the potential injustice of the early dismissal of an appeal with any merit.

4. The de facto wife argues that because she is permitted to amend her grounds of appeal any time prior to the filing of her Summary of Argument, the de facto husband has no grounds to claim injustice. That then leads to the necessary consideration of the merits of the appeal. Even though the de facto wife’s summary in relation to this application seems to suggest the appeal’s merits are “a matter for another day”, it is a serious consideration for this application.

Grounds of appeal

1. The de facto wife’s original Notice of Appeal was filed on 18 June 2019. However, the de facto wife seeks to rely on an Amended Notice of Appeal filed on 13 January 2020 containing the following amended grounds of appeal:

   1.That in ordering that the Appellant’s costs be taxed under Chapter 19 of the Family Law Rules the learned Judge of the Federal Circuit Court erred in that he:-

   (a)failed to take into consideration a material circumstance being the Appellant’s financial circumstances in accordance with section 117 of the Family Law Act 1975;

   (b)failed to afford the party procedural fairness in not hearing submissions on the issue;

   (b)failed to provide adequate reasons.

   2.The learned Judge of the Federal Circuit Court erred in that he failed to provide adequate reasons in his judgement handed down on 22 May 2019 for the application of 16.05(2)(e) of the Federal Circuit Court Rules 2001 (Cth).

   3.That the learned Judge of the Federal Circuit Court acted on wrong principle in concluding that rule 16.05(2)(e) of the Federal Circuit Court Rules 2001 (Cth) could be relied upon in the circumstances to vary the Orders of 19 April 2018 (amended on 20 April 2018) in circumstances where the evidence was insufficient to support an inference that there was an “accidental slip or omission” on the part of the learned Judge in the first instance so as to enliven the power.

   4.That even if the learned Judge of the Federal Circuit Court accidentally slipped or omitted in the first instance to consider his discretion pursuant to rule 20.02(2)(c) of the Federal Circuit Court Rules 2001 to refer the costs for taxation under Chapter 19 of the Family Law Rules, the learned Judge acted on wrong principle in concluding that rule 16.05(2)(e) was available in circumstances where discretion could have been exercised in more than one way in the first instance.

   (As per the original)

2. Whilst it would appear from Ground 1 identified above that the de facto wife purports to appeal not only the orders made on 22 May 2019 to vary the 19 April 2018 orders, but also to challenge the determination that there ought be an order for costs as reflected in the orders made on 19 April 2018, on the hearing of this application it was confirmed by the solicitor for the de facto wife who appeared for her that Ground 1 was not pursued, and the de facto wife’s challenges on appeal were confined to the amendment of the original order.

3. The main focus of the argument on this Application in an Appeal was directed to amended Ground 4 and it is that ground to which attention will be focused in considering the prospective merits of the appeal.

4. It bears emphasis that consideration of prospective merits of an appeal in an application such as this is confined only to considering whether the applicant establishes that there is an issue of substance to be raised on appeal. A positive answer to that question is obviously fundamentally different to reaching conclusions about the likelihood or prospects of success of an appeal.

Ground 4 – Application of r 16.05(2)

1. Rule 16.05(2) of the FCC Rules provides:

   Setting aside or varying judgments or orders

   (1)  The Court or a Registrar may vary or set aside a judgment or order before it has been entered.

   (2)  The Court or a Registrar may vary or set aside a judgment or order after it has been entered if:

   (a)  it was made in the absence of a party; or

   (b)  it was obtained by fraud; or

   (c)  it is interlocutory; or

   (d)  it is an injunction or for the appointment of a receiver; or

   (e)  it does not reflect the intention of the Court; or

   (f)  the party in whose favour it was made consents; or

   (g)  there is a clerical mistake in the judgment or order; or

   (h)  there is an error arising in the judgment or order from an accidental slip or omission.

2. Without descending into any detailed history of slip rule powers, it is often the case that orders which are ambiguous are the subject of amendment pursuant to a slip rule to remove that ambiguity. As Sir John Donaldson MR stated in

   
   R v Cripps; Ex parte Muldoon

   [1984] 1 QB 686 at 696, “if a court has reached a decision which is ambiguously expressed either in the reasoned judgment or in the formal orders giving effect to the decision, the ambiguity of expression can be removed in the exercise of the slip rule powers”.

3. Moreover, since the first slip rule was articulated in 1828, the focus of cases, particularly the early foundational cases, has been on the intention of the primary judge. In a factual scenario similar to this case, Hodges J, in Skinner v Australian and British Land Co Ltd (1889) 11 ALT 57, made an order that the defendant pay the plaintiff’s costs but did not specify on which scale they were to be paid. In that jurisdiction, without a specific order that costs be paid on the Supreme Court scale, they were presumed to be paid on the County Court scale. Hodges J amended his order under the slip rule stating that he did actually intend the costs to be paid on the Supreme Court scale. His Honour referred to Lawrie v Lees (1881) 7 AC 19 where Lord Penzance said that every Court has the power to vary its orders “in such a way as to carry out its own meaning, and where language has been used which is doubtful, to make it plain” (at 35). This principle appear to be reflected in r 16.05(2)(e).

4. However, issues arise where the amendment is one which requires the exercise of a discretion or one which attracts a real difference of opinion. One example of the latter of those is Milham v Stanford (2001) FLC 93-073 where it was held that a determination of which liabilities were to be included in an indemnity was not a matter capable of amendment pursuant to the slip rule as that was “a matter where a real difference of opinion can and in fact does exist” (at 88,286).

5. More recently, Thackray J (with whom Loughnan J and I agreed) said this in Pawley & Pawley [2017] FamCAFC 136 (“Pawley”):

   31.All courts have implied jurisdiction to amend orders which do not accurately state what was actually decided or what the court intended to decide: Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1995) 61 FCR 385, 389–399; DJL v The Central Authority (2000) 201 CLR 226. Consistent with this, r 16.05(2)(e) of the Federal Circuit Court Rules provides that the court “may vary or set aside its judgment or order after it has been entered if … the order does not reflect the intention of the Court”. Rule 16.05 goes further in permitting the variation or setting aside of an order on the basis that the order is “interlocutory”, but that is not a power the judge sought to rely upon here.

   32.Although the topic was not the subject of submissions, I consider that r 16.05 does not constitute a code which replaces the implied power of the Federal Circuit Court to control its own process, including the power to take action to prevent injustice. See the authorities discussed in Teo & Guan (2015) FLC 93-653 at [36] et seq and Newmont Yandal Operations Pty Ltd v The J Aron Corporation and the Goldman Sachs Group Inc and Ors (2007) 70 NSWLR 411 at [18].

   33.Therefore, although not provided for in r 16.05, I accept that the power of a court to correct its own order also extends to cases where a matter was not dealt with as a result of inadvertence: Raybos Australia Pty Ltd and Anor v Tectran Corportion Pty Ltd and Ors (1988) 77 ALR 190. However, there is a distinction between cases where an amendment of an order is proposed to give effect to the court’s original intention, and cases where the court proposes to correct an order by including a provision dealing with a matter that was not dealt with at the original hearing. In cases of the latter type, the power to amend appears to be limited to correcting only ancillary or consequential matters and not “substantial” questions. However there is no such limitation where a change is to be made to reflect the original intention of the court: Owston Nominees No 2 Pty Ltd and Anor v Branir Pty Ltd and Ors (2003) 129 FCR 558 at [25].

   34.In determining whether the original order reflected what the court decided (or whether it is appropriate to make an additional order to deal with an issue that was overlooked), it is necessary to look at the surrounding circumstances which include the reasons, the pleadings and, if necessary, the evidence and how the case was conducted: Owston Nominees at [27].

   (Emphasis added)

6. His Honour went on to consider the transcript of the initial hearing before the primary judge as well as the primary judge’s initial reasons as those reasons “are clearly of great significance in determining whether the original orders reflected his Honour’s intentions” (at [45]). Thackray J said that whilst there was “no reason to doubt the primary judge’s recollection of the order that he intended to make … that is not the end of the matter” (at [54] citing Newmont Yandal Operations Pty Ltd v The J Aron Corporation and the Goldman Sachs Group Inc and Ors (2007) 70 NSWLR 411 at [95]).

7. His Honour went on to say:

   55.Furthermore, the authorities make plain that the slip rule can be applied only where the amendment is one upon which no real difference of opinion can exist. Hence, it cannot apply where there is any question involving the exercise of discretion by the judge: Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1995) 61 FCR 385 at 390–391. This proposition is true not only at common law but applies also to matters in which rules equivalent to r 16.05 apply (for example, r 39.05 of the Federal Court Rules 2011 (Cth) and its predecessor, Order 35 r 7 of the Federal Court Rules 1979 (Cth)).

   56.The fact that the primary judge was making a discretionary judgment when amending the order becomes plain when it is realised there was more than one outcome his Honour might have contemplated when deciding what further order to make …

8. Thackray J went on to conclude that:

   58.… [I]t would have been a matter of pure conjecture what additional order, if any, his Honour had in his mind to make to give effect to his reasons. Accordingly, any proposed amendment would inevitably have led to real differences of opinion, thus making it an inappropriate case for application of the slip rule.

9. That conclusion as expressed would seem to accord with statements made earlier in the decision that the intention of the primary judge must be ascertainable in his Honour’s reasons or, as evidenced by Thackray J’s quoting of transcript, from the course of submissions during the hearing.

10. Here, in the primary judge’s reasons delivered when his Honour made the costs orders on 19 April 2018, his Honour does not make any reference to which scale the costs are to be paid on. Whilst his Honour does appear to set out the three alternative orders sought by the de facto husband, which his Honour relies on as implying that because his Honour did not specify the costs to be under the FCC Rules scale, his intention was that the costs would be assessed under the Family Law Rules scale. That, however, does not seem to accord with the FCC Rules themselves which, as his Honour is plainly aware given he cites the rule in his reasons, presumes any costs order made to be assessable under the FCC Rules scale (see r 21.10(a)). As earlier noted paragraph (b) of the subject application does not address the applicable Schedule or scale of costs.

11. His Honour also does not mention the significant disparity between the costs on the Family Law Rules scale and the FCC Rules scale being a difference, on the face of it, of approximately $250,000.

12. However, this could be argued as falling within the same category as that analysed by Thackray J. Moreover, as pointed out by Thackray J, it is insufficient to simply rely on the primary judge’s assertion that his intention was for the costs to be assessed under the Family Law Rules scale.[7]

    [7] See also Emmert & Quarto [2019] FamCAFC 208.

Reason for failure to serve the de facto husband

1. The de facto wife deposes to her losing her legal representation, being overwhelmed by the letter received from the Appeals Registry and subsequently taking just over three weeks to obtain legal representation again as the cause for her failure to serve the de facto husband within time. She does not argue that these are compelling reasons but that they are adequate to explain her failure to serve the Notice of Appeal. In my opinion these reasons are not adequate.

Injustice upon the de facto husband if extension granted

1. The de facto husband argues that if the de facto wife’s application for an extension of time is granted, he would suffer an injustice as a result of having to pay to defend an appeal which he contends is without merit. This is in the circumstances where he maintains he has significant outstanding legal costs.

Resolution

1. By reference to some recent decisions of the Full Court of the Federal Court of Australia in Luck v University of Southern Queensland (2018) 265 FCR 304 (“Luck”) and Endresz v Commonwealth of Australia (2019) 139 ACSR 561 and the many cases cited in those decisions, relied upon by the solicitor for the de facto wife, the question of the proper application of the slip rule in the FCC is not without some difficulty. Notably, for example, in Luck, reference is made to Ramsay Health Care Australia Pty Ltd v Compton (2016) 247 FCR 387 (Rares, Gleeson & Markovic JJ) (“Ramsay”) concerning an order made by a judge extending a period prescribed by the Bankruptcy Act 1966 (Cth) with respect to the life of a creditor’s petition. As summarised in Luck, at [137]:

   … The primary judge [in Ramsay] was held to have “intended” to make the order, albeit on the erroneous assumption that the Court retained the power to further extend the life of the period by a subsequent order. The Full Court held that the [FCC] slip rule could not apply in the circumstances because the order was the product of an intentional decision (albeit based on error) and the order correctly reflected that intention. …

2. Likewise, it can be seen from the decision of the Full Court in Pawley that proper application or scope of operation of the FCC slip rule is not always obvious or clear cut. Most significantly, that case emphasises the need to have regard to all of the surrounding circumstances, including the transcript, to determine whether it can properly be said that the slip rule has application in a given case. Reference has already been made to [20] of the primary judge’s 19 April 2018 reasons concerning the mysterious reference to the amount of $265,187.48. Consideration of the transcript of that hearing might assist in clarifying any ambiguity about the primary judge’s reference to that figure vis-à-vis his Honour’s reference to “penalty” concerning the imposition of indemnity costs and the amount involved. This is particularly so in circumstances where the primary judge revisited the original order more than 12 months after its making.

3. In my judgment, the de facto wife establishes that she has a substantial question to be raised on appeal given also that the question apparently involves a significant sum of money. In my judgment, it is important to emphasise that the de facto wife filed her Notice of Appeal within time and her failure is only with respect to service of her Notice of Appeal.

4. Counsel for the de facto husband sought to emphasise, in his submissions, the fact that the de facto husband has to date incurred a liability for paid, and outstanding, legal costs now totalling what seems to me to be an extraordinary amount of $715,622.94. That emphasis seemed to be primarily directed to the question of prejudice to the de facto husband of the continuation of these proceedings. However, the force of that submission rests in part on assumptions that all of the legal fees have been reasonably incurred and reasonably raised. Given the extraordinary amount involved, and the lack of readily apparent complexity of fact or law about the subject matter of the substantive proceedings as revealed in the reasons for judgment in support of the final orders made on 10 January 2018, these are not assumptions that can be made unquestioningly. When reference is also had to the fraction of that total incurred by the de facto wife for her legal fees, it remains difficult to reconcile the total amount incurred by the de facto husband.

5. The de facto husband also relied upon a report from his general medical practitioner concerning his health and the demands that continuation of these proceedings place upon the de facto husband. Undoubtedly, both parties have the stress of any continuation of these proceedings, but I do not consider that given the period involved in the delay in service and the nature of the extension of time required, that this factor outweighs the conclusion that because the de facto wife establishes an issue of substance to be raised on appeal, there ought be an extension of time.

6. Of course, it will be a matter for the Full Court ultimately determining this appeal as to whether or not the appeal has merit but at this interlocutory stage, and without a full transcript and consideration of all surrounding circumstances, the conclusion must be that there ought be an extension of time and a consequent dismissal of the de facto husband’s application for dismissal pursuant to the relevant rule. Each party’s costs of this application ought be reserved.

7. As to costs, whilst the de facto husband sought his costs of and incidental to this application irrespective of its outcome, in my judgment the question of each parties’ costs of this application falls to be considered with the substantive appeal.

8. For these reasons, I make the orders set out at the commencement of them.

I certify that the preceding fifty-five (55) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Kent delivered on 31 January 2020.

Associate: 

Date:  31 January 2020