HOU & YING - [2017] FamCAFC 184

FAMILY COURT OF AUSTRALIA

HOU & YING

[2017] FamCAFC 184

FAMILY LAW – APPEAL – APPLICATION IN AN APPEAL – Extension of time in which to file a Notice of Appeal – Where the husband seeks to appeal from interim orders made 18 months prior to the filing of the Notice of Appeal – Where there is no explanation for the delay – Where the husband seeks to rely on evidence that was not before the primary judge at the time of the hearing – Where the matter is listed for final hearing in four months – Where the appeal has poor prospects of success – Application dismissed – Husband to pay the wife’s costs of the application.

Family Law Act 1975 (Cth) s 117
Family Law Rules 2004 (Cth) r 1.07

Aon Risk Services Australia Limited v Australia National University (2009) 239 CLR 175
Gallo v Dawson (1990) 93 ALR 479

APPLICANT:

Mr Hou

RESPONDENT:

Ms Ying

INDEPENDENT CHILDREN’S LAWYER:

Mark Whelan

FILE NUMBER:

SYC

2205

2015

APPEAL NUMBER:

2017

DATE DELIVERED:

1 September 2017

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Aldridge J

HEARING DATE:

1 September 2017

LOWER COURT JURISDICTION:

Federal Circuit Court of Australia

LOWER COURT JUDGMENT DATE:

3 February 2016

LOWER COURT MNC:

[2016] FCCA 172

REPRESENTATION

THE APPLICANT:

In Person

COUNSEL FOR THE RESPONDENT:

Mr Lee

SOLICITOR FOR THE RESPONDENT:

SHL & Associates Lawyers

INDEPENDENT CHILDREN’S LAWYER:

Mark Whelan

Orders

The Application in an Appeal filed on 21 August 2017 is dismissed.
The applicant is to pay the respondent’s costs of and incidental to the application as agreed or in default of agreement as assessed.
Any enforcement of the assessed costs is stayed until 22 January 2018 or further order of the Court.

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 Hou & Ying 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).

IN THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY

Appeal Number: EA 93 of 2017
File Number: SYC 2205 of 2015

Mr Hou

Appellant

And

Ms Ying

Respondent

EX TEMPORE REASONS FOR JUDGMENT

Introduction

By an Application in an Appeal filed on 21 August 2017 Mr Hou (“the husband”) seeks an extension of time in which to file a Notice of Appeal against orders made by Judge Sexton on 3 February 2016. In property proceedings between the husband and Ms Ying (“the wife”), her Honour ordered the husband to pay the wife the sum of $77,000 by way of interim costs. Her Honour also ordered the husband to pay interim spousal maintenance of $500 per week.
Since those orders were made the matter has slowly progressed to a hearing. It has also been transferred to the Family Court of Australia. On 27 July 2017 Loughnan J fixed the proceedings for hearing for four days commencing on 22 January 2018.
The Independent Children’s Lawyer was named as a party to this application notwithstanding that no parenting issues were raised. Out of courtesy to the Court he appeared today, but, on his application, was excused from further attendance.

Principles to be applied

The principles which apply to an extension of time in which to lodge an appeal are set out in Gallo v Dawson (1990) 93 ALR 479 at 480-481, where McHugh J said:
… 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: see Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1978] VR 257 at 262. 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: see Avery v No 2 Public Service Appeal Board [1973] 2 NZLR 86 at 92; Jess v Scott (1986) 12 FCR 187 at 194-5; 70 ALR 185. 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: see Burns v Grigg [1967] VR 871 at 872; Hughes, at 263-4; Mitchelson v Mitchelson (1979) 24 ALR 522 at 524. 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: Vilenius v Heinegar (1962) 36 ALJR 200 at 201. 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. As the Judicial Committee of the Privy Council pointed out in Ratnam v Cumarasamy [1965] 1 WLR 8 at 12; [1964] 3 All ER 933 at 935:
“The rules of court must prima facie be obeyed, and in order to justify a court in extending the time during which some step in procedure requires to be taken there must be some material upon which the court can exercise its discretion.”
The hearing of such an application therefore involves the exercise of discretion so as to enable the court to do justice between the parties. In doing so, the court will consider the history and conduct of the proceedings, their nature, the consequences for the parties of the grant or refusal of leave and the merits of the appeal.

Discussion

The husband’s affidavit in support of his application does not explain why he did not file a Notice of Appeal on or before 2 March 2016, which was the latest date a Notice of Appeal could be filed. Further, he gives no explanation as to why there was such an extensive delay between that date and the filing of this application.
His affidavit in support of the application does, however, mention and discuss at some length an amended child support assessment issued by the Child Support Registrar on 19 May 2017. In that assessment the wife’s annual taxable income was taken to be $55,640 per year for the next three years, namely the period from 1 May 2017 until 30 April 2020. The effect of this decision was to decrease the annual child support payable by the husband from $13,112 to approximately $10,961.
The husband submits that this finding is significant because in her reasons the primary judge rejected the husband’s contentions that the wife had understated her income. Thus he says the primary judge erroneously accepted the evidence of the wife, given in her affidavit of 21 July 2015, that her estimated income for the 2015 financial year was $18,000. This led to the finding made by the primary judge that the wife was unable to support herself from her income and was also not able to meet her legal fees.
Accordingly, I infer that the husband has brought this application in response to the amended assessment for child support from May this year. However, if that is the case the husband has not given any explanation as to the delay between receiving that assessment and filing the present application on 21 August 2017 – a delay of some three months. In the context of an appeal, three months is a significant delay because a Notice of Appeal must be filed no later than 28 days after the relevant orders were made.
I turn now to the proposed grounds of appeal.
Ground 1 is not a ground of appeal but is in fact an introduction to the other grounds.
Ground 2 asserts an error in [25] of the primary judge’s reasons, which is as follows:
25.It is submitted for the Wife that the Husband’s conduct in these proceedings has resulted in increased legal expenses for the Wife. He has changed his legal representation, failed to produce documents as required by the Rules causing the need for the Wife to obtain material by way of subpoena, and he has failed to comply with Court orders in relation to disclosure. The Wife was also required to file an application to recover [X] to her care when the Husband refused to return him to her. I find the Husband has caused the Wife’s solicitors to undertake work which could have been avoided but for the Husband’s conduct, and thereby increased the Wife’s legal costs.
(Emphasis added)
The husband asserts that the emphasised sentence is erroneous because the primary judge ought to have found that the husband was justified in retaining the child on 18 September 2015 and hence that the recovery proceedings were neither necessary nor caused by any wrongful or improper act by him.
This overlooks two matters. First, the recovery application was successful. Second, it was but one of a number of considerations taken into account by the primary judge in relation to one aspect of the application for interim costs. It is difficult to see that this ground of appeal has reasonable prospects of success.
The third, fourth and fifth grounds of appeal are based on the income reassessment of the Child Support Registrar to which I have already referred. They challenge the primary judge’s findings that the wife’s income was exceeded by her expenses, that the wife could not adequately support herself from her present income and that the husband was in a superior financial position to the wife, had access to funds to meet an interim costs order and that his conduct has increased the wife’s costs.
The primary judge recorded the husband’s submissions as to the income and assets of the wife as follows:
17.The Husband does not accept the Wife’s evidence as to her financial position. He deposes to the Wife running a very successful and profitable business in the name of ‘[Business B]’. The Husband bases his belief on the following:
a)In 2013, as a result of conversations with the Wife, he believes the Wife earned $40,000 from one client […].
b)In 2013, the Wife moved her business premises from [L Street] to a more prominent and larger location at [M Street], at a higher rent.
c)The business has increased its online marketing.
d)The Wife offers [a range of specialist consultancy services].
e)The price guide on the Wife’s [Business B] website provides that clients are charged $88 for a 35 minute consultation and $158 for a 60 minute consultation.
f)The Wife sets out service fees for [certain services], ranging from $488 to $888.
g)The Wife advertises regularly in [a local paper] and in 2014 ran a seminar […].
h)The Husband has seen a photograph of the Wife’s office whiteboard showing a list of 8 appointments for the period 23 October to 29 October 2014. The Husband then estimates the Wife’s fees for that week in the sum of between $3,668 and $5,476.
i)The Wife’s business operates on a cash basis, and she “often makes cash purchases in large amounts”. For example, he says that on 8 October 2014 she purchased an iPhone 6 for her mother. The Husband has seen the Wife and her mother in new and expensive looking clothes and says they attend hairdressers every few weeks.
j)The Wife’s mother visited Australia twice a year to help the Wife set up her business until 2013. Together they would consult clients. Since 2014, the Wife’s mother has visited Sydney 3-4 times a year and is advertised on the [Business B] websites as a specialist consultant […].
k)The Wife sent money to her mother in China.
l)[X] has been in child care from an early age to enable the Wife to work in her business, and almost every day of the week he collected [X] so the Wife could work late. Currently, the Husband deposes to [X] being in after school care until 6 p.m. so the Wife can work.
(Original emphasis)
These contentions were not accepted because her Honour was of the view that they were not supported by any independent evidence. However, her Honour considered that it may be that the husband would be able to adduce such further evidence at a final hearing. The husband does not challenge either the primary judge’s summary of his contentions or the finding that he did not adduce sufficient evidence to establish them.
The Child Support Registrar recorded the husband’s claims for a reassessment as follows (as per the original):
[Mr Hou] claims [Ms Ying]’s latest income used in the assessment, of $123, is incorrect. He believes she has a new [luxury car], but acknowledges [Ms Ying] is claiming her mother owns the car. He also notes that [Ms Ying]’s mother lends [Ms Ying] money, to be repaid at a later time.
In [Mr Hou]’s application he makes a number of claims. Those which are relevant to the Change of Assessment (COA) process are:
·He claims [Ms Ying] opened a business [Business C], together with [Business B]. He claims [Ms Ying] is the principal and manager.
·In his affidavit, affirmed 5 December 2016, he believes [Ms Ying] recently purchased a [late model luxury car]. He claims this is inconsistent with her stated earnings from her […] business. [Mr Hou] believes [Ms Ying]’s rental expense is also not in keeping with her income.
·He wonders how [Ms Ying] can afford legal fees of $1,650 based on her stated income.
·In another affidavit, affirmed 19 October 2015 [Mr Hou] refers to amounts [Ms Ying] charged for [Business B services]. He claims it operates on a cash basis and often makes cash purchases in large amounts.
Whilst I appreciate [Mr Hou]’s concerns about [Ms Ying]’s ability to generate a cash income, anecdotal evidence of such an income is insufficient to justify a finding in this regard. Compelling (and preferably documentary), evidence would be needed to support a decision which included a component for cash and I have not been able to establish these claims as fact through any of the avenues of investigation that are open to me as a delegate of the Child Support Registrar.
Two things may be drawn from a comparison between the two passages.
The first is that save for the alleged cash income from Business B, the husband’s contentions made to the Child Support Registrar are entirely different to the contentions made to the primary judge. A fair inference would be that both the wife’s involvement with Business C and the purchase of the car took place after 3 February 2016.
Secondly, the delegate of the Child Support Registrar came to the same finding in relation to any income from Business B as did the primary judge – namely, that the evidence of the husband was insufficient to establish his contentions.
Thus neither of these matters demonstrate error on behalf of the primary judge in coming to the findings on the evidence that was before her at the time.
As her Honour stressed several times during her reasons and as is apparent from the form of the orders made for both spousal maintenance and interim costs, the orders were being made on an interim basis. Interim orders may be reconsidered if there is a substantial change in circumstances that would, in all of the circumstances, justify a reconsideration. However, a change in circumstances after the orders have been appealed from does not establish that the orders from which the appeal is taken were erroneously made.
I am of the view that the chances of success on this ground are poor.
The last ground of appeal is that the primary judge was in error at [37] in finding the husband to be “financially controlling and resistant to spending any of his money on [the wife] or [the child], regularly refusing to give her money for household costs”.
There are two difficulties with this ground.
In the above passage the primary judge is recounting the wife’s submissions. The sole finding that flowed from a consideration of those submissions was that the wife was presently unable adequately to support herself, and not the finding suggested by the husband. Thus any proposed ground of appeal on this basis is misconceived.
Further, in support of this proposed ground of appeal, the ground continues “I have also provided the Court with my submissions and evidence from paragraphs 25 to 35 of my affidavits filed on 8 April 2016. These submissions clarify that during eight years of marriage I had spent a lot of money for my wife and son.”
Self-evidently, the primary judge cannot be criticised for not taking into account evidence that was filed after judgment and reasons were delivered.
In relation to all of these matters the wife submits that as the husband conceded for the purposes of the final hearing that he should pay the wife $200,000, even if the payments made pursuant to the orders under challenge were taken into account, that would still leave a sum owing to the wife. This highlights the lack of utility in the appeal.

Conclusion

I conclude that any proposed appeal has poor prospects of success. There is a very extensive and unexplained delay in bringing this application. There is no explanation as to why a Notice of Appeal was not filed in accordance with the Family Law Rules 2004 (Cth) (“the Rules”). These considerations support the rejection of the application.
A significant matter is that leave to appeal is required for these orders. Given the poor prospects of success of the proposed appeal, it is difficult to see that any substantial injustice would flow if an extension of time was not granted.
There is a further matter that is relevant and which speaks against the application’s success. The matter is fixed for a final hearing commencing 22 January 2018. As the primary judge correctly said in her reasons:
30.… The Court would review any payment made in the exercise of its discretion in the substantive property proceedings or on the final determination of the issue of costs. In any event, on the basis of the orders sought in the Husband’s Reply, any prejudice to the Husband could be remedied when final orders are made.
In light of that passage and given that it is most unlikely that any appeal against the orders of the primary judge, if an extension of time in which to appeal was granted, would be heard and determined before 22 January 2018, any appeal would appear to be otiose and a very poor use of the parties’ and the Court’s resources: Aon Risk Services Australia Limited v Australia National University (2009) 239 CLR 175 at [111]-[114]; r 1.07 of the Rules.
I am not satisfied that there should be an extension of time in which to file the proposed Notice of Appeal and the application will be dismissed.

Costs

The wife has made an application that her costs of the husband’s unsuccessful application be paid by him.
The default position under s 117(1) of the Family Law Act 1975 (Cth) is that each party is to bear his or her own costs unless there ae circumstances that justify a different order. In considering whether there are such circumstances, the Court is obliged to have regard to the matters set out in s 117(2A).
The parties have raised but two matters arising under that subsection.
The first is that, as is apparent, the application was wholly unsuccessful.
The second is that the parties each assert that they are in a poor financial position. I invited the parties to make submissions as to their respective financial positions from the bar table, but I have to confess that I found them somewhat difficult to follow.
In the child support assessment referred to in the substantive reasons, the Child Support Registrar found that the husband’s annual income was $153,211 and that the wife’s was $55,640. Thus, according to that finding, the income of the husband significantly exceeds that of the wife.

The husband accepts that he is the registered proprietor of an unencumbered home. He, however, asserts that it is owned either in whole or in part by his father, who provided, at the least, a substantial part of the deposit used for its acquisition. Whether that is so or not will be a matter for the final hearing. Having regard to the potential for all or part of that property to be included in the property of the parties to be divided, however, and having regard to the concession of the husband in the final proceedings that he should pay the wife at least $200,000, it seems that even if there is not at present the income available to meet the costs order there are assets available to meet a costs order in due course. In any event, impecuniosity is not of itself a bar to a costs order.
Justice in this case is best served by making an order that the husband pay the wife’s costs, but that the order not be able to be enforced until the final property hearing.

I certify that the preceding forty-three (43) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Aldridge delivered on 1 September 2017.

Legal Associate:

Date: 6 September 2017