Herold & Herold - [2015] FamCAFC 5

FAMILY COURT OF AUSTRALIA

HEROLD & HEROLD

[2015] FamCAFC 5

FAMILY LAW – APPEAL – UNDEFENDED HEARING – PROCEDURAL FAIRNESS – Where the husband appeals against orders dismissing his application for property settlement and giving leave to the wife to proceed on an undefended basis – Where the husband also appeals the orders for property settlement that were subsequently made – Where the gravamen of the husband’s complaint on appeal was that the trial judge failed to accord him procedural fairness by dismissing his application for property settlement and excluding him from the proceedings which were part-heard – Where the Full Court found that at the point the husband’s application was dismissed he had material before the court and had not failed to comply with any relevant procedural orders – Where the Full Court held that there had been a denial of procedural fairness – Where the Full Court further held that a rehearing would be likely to provide a more favourable result to the husband – Appeal allowed – Remitted for rehearing – Costs certificates granted.

Family Law Act 1975 (Cth)

Allesch v Maunz (2000) 203 CLR 172
Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175
Kioa v West (1985) 159 CLR 550
Re F (Litigants in person guidelines) (2001) FLC 93-072
Stead v State Government Insurance Commission (1986) 161 CLR 141
Yorston & Yorston [2013] FamCAFC 49

APPELLANT:

Mr Herold

RESPONDENT:

Ms Herold

FILE NUMBER:

PTW

3108

2010

APPEAL NUMBER:

2013

DATE DELIVERED::

21 January 2015

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Perth

JUDGMENT OF:

Bryant CJ, Strickland and Crisford JJ

HEARING DATE:

1 April 2014

LOWER COURT JURISDICTION:

Family Court of Western Australia

LOWER COURT JUDGMENT DATE:

21 November 2012

LOWER COURT MNC:

[2012] FCWA 130

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Mr Hooper SC with Ms Loukas

SOLICITOR FOR THE APPELLANT:

Dwyer Durack

COUNSEL FOR THE RESPONDENT:

Ms Farmer

SOLICITOR FOR THE RESPONDENT:

Baldivis Law & Mediation

Orders

Leave is granted to the appellant husband to amend the grounds of appeal to reflect the grounds as contained in Annexure “A” of the affidavit of Simon Shenton French filed on 26 March 2014.
The appeal be allowed.
Order 1 of the orders made by the Honourable Justice Moncrieff on 21 November 2012 dismissing the appellant husband’s application and giving leave to the wife to proceed on an undefended basis be set aside.
Orders 1 to 22 of the further orders made by the Honourable Justice Moncrieff on 21 November 2012 be set aside.
The matter be remitted for rehearing by a judge of the Family Court of Western Australia, other than Justice Moncrieff.
The Court grants to the appellant husband a costs certificate pursuant to the provisions of section 9 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant husband in respect of the costs incurred by the appellant husband in relation to the appeal.
The Court grants to the respondent wife a costs certificate pursuant to the provisions of section 6 of the Federal Proceedings (Costs) Act1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent wife in respect of the costs incurred by the respondent wife in relation to the appeal.
The Court grants to each party a costs certificate pursuant to the provisions of section 8 of the Federal Proceedings (Costs) Act1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to each party in respect of such part as the Attorney-General considers appropriate of any costs incurred by each party in relation to the new trial granted by these orders.

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

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT PERTH

Appeal Number: WA 10 of 2013
File Number: PTW 3108 of 2010

Mr Herold

Appellant

And

Ms Herold

Respondent

REASONS FOR JUDGMENT

Introduction

Mr Herold (“the husband”) appeals orders made on 21 November 2012 by which Moncrieff J dismissed his application for property settlement, allowed Ms Herold (“the wife”) to proceed on an undefended basis and provided for property settlement in the terms sought by the wife.
In the notice of appeal filed by the husband he sought leave to appeal, but that is unnecessary and the husband is able to appeal as of right.
The orders now appealed were made upon resumption of a part-heard hearing after an adjournment of two and a half months, and where the cross-examination of the husband had not concluded. The gravamen of the husband’s appeal is that the orders resulted in a denial of procedural fairness by the trial judge.
At the hearing of the appeal, counsel for the husband and for the wife both agreed that even if the Court were to find that there had been a denial of procedural fairness, no miscarriage of justice would follow such as to warrant a rehearing if the husband could not also demonstrate an arguable case that, on a rehearing, the matter would produce a different result more favourable to him. Put another way, the appeal will not be allowed and a rehearing will not be ordered if it would produce no different result, or if it would constitute an irremediable injustice to the other side, in this case the wife (see Allesch v Maunz (2000) 203 CLR 172 and Stead v State Government Insurance Commission (1986) 161 CLR 141).
Consequently, the appeal focused on two issues: whether there had been a lack of procedural fairness and, if so, whether a rehearing would be likely to produce a different result.

Background

In his reasons for judgment at [46] his Honour set out a short chronology of the marriage relationship, with which no issue was taken on appeal, and it is convenient to repeat it here:

SHORT CHRONOLOGY OF MARRIAGE RELATIONSHIP

1972 Parties married
1973Parties commence full time teaching in [northern Western Australia]
1975Parties move to Perth to undertake further studies while teaching full time
1976Parties build house in Perth and purchase and sell a second block of land in Perth
1977Parties build a holiday house in [Town X]
1978Parties move to [Town G] to teach
1979Parties move to [Town B] to teach
July 1979[Son] born: wife on maternity leave from May
1980Wife teaching part time
Sept. 1981[Daughter] born, wife teaching part time.
1981Purchased 170 acre property in [Town N]
1982Moved to [Town M]. Husband teaching full time. Wife relief teaching.
1982Sold Perth and [Town X] houses and sold 170 acre property. Purchased 200 acre property in [Town N]
1983Husband working full time. Wife teaching part time. House built on 200 acre property
1984Moved to [Town N]. Husband teaching full time. Farming business begins.
July 1984Wife returns to teaching full time.
1988/89Sold 200 acres in [Town N]. Purchased 500 acres in [Town N]
1994Sold 500 acres in [Town N] and Purchased [9] Farm Lots … [in Town Y]
1995Husband teaching 4 days per week. Wife full time
1996Husband commences teaching 3 days per week
2001Wife commences teaching 4 days per week
2003Parties purchase a block of land in [Town X]
2004Husband not teaching. Wife recommences full time teaching
2005Purchased Hobby Farm [near Town Y]. Built House in [Town X]. Husband farming full time.
2008Parties purchase an investment property [property G in Town X]
2010Parties separate
2010Sold [3] Farm Lots … [in Town Y]

Procedural history

The hearing commenced before his Honour on 7 September 2012, but was adjourned part-heard to 21 November 2012. To fully understand the context of the proceedings it is necessary to explain what occurred prior to the commencement of the hearing on 7 September 2012:
·On 4 June 2010 the husband filed an application seeking property settlement orders after the breakdown of the marriage of some 38 years. The husband sought a range of orders, the essence of which was to divide the assets between the parties as to 60 per cent to the husband and 40 per cent to the wife.
·The wife filed a response on 2 July 2010 seeking orders for property settlement such as to divide the assets as to 60 per cent to her and 40 percent to the husband.
·On 27 July 2011 the wife was given leave to proceed with the application for property settlement on an undefended basis because of the husband’s failure to comply with orders in relation to discovery.
·On 29 June 2012 the husband’s application was reinstated and the husband was ordered to file his trial affidavit, affidavits of witnesses and statement of financial circumstances within 21 days. He was also ordered to pay the sum of $5,700 to a former second respondent to the proceedings (although this order was stayed pending the final determination of the proceedings) and to pay $5,000 into the wife’s solicitor’s trust account.
·On 10 May 2012 the wife filed an amended response seeking that the “net Matrimonial assets be divided equally between the parties”.
·Ultimately on 7 September 2012 the husband sought 50 per cent of the net assets and the wife amended her position to seek 55 per cent.
It is also important to note that both at the hearing on 7 September and the resumption of the part-heard hearing on 21 November, the husband was unrepresented.
In his reasons for judgment delivered on 21 November 2012, the trial judge noted at [14]:
On 7 September 2012, which was the resumed date for the hearing, the husband sought to hand up in Court a document of some 200-odd pages as his evidence, which purported to be a trial affidavit. Notwithstanding the opposition properly raised by the wife through her Counsel … I permitted the document to be filed in Court. It was inevitable that there would be a delay in the continuation of the trial, although the trial did proceed with some very short evidence.
(our emphasis)
As is apparent from the procedural history, the matter had a chequered past and in fairness to his Honour, the husband’s preparation for the hearing was conspicuously lacking in many respects, orders for discovery not having been complied with and the husband seeking to file prolix, confused and inadmissible material. The following exchange between his Honour and counsel for the wife on 7 September 2012 demonstrates the flavour of this:
FARMER, MS:   Your Honour, in terms of the contents of the financial statement, as I say, these are print‑outs that are attached. There’s no source documents provided again. The pages of the financial statements seem to have been more or less completed and there is some information in that document that would be useful for the matter to progress. Those pages wouldn’t take very long at all and I have had an opportunity this morning to have a quick look at those.
The more substantive document, your Honour, that you have just been handed, are the affidavits. From my flick through of that document, I’m not sure that affidavit is an appropriate description of what it is, but there seems to be attached to it other affidavits in various parts, copies of court orders. There is towards the end of the document, your Honour, a section which seems to deal with offers between the parties. That, I think, is annexure E. That, of course, would have to be removed from the file or redacted in some way, your Honour, given rule 10.02 in terms of the discussions between the parties.
HIS HONOUR:   Yes.
FARMER, MS:   It wouldn’t take me terribly long, I don’t think, your Honour, to sort it out because once we take out - - -
HIS HONOUR:   What I’m going to ask you to do before I read it, given that clearly there’s a without prejudice material part of it, that I’ll give you the opportunity before I consider it further to make submissions as to what is and isn’t admissible and what I should and shouldn’t accept, but I noticed just flicking through it, and I haven’t looked at section E, that there appears to be a significant body of material that relates to applications that have already been dismissed.
FARMER, MS:   That’s the case, your Honour, and there’s also - for example flicking through this, it’s comment rather than affidavit, if your Honour understands what I’m saying in terms of these issues.
HIS HONOUR:   Yes, I do.
FARMER, MS:   In terms of whether it contains any evidence, I’m not sure from my cursory examination as to whether that’s indeed the case.
(Transcript, 7 September 2012, p. 7, lines 8 to 55)
Nevertheless as is apparent from [14] of the reasons for judgment his Honour did permit the husband’s affidavit to be filed. As his Honour also recorded in his reasons for judgment “the trial did proceed with some very short evidence”. The husband was sworn in and cross-examined by counsel for the wife. Perhaps unsurprisingly, because the 200 page affidavit had just been filed and because of the husband’s failure to give proper discovery, the cross-examination could be fairly characterised as an undoubtedly relevant but somewhat wide-ranging enquiry about the husband’s business and finances generally.
His Honour’s reasons for judgment explained that some negotiations then occurred between the parties, resulting in a minute of consent orders being prepared which dealt with the transfer of various properties between the parties on an interim basis to provide the wife with some assets pending the inevitable adjournment.
The interim property orders made by consent on 7 September provided for:
a)The interest of the husband in three pieces of property to be transferred to the wife and for the wife to indemnify the husband against any liability in relation to those properties.
b)The interest of the wife in a property known as the “House Block” to be transferred to the husband, with the husband to indemnify the wife in relation to any liabilities attaching to that property.
c)Any interest of the wife in a truck trailer and a truck dolly to vest in the husband, with the husband indemnifying the wife against a liability to the Bank of Queensland in relation to the truck and to refinance the borrowings.
d)The wife’s interest in two motor vehicles and the contents of the farm to vest in the husband.
e)The husband’s interest in a motor vehicle and the contents of property C to vest in the wife.
f)The husband and wife to do all things necessary to effect the transfers of real property.
g)The husband and wife to do all things necessary to refinance any encumbrance registered against the titles or attributed to the properties into their sole names within 90 days of receipt of a signed transfer for that property.
In addition to the interim property orders the trial judge made orders dealing with the adjourned hearing as follows:
6.The trial in this matter be adjourned part heard before the Honourable Justice Moncrieff and the matter be included in the cases awaiting allocation of a trial date, with priority and with an estimated hearing time of 3 days, to be called over on 21 September 2012 at 9:00am.
7.Each party be at liberty to file and serve any further affidavit material upon which they will seek to rely at the resumed trial, such affidavit material to be filed and served not later than 14 days prior to the adjourned hearing.
8.The Form 2 application filed by the Applicant on 29 August 2012 be and is hereby dismissed.
9. The Respondent’s costs be reserved.
(emphasis in original)
The resumption of the hearing was ultimately listed for 21 November 2012.
At the hearing on 7 September 2012, his Honour gave several cautionary warnings to the husband, saying:
Now, remember you said to me that if you had 30 days you could get yourself completely ready for this. Well, you’re going to get more than 30 days to do that. So make sure you are ready…
(Transcript, 7 September 2012, p 9, lines 39 to 42))
And further:
Now, let me make it quite clear, Mr [Herold], you’ve got plenty of time, you’ve had plenty of time. You try and file a document in under 14 days it will not be accepted for filing …
(Transcript, 7 September 2012, p 14, line 54 to p 15, line 1)
The question of valuations and the age of those obtained was also discussed, with his Honour informing the husband:
So I think, Mr [Herold], if you wish to have any issues with those valuations, then you’re going to have to address them … the ball is in your court.
(Transcript, 7 September 2012, p 10, lines 12 to 41, 31)
On 15 November 2012, the husband filed an application in a case, supported by an affidavit, seeking “an executive order” that the hearing on 21 November 2012 be adjourned until February 2013. It appears that on 20 November the husband sought to file another application in a case seeking essentially the same relief. Both applications were given a listing before the trial judge on 21 November 2012.
On 21 November 2012 the hearing resumed. The issue of the material which the husband sought to file on the previous day was the subject of discussion between the trial judge and the husband:
HIS HONOUR:       Thank you. Mr [Herold], I received some documents yesterday by fax. As I understand it, you were a teacher, were you not? … If I was one of your students and submitted that as an assignment, tell me what you would do with it, apart from not reading it? … No, Mr [Herold]. Mr [Herold], your chances have run out. I am not accepting that document.
[HEROLD], MR:     Well - - -
HIS HONOUR:       I made specific orders about the filing of documents and throughout there has been noncompliance. I’ll come to that in a minute. …
(Transcript, 21 November 2012, p 4, lines 9 to 37)
It is clear that his Honour did not accept the application which the husband had sought to file the previous day (and as it sought the same relief, encompassed the application of 15 November 2012).
His Honour then proceeded to ask the husband whether he had complied with the previous orders made on 7 September 2012. His Honour noted that the husband had not complied with the orders in relation to the truck and the debt to the Bank of Queensland (see [13] above). The husband confirmed that he had not refinanced liabilities to effect the transfer of the real estate, but submitted that the 90 day period which he then had, had not yet expired.
The husband also confirmed that he had not produced the loan application from the Bank S which had been requested on 7 September 2012. The husband said that he had asked the staff officer at the bank to email it to the wife’s lawyers. The following exchange occurred between his Honour and the husband:
HIS HONOUR:       Right. So what steps have you taken to refinance any encumbrance against the titles?
[HEROLD], MR:     At the moment I have my papers all over the place. I have ---
HIS HONOUR:       No. What steps have you taken? You either you have or you haven’t. So I’m assuming it’s none.
[HEROLD], MR:     If the 90 days is there, then I haven’t done anything at this stage because there’s a problem with the truck.
HIS HONOUR:       Right. So you’re going to fix all of that in the next 10 days, are you?
[HEROLD], MR:     I certainly am going to, your Honour.
…
HIS HONOUR:       I’m sorry, Mr [Herold], but I have had enough. I have given you every opportunity to move this matter forward and you have not taken the opportunities. Have you produced the documents that were called upon to be produced by you at the last hearing ---
[HEROLD], MR:     Yes, I ---
HIS HONOUR:        --- from the Bank of Queensland.
[HEROLD], MR:     --- went the Bank of Queensland stuff, an email to the person who has handling the case.
HIS HONOUR:       Have you produced the completed application as required? That’s a yes or no, Mr [Herold].
[HEROLD], MR:     The officer in [Town X] ---
HIS HONOUR:       That’s a yes or no.
[HEROLD], MR:     No, because I don’t have it.
HIS HONOUR:       All right.
[HEROLD], MR:     The officer has it in her office.
HIS HONOUR:       Okay.
[HEROLD], MR: That's a fact. She has the only copy of that application and I emailed a request that it be forwarded to the lawyers. That's all I could do. I don't have the copies with me. I don't have an office. I don't have those facilities with me.
HIS HONOUR:    Very well. Mr [Herold] - - -
[HEROLD], MR: So the application is done and the negotiations with the Bank of Queensland are still going on. There's a problem because of the funds. If I may explain because there's the arrears that's caused the problem.
HIS HONOUR:    Mr [Herold], there is nothing to explain. You were called upon to produce a document that you said was completed and existed - - -
[HEROLD], MR: Yes, it was.
HIS HONOUR:    ‑ ‑ ‑ and you have not done so.
[HEROLD], MR: It is done through the officer at the bank. She's the one with the only copy.
HIS HONOUR:    Why didn't she send you one? Did you ask her to?
[HEROLD], MR: I didn't think I needed it. It was there.
HIS HONOUR:    All right.
[HEROLD], MR: It was there, your Honour.
(Transcript, 21 November 2012, p 5, line 6 to p, 5(a) line 33)

After this exchange, his Honour said to counsel for the wife, ‘[d]o you have an application, Mrs Farmer?’ Counsel for the wife then submitted that:
… we’re no further forward either in terms of progressing the matter in a factual basis, that is having the orders made on the last occasion perfected, and we’re no further forward, frankly, in understanding Mr [Herold’s] position and what he’s seeking from the court … there have been many opportunities given to Mr [Herold] to get his paperwork in order and his case in order, but we’re still none the wiser following that, your Honour. I would, therefore, seek that Mr [Herold’s] application be struck out and my client again be able to proceed on an undefended basis so that there can be some finality in this matter.
(Transcript, 21 November 2011, p 5(a), lines 35 to 36, 41 to 54)
The trial judge acceded to the application of the wife and made the following orders:
1. The:
(a) Form 1 application filed by the Applicant, [MR HEROLD], on 4 June 2010;
(b) Form 2 application filed by the Applicant on 19 April 2012;
(c) Form 2 application filed by the Applicant on 15 November 2012; and
(d) Form 2 application filed by the Applicant on 20 November 2012
be and are hereby dismissed and the Respondent, [MS HEROLD], have leave to proceed on an undefended basis.
(emphasis in original)
Order 2 then recorded that “[o]rders are hereby pronounced in terms of the handwritten Minute of Orders sought handed up and filed in Court this day, a sealed type written copy of which is attached.”
The orders for alteration of interests in property under s 79 of the Family Law Act 1975 (Cth) (“Act”) were as follows:
1.        The husband’s interest in:
(a)      [Property C, Town X];
(b)      Farm Location …;
(c)      Farm Location …;
vest in and be transferred to the wife.
2.The wife’s interest in [property G, Town X] and the wife ensure that [the parties’ daughter’s] interest be transferred to the husband and the wife provide the husband with a signed transfer document within 14 days.
3.The wife assume responsibility for and refinance into her sole name, and secure against her property:
(a)      Loan … [property C loan]
(b)      Loan … [property G loan]
within 90 days of receipt of a properly executed transfer.
4.The husband ensure that any caveat or other encumbrance registered on any of the properties to be transferred to the wife (including pursuant to the consent orders of 7 September 2012) be removed at his expense within 14 days (other than the caveat lodged by [Company W]).
5.The husband refinance into his sole name or discharge and if necessary secure against the properties he is to receive pursuant to these orders and those of 7 September 2012 any overdraft, lines of credit or other liabilities in relation to the partnership of [Mr and Ms Herold], or in the husband’s sole name, and:
(a)      the ANZ overdraft …;
(b)      the CBA line of credit …
within 90 days of receipt of the signed transfer documents.
6.        In the event that the husband:
(a)does not wish to retain the properties of [property G, Town X] or Farm Location … (“House Block”) and so notifies the wife or her solicitor within 30 days; or
(b)does not effect the refinancing or discharge of the liabilities in paragraph 5 hereof within 90 days of receipt of a signed transfer document
the wife be appointed sole trustee for sale of either property in paragraph 6(a) hereof.
7.        Pursuant to paragraph 6, as sole trustee for sale the wife do:
(a)      engage a licenced real estate agent to effect the sale(s);
(b)follow the written advice of such engaged agent from time to time as to selling conditions and recommended listing price;
(c)accept such offer as may be received for any of the properties in accordance with the written recommendation of the engaged agent;
(d)execute any documents including listing authorities, offer and acceptance documents and transfers for and on behalf of herself and the husband (without need for the husband’s signature);
(e)keep the husband informed as to the progress of sale, such advice to be in writing;
(f)upon settlement, apply the proceeds of sale of each or all of the properties as follows:
(i)in payment of agents’ commission and associated costs of sale;
(ii)      in adjustment of any rates and taxes;
(iii)     in discharge or reduction of the following:
(a)      the ANZ overdraft …;
(b)      the CBA line of credit …
in such proportions as determined by the banks and/or lending institutions concerned;
(iv)the balance to the husband, pursuant to paragraph 18 hereof.
8.Notwithstanding paragraph 7 hereof, the wife ensure that 14% or such other required proportion of the sale proceeds of [property G, Town X] be paid into the self-managed superannuation fund of the husband.
9.        Any interest of the wife in:
(a)any plant and equipment (including but not limited to the Isuzu truck, trailer, dolly, harvester and front, hay baler, MacDon Swather and front, and Phillips Canola pickup front, and any miscellaneous farming plant and equipment);
(b)      the Ford tractor and/or its proceeds of sale;
(c)      the husband’s … boat and … boat hull;
(d)      the husband’s self-managed superannuation fund;
(e)the monies retained by the husband from the sale of capital items and from the farming partnership, and any other monies retained and/or utilised by him post-separation;
(f)       the husband’s inheritance from his late mother;
(g)      the partnership of [Mr and Ms Herold];
(h)      any other property of the husband
vest in the husband absolutely.
10.The husband make arrangements to collect the hay baler, the … boat and the … boat hull within 14 days of the date of these orders.
11.In the event that the husband fails to make arrangements with the wife or her solicitor within 14 days to collect the items in paragraph 10 hereof, the wife be at liberty to sell those items for the best achievable price and apply such proceeds to the liability for the boat hull namely ANZ loan … and otherwise remit the balance to the husband.
12.      Any interest of the husband in:
(a)      the wife’s … superannuation fund;
(b)any other property in the name or possession of the wife (subject to these orders)
vest in the wife absolutely.
13.The husband forthwith indemnify the wife and keep the wife indemnified in relation to all liability that may attach to any item pursuant to paragraphs 4 and 9 hereof including but not limited to:
(a)      ANZ overdraft …
(b)      CBA line of credit …
(c)      liability for the boat ANZ loan ...
14.In the event that the wife has any taxation or other liability in her name arising from the partnership of [Mr and Ms Herold] the husband pay and indemnify the wife in relation to that liability, and any other liability of the business.
15.      The husband be restrained by injunction from:
(a)annoying, molesting, harassing or otherwise interfering with the wife and her manner of living;
(b)communicating with the wife other than through a lawyer or other representative nominated by the wife;
(c)attending or approaching the wife’s home (currently [property C, Town X]) or coming within 400 metres of that home (unless otherwise agreed for the purpose of collection of the boats pursuant to paragraph 10 hereof);
(d)contacting the wife’s workplace or colleagues or family members.
16.Each party have liberty to apply at short notice in relation to the implementation or enforcement of these orders.
17.Notwithstanding these orders, pursuant to section 106A of the Family Law Act the Principal Registrar or such other judicial officer appointed by him execute the transfers or other documents required to give force to these orders and do all acts and things necessary to give validity and operation to those documents.
18.The wife be at liberty to pay from the proceeds of sale pursuant to paragraphs 7 and 11 hereof such sums of money as are due and owing including:
(a)      $250 pursuant to Court orders made on 16 March 2012;
(b)$5,700 to [the parties’ daughter] pursuant to Court orders of 29 June 2012;
(c)      any additional costs ordered in favour of the wife;
(d)any costs incurred by the wife in selling property pursuant to paragraphs 6 and 11 hereof
such payments to be made from the proceeds after the banks have been paid and before any balance is remitted to the husband.
19.The husband and the wife provide such necessary and sufficient authority as required to:
(a)remove the wife from the self managed superannuation fund, including the bank account with ANZ …;
(b)close the joint cheque account with CBA … with the wife to pay the outstanding arrears;
(c)close joint bank account CBA streamline account …;
(d)remove the husband from the trust account for the grandchild ...
and a sealed copy of these orders for sufficient authority for the husband in that regard.
20.The wife file and serve any written submissions in relation to the issue of costs by no later than 9 January 2013.
21.The husband file and serve any written submissions in response in relation to the issue of costs no later than 20 February 2013.
22.      All applications otherwise be dismissed.

The trial judge’s decision on the application of the wife to dismiss the husband’s application and for the matter to proceed undefended

Insofar as the reasons for judgment delivered on 21 November 2012 comprised his Honour’s reasons for dismissing the husband’s application and treating the matter as undefended, his Honour said:
18.Despite the orders of 7 September that if any further material was to be filed he, as well as the wife, were to file such documents and serve the same not later 14 days prior to the adjourned hearing, yesterday, by facsimile, the husband sent through what he referred to as a trial affidavit in a form that was unreadable, and, with respect, largely unintelligible, as indeed have been a large body of documents that have been produced by the husband.
19.They do not address the issues. The issues that have been clearly and squarely raised by the wife in her affidavit material in support of the relief she seeks at trial have been available to the husband for many, many months. He has been given numerous opportunities to effectively participate in these proceedings and he has not done so.
20.When the matter was before the Court on 7 September, the husband was called upon to produce documents from the Bank of Queensland, namely, a completed loan application to which he referred in his evidence. He has not done so. But, yet again, this is advanced as being the fault of a third party, despite the fact that the husband acknowledges that the document exists and acknowledges that a copy could have been sent to him, it did not occur to him, as he would put it to me, that that is what he should have sought. Enough is enough.
21.Inevitably, given the state of the evidence in this matter, the wife is not in a position to be able to effectively engage with the husband to know what the husband’s case is, to have available to her documents presented in a meaningful and orderly way that are capable of comprehension.
22.Now it seems the husband wishes to raise medical issues which he says are now going to be part of this case. If they are to be part of this case, they should have been part of this case on 7 September. If not, then the relevant affidavit material should have been filed well in advance of today in accordance with my orders of 7 September.
23.The husband says that he attempted to subpoena, it would seem, his own psychologist to produce records, but his subpoena was rejected. The subpoena was rejected as the same could not have been complied with, as drawn, and the husband would have been advised accordingly that the subpoena could not be issued in the way in which it was currently drawn. Indeed, I made that direction on 28 September 2012.
24.The husband now says he wants to seek legal advice. The husband has had the opportunity for years in the conduct of this litigation to be properly and effectively represented. If he wished to make medical evidence a part of his case, then he should have done so. If he needed to issue a subpoena to do so, then he should have sought legal advice.
25.Regrettably, the husband comes to Court on each occasion telling us what he is going to do, but then he does not do it.
26.The wife is entitled to prosecute these proceedings to a conclusion, and she is entitled to do so in a way where there has been compliance, with the obligations placed on parties under the relevant Rules of Court directed to produce effective litigation.
27.With the information that has been placed before her, the wife cannot participate with the husband or engage with the husband in any effective way, and indeed the Court struggles to understand a large body of the material that he has placed before it.
28.Previously I raised with the husband the issue of his health and that he should perhaps consider making an application for the appointment of a case guardian. I did that on 7 September 2012, in response to which he seized on that opportunity saying “Does this mean I get an adjournment?” I refused his adjournment, but in any event the matter was adjourned part-heard and the husband had ample opportunity to consider that as an option.
29.Whilst I have some concerns about the husband’s ability to engage in these proceedings, he has had sufficient opportunities to do so. I have allowed him back in. I have accepted documents that have been filed late, that have been filed in breaches of orders and that have been unintelligible. Enough is enough, as I have said, the husband’s application will stand dismissed and the wife will have leave to proceed on an undefended basis.

The appeal

At the commencement of the appeal we granted the husband, who was represented, leave to amend his grounds of appeal.
Grounds 1, 2 and 3 of the amended grounds of appeal were argued separately before us, however, in our view they overlap and amount to a complaint of a failure to accord procedural fairness to the husband by excluding him from the proceedings, dismissing his application for property settlement, and by the wrongful exercise of the trial judge’s discretion in both of those respects. The amended grounds of appeal follow:

Ground 1 – Denial of natural justice by exclusion from proceedings

1.The Learned Trial Judge failed to accord procedural fairness and/or natural justice to the Appellant on 21 November 2012 when he directed the Appellant in the following terms:
“Mr [Herold] your position is that you are not able to further participate in these proceedings as a result of orders I made for the reasons I gave, so you may sit at the bar table if you wish, but you will not be involved in the proceedings.”

and then proceeded to conduct the matter in accordance with that determination.

Ground 2 – Denial of procedural fairness by dismissal of application

2.The Learned Trial Judge failed to accord procedural fairness to the Appellant when he:
(a)dismissed the Form 1 application of the Appellant; and
(b)determined that the matter should proceed as if undefended by the Appellant.

Ground 3 – Wrongful exercise of discretion

3.The Learned Trial Judge erred in the exercise of his discretion pursuant to Rule 11.02(2) and acted contrary to law when he:
(a)dismissed the Appellant’s Form 1 application;
(b)proceeded to determine the case as if it were undefended;
(c)determined the case in the absence of the Appellant; and
(d)directed the Appellant that he was not to participate further in the proceedings.

Discussion

The grounds of appeal just outlined raise for our consideration the requirements of procedural fairness where a trial judge is considering whether to dismiss an application and then proceed on an undefended basis.
In Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 Gummow, Hayne, Crennan, Kiefel and Bell JJ observed:
112.A party has the right to bring proceedings. Parties have choices as to what claims are to be made and how they are to be framed. But limits will be placed upon their ability to effect changes to their pleadings, particularly if litigation is advanced. That is why, in seeking the just resolution of the dispute, reference is made to parties having a sufficient opportunity to identify the issues they seek to agitate.
113.In the past it has been left largely to the parties to prepare for trial and to seek the court’s assistance as required. Those times are long gone. The allocation of power, between litigants and the courts arises from tradition and from principle and policy. It is recognised by the courts that the resolution of disputes serves the public as a whole, not merely the parties to the proceedings.
(footnotes omitted, emphasis in original)
However, notwithstanding the extensive powers of case and trial management specified in the legislation and Rules of Court, there remains an obligation to ensure a fair trial and afford procedural fairness to all parties in such proceedings. In Allesch v Maunz (2000) 204 CLR 172 Kirby J held:
35.It is a principle of justice that a decision-maker, at least one exercising public power, must ordinarily afford a person whose interests may be adversely affected by a decision an opportunity to present material information and submissions relevant to such a decision before it is made. The principle lies deep in the common law. It has long been expressed as one of the maxims which the common law observes as "an indispensable requirement of justice". It is a rule of natural justice or "procedural fairness". It will usually be imputed into statutes creating courts and adjudicative tribunals. Indeed, it long preceded the common and statute law. Even the Almighty reportedly afforded Adam such an opportunity before his banishment from Eden.
36.The rule is also implicit in international principles of human rights. It is inherent in the proper conduct of judicial proceedings in a court of law. It may even be an implied attribute of the Judicature established under, and envisaged by, the Constitution. So deeply ingrained is the principle that more recent times have seen its extension, with certain exceptions, to administrative tribunals and other decision-makers. The principle governed the Family Court of Australia in determining the rights of the present parties.
(footnotes omitted)
See also, Kioa v West (1985) 159 CLR 550 at p 582, Yorston & Yorston [2013] FamCAFC 49 and Re F (Litigants in person guidelines) (2001) FLC 93-072 at [250]).
The reasons for judgment (at [18]-[29]) can be summarised as indicating his Honour was relying on the following matters when he dismissed the husband’s application and proceeded to hear the matter undefended without input from the husband:
(a)The husband had “sent through” a trial affidavit in a form that was unreadable and largely unintelligible, as were a large body of documents provided by him. This did not address the issues, nor meet the issues raised by the wife in her material. The husband had many opportunities to “effectively participate in these proceedings” and failed ([18] and [19]).
(b)The husband “yet again” blamed a third party for his failure to produce a loan application which the husband referred to in his evidence ([20]).
(c)Given the state of the evidence, the wife was not in a position to be able to effectively engage with the husband to know what his case was and to have documents presented in a meaningful way that were capable of comprehension ([21]).
(d)The husband wanted to raise medical issues and he should have raised them before 7 September and filed supporting material ([22], [23] and [28]).
(e)The husband wanted to seek legal advice but he had had the opportunity for years ([24] and [25]).
(f)The wife was entitled to prosecute proceedings to a conclusion where there has been compliance with the obligations placed on parties under the relevant Rules of Court to produce effective litigation.
(g)Whilst acknowledging concern about the husband’s ability to engage in the proceedings, the trial judge found the husband had sufficient opportunity to do so. His Honour concluded: “I have accepted documents that have been filed late, that have been filed in breaches of orders and that have been unintelligible. Enough is enough …” ([29]).

At the outset, we acknowledge the difficulties confronting the trial judge, which a perusal of the transcript of 21 November 2012 confirms. However, his Honour had on 29 June 2012 reinstated the husband’s application and he ordered him to file a trial affidavit, an affidavit of witnesses and a financial statement. His Honour had accepted the husband’s affidavit handed up at the 7 September hearing (see [14] of the reasons for judgment) so he had a trial affidavit before the Court as well as an earlier one filed in 2012.
On 7 September 2012, when the matter was adjourned part-heard, the husband was not ordered to file more material. We have set out in paragraph [14] order 7, which gave each party “liberty to file and serve any further affidavit” and provided that if they were to do so, it had to be not later than 14 days prior to the hearing.
The husband had a trial affidavit filed on 7 September 2012, and imperfect though it was, it constituted his evidence. This evidence was open to counsel for the wife to attack as being irrelevant or inadmissible, but no such application was made. Perhaps to be fair, it was pre-empted by his Honour’s invitation to seek a dismissal of the proceedings.
On 7 September 2012 there was cross-examination of the husband by the wife’s counsel before the matter was adjourned part-heard to 21 November 2012. The husband indicated that he did not intend to call “any other witnesses at this stage”. As a result, his Honour made the orders to which we have referred giving liberty to file further material.
There was therefore no justification that we can discern for finding the husband had breached an obligation to file further material. He was not obliged to do so. His Honour had by his own acknowledgment accepted the husband’s affidavit for filing on 7 September and it was before the Court. No failure to file an affidavit had occurred to suddenly render the husband’s case unsustainable.
His Honour asked the husband whether he had complied with the orders made on 7 September 2012, dealing with property. In particular, his Honour asked the husband what steps he had taken to refinance any encumbrance against the titles and the following exchange occurred:
HIS HONOUR:       No. What steps have you taken? You either have or you haven’t. So I’m assuming it’s none.
[HEROLD], MR:     If the 90 days is there, then I haven’t done anything at this stage because there’s a problem with the truck.
HIS HONOUR:       Right. So you’re going to fix all of that in the next 10 days, are you?
[HEROLD[, MR:     I certainly am going to, your Honour.
HIS HONOUR:       All right; because - - -
[HEROLD], MR:     I need to get legal advice on that and I haven’t been near legal people.
HIS HONOUR:       I’m sorry, Mr [Herold], but I have had enough. I have given you every opportunity to move this matter forward and you have not taken the opportunities. Have you produced the documents that were called upon to be produced by you at the last hearing - - -
(Transcript, 21 November 2012, p 5, lines 12 to 33)
Whilst his Honour does not appear to have placed reliance in his reasons for judgment on the husband’s failure to refinance the encumbrances (albeit the 90 day period had not expired), nevertheless in the exchange referred to above it appears that this was a matter that was in his Honour’s mind. We therefore cannot be certain that his Honour did not take it into account.
The last matter which his Honour refers to at [20] of the reasons for judgment, related to the failure to produce from the Bank of Queensland a completed loan application.
The background to this matter was that at the hearing on 7 September 2012, the husband had been asked about the whereabouts of the Isuzu truck, which he said was at the address of a friend. He was asked by counsel for the wife whether he was aware that the Bank of Queensland was currently seeking to repossess the truck, and responded that he was in negotiations with the Bank of Queensland and that “applications for loans to buy that truck are current.” Counsel asked him whether he had completed an application to the Bank of Queensland to refinance the truck and he responded that he had. He was asked whether he had a copy of the application and he said that he did not but that it existed. Counsel said “Right. Will you produce a copy Mr [Herold]?”. Further cross-examination continued and then the question of the refinancing of the truck was again raised (Transcript, 7 September 2012, p 12 to 16).
Ultimately, when it became clear that the case could progress no further, the matter was adjourned and interim orders were made (see [13] and [14] of these reasons). At that stage the following exchange between his Honour and counsel for the wife occurred:
HIS HONOUR:       Probably you would too, but are there any documents you can specifically identify that you require Mr [Herold] to produce before the resumed hearing?
FARMER, MS:       I would like to see the application to the Bank of Queensland, which is what I’ve touched on earlier.
HIS HONOUR:       Make a note of these, Mr [Herold].
FARMER, MS:       I’d like to see bank statements or computer printouts or whatever is available in relation to the new Westpac account.
HIS HONOUR:       The new Westpac?
FARMER, MS:       The new Westpac account, your Honour.
HIS HONOUR:       Westpac Bank at [Town X], yes.
FARMER, MS:       I’d like to see up‑to‑date statements in relation to the existing Westpac account and the existing BankWest account.
HIS HONOUR:       So current Westpac and BankWest, yes.
FARMER, MS:       If I could just have a moment. There was something else mentioned today. I’d like to see the communications between Mr [Herold] and his accountant.
HIS HONOUR:       Yes. I think he said they were emails, didn’t you, Mr [Herold]?
[HEROLD], MR:     Yes, I do everything by ‑ ‑ ‑
HIS HONOUR:       Yes.
FARMER, MS:       I’d like to see copies of any BAS statements that have been provided for Mr [Herold] in his role as a sole trader.
HIS HONOUR:       Yes.
FARMER, MS:       I’d like to see, your Honour - I’m not sure how we can organise this. I’d like to see the original tax invoice books in relation to the tax invoices we’ve been provided. I seek that, your Honour, because there are some gaps in terms of the copies that we have and I’d like to see the actual book itself.
HIS HONOUR:       Can I make a suggestion that each of you prepare a notice to produce.
FARMER, MS:       Yes, your Honour.
HIS HONOUR:       For the next hearing and in the meantime exchange correspondence and enumerate the documents that you wish to inspect but also do a notice to produce.
(our emphasis)
(Transcript, 7 September 2012, p 8, line 30 to p 9 line 28)
Upon resumption of the hearing on 21 November some discussion occurred regarding the production of certain documents from the Bank of Queensland. The husband endeavoured to explain to his Honour about the application from the Bank of Queensland, and we have set that out in [22] above.
Whilst we readily acknowledge that the question of the loan application to the Bank of Queensland was a live one, and relevant to the issues before his Honour, and that the wife was seeking production of it, none of the orders made on 7 September 2012 place a positive obligation on the husband to provide that document. Nor does it appear that any formal application for production of documents was made. The following exchange occurred between his Honour and counsel:
HIS HONOUR:   All right. I have a couple of quick questions, if I may. On the last occasion when this matter was before the court, you called for a completed application for the Bank of Queensland which was to be produced. Has it been produced?
FARMER, MS:   No, your Honour.
HIS HONOUR:   You also called for — I think that was the only document you called for. I’m sorry. You did make comment about the failure to produce other documents, but that was actually the only document that I have noted that you called for.
FARMER, MS:   Thank you, your Honour.
(Transcript, 21 November 2012, p 2, lines 28 to 42)
It was at this point that his Honour asked counsel for the wife if she wished to make an application to have the matter treated as undefended. In his reasons for judgment at [20] his Honour said:
When the matter was before the Court on 7 September, the husband was called upon to produce documents from the Bank of Queensland, namely, a completed loan application to which he referred in his evidence. He has not done so. But, yet again, this is advanced as being the fault of a third party, despite the fact that the husband acknowledges that the document exists and acknowledges that a copy could have been sent to him, it did not occur to him, as he would put it to me, that that is what he should have sought. Enough is enough.
It could certainly be said that the husband knew that the wife wanted production of the loan application, but his Honour had somewhat muddied the waters by suggesting they file a Notice to Produce, which had not been done. Even if the non-production of the document could be said to be the fault of the husband, a subpoena directed to the third party would have clearly elicited the information sought.
At [26] of his reasons for judgment his Honour said:
The wife is entitled to prosecute these proceedings to a conclusion, and she is entitled to do so in a way where there has been compliance, with the obligations placed on parties under the relevant Rules of Court directed to produce effective litigation.
The prosecution of the proceedings by the wife, as his Honour suggests, was not in any way impeded by the husband’s failure to produce the document from the Bank of Queensland. Indeed, his Honour went on to determine the matter without that document.
In addition, his Honour overlooked his earlier direction for the issue of a Notice to Produce to the husband, which had not been filed by the wife. The husband could rightly be confused as to what precise failure on his part led to the dismissal of his application mid-way into the part-heard hearing.
Having invited the wife to make an application, the wife’s counsel then accepted his Honour’s offer and asked that the husband’s application be struck out and that the matter proceed on an undefended basis, apparently because:
FARMER, MS: … there have been many opportunities given to Mr [Herold] to get his paperwork in order and his case in order, but we’re still none the wiser following that, your Honour.
(Transcript, 21 November 2012, p 5(a), lines 48 to 51)
It needs to be remembered that the husband had filed a lengthy affidavit just prior to the hearing on 7 September 2012 and that was the basis upon which his Honour had adjourned the matter part-heard. The question of the admissibility of that affidavit and the evidence within it had not yet been dealt with by the Court. In addition, there was other material that had been filed in the course of the proceedings and no attempt appears to have been made at any point by his Honour to identify what that material was.
The material filed by the husband may well have been deficient but he had material before the Court, and there was no particular reason why the Court could not have proceeded on the basis of that material. Any deficiency on the husband’s part would be likely to have prejudiced his case, but he did have material and an application before the Court. As senior counsel for the husband submitted to us, he had not been rude, intemperate or unreasonable in his conduct in the courtroom and although the husband was “garrulous and may have been focusing upon matters which were unlikely to assume significance in the eyes of the court” (husband’s summary of argument at [34]), his Honour was aware that the husband had difficulty in understanding and presenting material.
If his Honour had embarked upon consideration of the material that he allowed the husband to file at the hearing on 7 September 2012, it may well have been that much of that affidavit would have been struck out. It may well have been that the husband was left with little material before the Court from which to conduct his case. If so, it would have been the inevitable consequence of his failure to provide proper material but the matter could nevertheless have been conducted and the husband would have had to deal with the lack of admissible evidence as it fell. Given that the husband was not in default of any orders to file affidavit material, we fail to see why the lack of that material should lead to his application being dismissed and the proceedings being treated as undefended.
Upon the application being made by the wife’s counsel, his Honour asked the husband if there was anything further that he wished to say. The husband then advised his Honour that he had submitted a trial affidavit, that his personal circumstances were not being taken into account, including medical issues, and that he had done the best he could under those circumstances, especially as he did not have a permanent residence.
Senior counsel for the husband on appeal submitted that, in responding in the manner he did, the trial judge did not provide the husband with procedural fairness and was contrary to the course of conduct contemplated in Re F: Litigants in person guidelines. In particular, it was submitted: (husband’s summary of argument at [36]):
a)[that his Honour did not] inform the Appellant that to entertain an application of this nature during the course of a trial was unusual and a departure from the procedure contemplated when the matter was adjourned on 7 September;
b)that the nature of the application being made was not only an application to dismiss the Form 2 application for adjournment and other orders, but was also an application seeking to dismiss the Appellant’s Form 1 application and have the matter proceed on an undefended basis; and
c)that the effect of making the orders sought by the Respondent would be that the Appellant would be refused the ability to participate further in the proceedings and in particular that the Appellant may not be permitted to:
(i)give any further evidence or answer any further questions;
(ii)call any witnesses;
(iii)ask any questions of the Respondent or any of her witnesses;
(iv)make any submission to the Court about the admissibility of any evidence;
(v)make any submission to the Court as to the value or ownership of any property;
(vi)make any submission to the Court as to the appropriateness of particular orders that may be sought by the Respondent;
(vii)propose to the Court any particular orders that the Appellant thought should be made.
It is clear that his Honour did not bring any of these matters to the attention of the husband so that he could make submissions about them.
His Honour was entitled to reject the husband’s application for an adjournment and to file any further material, particularly material relating to a medical condition, and was correct in noting that the husband had ample opportunity to do so. His Honour was also within his rights to refuse an adjournment for the husband to seek legal advice. We have acknowledged the difficulty that the wife was placed in by the lack of cogent and relevant material by the husband, and the practical outcome, had his Honour proceeded without a dismissal of the application, may well have been that the husband’s case was largely unsuccessful because there was no cogent evidence on his behalf. However, that is not a reason to dismiss the husband’s application in its entirety at the point it was done and not to allow him to participate in the proceedings. In our view, there was no basis for his Honour to dismiss the application by reason of the husband’s failure to advance the appropriate evidence in a form which was readily understandable. The reasons for the dismissal of the application demonstrate a lack of procedural fairness on the part of his Honour, and we find merit in Grounds 1 and 2.
Ground 3 asserts wrongful exercise of discretion to dismiss and proceed undefended. However, as we have said above, in our view, the first three grounds of appeal overlap. Having commenced the case, having evidence from the husband before him, having dismissed the husband’s application for an adjournment, and having an explanation as to why documents were not produced by the Bank of Queensland, it was incumbent on his Honour to deal with the husband’s case on the material before him, however inadequate that material might have been. His Honour was also obliged to afford the husband the right to challenge the evidence and make submissions as to what orders the Court ought to make. Although counsel treated the grounds separately, in our view there was no more basis for his Honour dismissing the husband’s application than there was in refusing to allow him to participate in the proceedings in any other way.
Whilst counsel for the wife did not concede the grounds, she did accept that the invitation to have the matter treated as undefended came from the trial judge. She further conceded that the wife was expecting the matter would proceed on 21 November 2012, notwithstanding the deficiencies from the husband’s side. During the course of the appeal, Ms Farmer said in response to a question from the Chief Justice:
FARMER, MS: Well – well, your Honour, … There could perhaps have been other ways of dealing with the matter on 21 November.
(Appeal transcript, 1 April 2014, p 30, lines 13 to 15)
For these reasons we are satisfied that there has been a denial of procedural fairness and, that his Honour was not entitled to dismiss the husband’s application and prevent him from taking any further part in the proceedings. But as we have earlier indicated, the result of the appeal does not depend alone on a finding that there has been a denial of procedural fairness if the husband could not demonstrate an arguable case that on a rehearing or re-exercise the matter would produce a different result more favourable to him.

Would a rehearing be likely to provide a more favourable result to the husband?

As the Gummow, Hayne, Crennan, Kiefel and Bell JJ said in Allesch v Maunz:
28.… 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 the same case Kirby J said:
50.Similarly, there will be no miscarriage of justice if the party affected by the impugned order cannot demonstrate an arguable case that reopening the matter might reasonably produce a materially different result which is more favourable to that party. If the process by which that order is made is flawed, but it is not shown that the outcome might reasonably be materially different, the party offended by the process may be upset by a sense of procedural injustice. However, upon analysis, that feeling will not find reflection in the ultimate disposition of the rights and duties of the parties with which the law is finally concerned. Correction concentrates on any supposed error in the ultimate judicial orders and not exclusively on the procedures leading to, or reasons given for, those orders.
(See also Stead v State Government Insurance Commission (1986) 161 CLR 141 at 145)
It becomes necessary then to consider whether, if the matter were remitted for rehearing and the husband did participate, it would be inevitable that the same order would be made.
Having delivered his reasons as to why the husband’s application would be dismissed and he would not be able to participate further in the proceedings, his Honour then proceeded to deal with the wife’s case.

Counsel for the wife tendered an updated assets and liabilities schedule, noting “the updating effectively refers to the current values of the liabilities, which is where it differs”. It is not clear whether the husband saw this document.
Counsel for the wife and his Honour engaged in some discussion about the schedule:
HIS HONOUR: All right. So what order then is your client seeking to give effect to what she says is a just and equitable outcome?
…
FARMER, MS: Yes, your Honour. That’s a proposal that my client has set out. If my client receives her superannuation, as we flagged, the debts to her children, as we flagged, and takes on the unsecured creditors - if she also then receives [property C] with its liability shown as 377, that gives her an overall percentage - my calculation was fractionally less of 55.9 per cent of the overall pool.
(Transcript, 21 November 2012, p 11, lines 13 to 28)
After some further explanation by counsel for the wife as to the effect of the orders sought, his Honour said:
HIS HONOUR: What I’m going to suggest you do is having a look at this schedule and having a look then at the vision at 55.97 per cent to your client, which having regard to the history of the litigation in this matter and particularly the observations of the Full Court in Caris [sic] following the first instant [sic] decision of the chief judge, I am satisfied, having read the affidavit material, that that would be an appropriate outcome and I accept that I haven’t given detailed reasons in reaching that conclusion, but having re-read everything this morning, I’m satisfied that that is a just and equitable outcome in all the circumstances of this case.
What I would propose, if you would be so kind, is if you would prepare a minute that gives effect in detail to what it is that you propose - - -
(Transcript, 21 November 2012, p 11, line 47 to p 12, line 7)
In relation to s 79 of the Act, his Honour set out the law and, in particular, the fact that the Court must meet its obligations pursuant to s 79(2) of the Act to be satisfied that the orders create a just and equitable outcome for the parties. His Honour said in his reasons for judgment at [38]-[40]:
38.… Notwithstanding the fact that the husband can no longer participate in these proceedings as a result of my order this morning that does not remove from me the responsibility of making an order that is just and equitable in all the circumstances.
39.There is some difficulty in this particular case as a result of the default of the husband in meeting the obligations to which I have referred in these reasons. That difficulty really impinges upon the first step, that is to say to identify the pool of assets.
40.The difficulty there is because the parties have separated now for some two years, having separated in April 2010, there have been ongoing transactions conducted by the husband and benefits that he has received that cannot be reflected accurately by the wife in the asset pool that she submits is known, because she does not know, through the husband’s default, what has happened to various assets and where funds that have been received in the partnership previously operated by the parties have not been accounted for.
His Honour then set out (at [41) the known asset pool in accordance with the schedule tendered on behalf of the wife:

ASSET	VALUE	Liability	Net
M	[Property C]	1,000,000	377,467	622,533
Jt	[Property G]	435,000	612,992	-177,992
G	Farm Loc … (House Block)	550,000	550,000	**
M	Farm Loc …	480,000	480,000	**
Jt	Farm Loc …	387,000	387,000
Jt	Farm Loc …	200,000	200,000
M	Farm Loc …	140,000	140,000	**
M	Loc … (Hobby Farm)	390,000	293,163	96,837	**
G	Isuzu Truck	110,000	84,591	25,409	**
G	Truck Trailer E	15,000	15,000
G	Truck Dolly E	6,500	6,500
G	JD 9650 STS Harvester and Front	140,000	144,943	-4,943
G	MacDon Swather and front	110,000	82,786	27,214
G	Plant and Equipment	33,950	33,950
M	Hay Bayler	15,000	15,000	[son’s] shed
G	Phillips Canola Pick up Front E	15,000	15,000
M	… boat hull	20,000	10,128	9,872
M	… boat	1,500	1,500
G	Nissan [vehicle]	12,950	12,950	**
G	[Holden vehicle]	5,150	5,150	**
M	[Holden vehicle]	7,900	7,900	**
M	House Contents – [Property C]	20,000	20,000	**
G	House Contents - Farm	15,000	15,000	**
M	… Superannuation – [Wife]
(Gross)	120,279	120,279
Jt	Self Managed Superannuation Fund …	4,500	4,500 *[Wife] no member balance
Cash in Bank - [Ms Herold] Cash in Bank – [Mr Herold] ANZ overdraft	196,420	-196,420 *secured on farm
Jt	CBA Line of Credit	157,556	-157,556 *secured on [property C]
Add Backs	189,313	189,313
G	Ford Tractor	15000	15,000
M	Loan [P and E Herold]	160,778	-160,778
M	Loan [Daughter]	5,266	-5,266
Unsecured Creditors	66,381	-66,381
4,439,042	2,192,471	2,246,571
Assets	4,439,042	**transferred
Liabilities	2,192,471
Assets minus liabilities (NET)	2,246,571
[Husband’s] inheritance can be added	45%	1,010,957
if necessary = E 155,000	50%	1,123,286
55%	1,235,614
60%	1,347,943

His Honour noted that as far as he understood the position of the husband, at the point of separation the contribution made by each of the parties should be treated as equal. His Honour then set out a chronology and considered whether or not he should make any adjustment pursuant to s 75(2) of the Act.
His Honour appeared to rely on five separate factors to make an adjustment in favour of the wife:
1.   Failure by the husband to properly discharge obligations of disclosure (at [48]);
2.   The “frustration and obfuscation of the husband in the way in which he has conducted himself, or failed to, or only in part, comply with the obligations placed upon him by prior orders of the Court” (at [49]);
3.   The husband retained the use of the partnership equipment and partnership stock. There had been sales of equipment and stock, and income earned which were not the subject of full and frank disclosure, leaving the wife to speculate how funds had been dealt with (at [51]);
4.   The husband had a resource available to him as the result of an inheritance which had not been fully disclosed (at [53]); and
5.   In dealing with non-disclosure, the Court does not need to be unduly cautious “about making orders against the known assets in favour of … the innocent party” (see In the Marriage of Weir SM and Weir WH (1993) FLC 92-338) (at [54]).
Having found an adjustment was appropriate, the trial judge made orders as set out at [26].
Senior counsel for the husband pointed out at the hearing of the appeal that although the husband had amended his application to seek that the matrimonial assets be divided equally between the parties, the real question was what constituted the assets of the marriage. Senior counsel submitted before us:
HOOPER, MR: … Now, Mr [Herold] objected to 189,000 being added back against him, and he wanted to say something about it.
…
HOOPER, MR: … ‑ ‑ ‑ he’s there responding to a complaint that he has sold goods and hasn’t accounted for the money.
(Appeal transcript, 1 April 2014, p 9, lines 20 to 50)
In this respect, senior counsel for the husband referred to the husband’s affidavit filed on 26 June 2012. At page 4 of the affidavit, the husband responded to the add-backs sought by the wife by saying:
Add Backs as quoted by Ms [Herold]. All funds which crossed my path were disbursed in the following manner.
·Payment of Creditors, both Secured and Unsecured and “rationed”.
·My own living expenses and in the context of being devoid of a permanent residence.
·Costs associated with my Unlawful Eviction, Accommodation, Medical, etc.
·Statutory Payments for licenses, insurance, electricity.
·Business operating Expenses as they pertained to the Farmland and Machinery.
·Significant Contributions to the … portfolio, line of Credit, Mastercard.
·There was NO … and is No slush funds, no expenditure classified as Luxury or unnecessary.
In her affidavit dated 26 February 2012, the wife relied upon a figure of $180,223 as representing “Add Backs – [Mr Herold’s] post separation spending unaccounted for” (at p. 7). In the schedule handed up to his Honour, the add backs were $189,313. The husband asserted in response to the wife’s affidavit that “all funds from goods sold by me to fill the “gap” caused by her Sabotage of the Business and contrary to Court Directives are fully Accounted for on Bankwest Statement for which [Ms Herold] had full access yet continued to Mislead the court that she had no idea as to receipt and disbursement of funds.” (husband’s affidavit dated 26 February 2012, p. 4.) Senior counsel for the husband pointed out that in the husband’s affidavit “he’s there responding to a complaint that he has sold goods and hasn’t accounted for the money”. Thus, as senior counsel submitted, the asset pool included the sum of $189,000 of notional add backs which the husband disputed and which arose in the period of two years post separation, during which time the husband had to meet his own living expenses while paying other expenses. These were all matters which were before the trial judge in the husband’s affidavit but, as we have already pointed out, his Honour, somewhat inexplicably, failed to have any regard to the husband’s affidavit.
As senior counsel also submitted, the wife’s schedule included “Loan to [P and E Herold]” of $160,778. Senior counsel for the husband submitted that the wife had identified that much of the loan which “appears to have been advanced to meet her legal costs. And there’s no legal costs reflected in the other side of the equation.”
Senior counsel submitted that those two items came to something in excess of $300,000, which plainly affected the asset pool.
We are satisfied, however, by material to which counsel for the wife took us, that his Honour did not include any monies borrowed for legal fees in the add backs, or indeed at all. However, the problem which emerged was that the material that had been served on the husband indicated that P and E Herold were unsecured creditors in the amount of $95,902. A note next to that amount said “will increase, see loan agreement”. On 21 November 2012, after the husband had been informed that his Honour was going to deal with the matter on an undefended basis, counsel for the wife handed up to his Honour the final schedules and indicated that the loan had increased from $95,902 to $160,778.
The wife had not filed any affidavit evidence in relation to the loan increase and there was no other evidence which would indicate how the increase in the loan had occurred. Counsel for the wife conceded before us that the only material was a schedule the wife handed up on 21 November 2012 and also conceded that the husband would not have had any notice of the ultimate figure. Given that the loan was to relatives and, in our view, given the uncertainties around legal costs as well, it was a breach of procedural fairness for his Honour to have allowed the wife’s assertion of the loan without supporting evidence, and without notice to the husband, to be admitted and, furthermore to have taken it into account as an add back, as if it were the property of the parties for division. For that reason we are satisfied that it could not be said that if these matters were explored appropriately and the husband were able to participate in the proceedings, that the asset pool would have been as his Honour found it and, accordingly, that the orders would not be different.
There remains the question of the s 75(2) factors. His Honour’s reasons for giving the wife what was effectively a five to six per cent increase seem to be founded in [48] through to [54] of his reasons for judgment, and were summarised by us in [71] above.
Accepting that the adjustment was a relatively modest one, nevertheless his Honour also made an order for costs on an indemnity basis against the husband on the basis of the husband’s failure to disclose and his failure to meet procedural orders. Senior counsel for the husband submitted to us that, on the face of it, there appeared to be a doubling up in this respect and although the s 75(2) factors were not entirely related to the husband’s conduct in relation to the proceedings and lack of disclosure, we cannot be certain that this was not a significant factor. As it was one that was the basis for an order for indemnity costs against the husband (which is not the subject of appeal), we cannot be certain that the exercise of the discretion to award the amount to the wife in respect of s 75(2) factors was an appropriate one.

Ground 4 – The Learned trial judge made findings as to the value of property of the parties which were not supported by admissible evidence.

We have already touched on this to some extent but it seems clear that there was an updating of values in the form of a schedule without evidence to support it and without notice to the husband. In those circumstances, and with little argument from counsel for the wife, we conclude that this ground must also succeed.

Conclusion

We find, albeit somewhat reluctantly, that the husband has demonstrated that the orders made by his Honour were not inevitable were he to have participated in the proceedings and his evidence, especially the affidavit of 26 June 2012, to have been considered. We say reluctantly, because it is clear that the husband had not filed material that was helpful and there were significant deficiencies in the evidence he should have been able to put before the Court. This placed a significant burden on the wife. But there were matters that were not addressed as a result of the course taken by his Honour.
In the circumstances the appeal should be allowed and the matter remitted for a rehearing before a judge other than Justice Moncrieff.

Costs

If the appeal was successful, both counsel sought a certificate under the Federal Proceedings Costs Act 1981 (Cth) for the appeal and rehearing. In the circumstances therefore we propose to award a certificate under the Federal Proceedings Costs Act 1981 (Cth) to the parties in relation to the appeal and the rehearing.

I certify that the preceding eighty-five (85) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court delivered on 21 January 2015.

Associate:

Date: 21 January 2015