Johansen & Babel (No. 2)
[2007] FamCA 1525
•21 December 2007
FAMILY COURT OF AUSTRALIA
| JOHANSEN & BABEL (NO 2) | [2007] FamCA 1525 |
| FAMILY LAW - APPEAL – INTERIM PROPERTY ORDERS – Whether miscarriage of justice, or denial of procedural fairness by trial Judge in determining interim property proceedings on an undefended basis - Whether trial Judge erred in ordering the sale of two properties on an interim application of the respondent wife, when orders made in the absence of the appellant husband – Whether appellant had notice of application and hearing dates –Whether trial Judge’s interim orders made in the absence of the appellant could be set aside – Consideration of Wilkes & Wilkes (1981) FLC 91-060 and Allesch v Maunz (2000) 203 CLR 172 – Where trial Judge found the appellant was served but deliberately chose to ignore proceedings – Where appellant delayed filing application after becoming aware of the orders – Where at time of appeal, the properties had been sold and proceeds preserved pending final hearing – No miscarriage of justice – No error of principle - Application for leave to appeal dismissed. FAMILY LAW - COSTS APPEAL INCLUDING APPEAL AGAINST INDEMNITY COSTS ORDER - Whether trial Judge erred in exercise of discretion in making costs orders against appellant - Where appellant breached exclusive occupation orders – Where trial Judge ordered appellant’s eviction – Where trial judge made machinery orders and enforcement orders to effect earlier orders – Where trial judge dismissed appellant’s stay application - Where trial judge made indemnity costs order in favour of the respondent in respect of the application for further enforcement and the appellant’s unsuccessful stay application – Where appellant ordered to pay party and party costs of respondent’s application for enforcement and machinery orders - No error in award of indemnity costs in the circumstances due to husband’s conduct - No error in the exercise of discretion by the trial Judge in awarding costs. FAMILY LAW - COSTS OF APPEAL – Where appellant wholly unsuccessful – Appellant to pay respondent’s costs as agreed or assessed. | |
| Family Law Act 1975 (Cth) s 79, s 117 | |
| Aarons v Knowles (1995) FLC 92-627 Yunghanns & Ors & Yunghanns (2000) FLC 93-02 |
| APPELLANT: | Mr Johansen |
| RESPONDENT: | Ms Babel |
| FILE NUMBER: | BRF | 3413 | of | 2006 |
| APPEAL NUMBER: | NA NA | 58 61L | of of | 2007 2007 |
| DATE DELIVERED: | 21 December 2007 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Boland, Thackray & O’Reilly JJ |
| HEARING DATE: | 6 November 2007 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 22 August 2007 |
| LOWER COURT MNC: | [2007] FamCA 904 |
REPRESENTATION
| ADVOCATE FOR THE APPELLANT: | Mr Johansen in Person |
| COUNSEL FOR THE RESPONDENT: | Mr M E Pope |
| SOLICITOR FOR THE RESPONDENT: | Derek & Dwyer Lawyers |
Orders
1. That the husband’s application for leave to appeal orders made by the Honourable Justice Jordan on 27 March 2007, 3 August 2007 and 22 August 2007 is dismissed.
2. That the husband pay the wife’s costs of and incidental to the application for leave to appeal as agreed, and failing agreement, as assessed under Chapter 19 of the Family Law Rules 2004.
IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Full Court delivered this day will for all publication and reporting purposes be referred to as Johansen & Babel (No 2).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE |
Appeal Number: NA 58 of 2007
NA 61L of 2007
File Number: BRF 3413 of 2006
| Mr Johansen |
Appellant
And
| Ms Babel |
Respondent
REASONS FOR JUDGMENT
Boland and Thackray JJ:
Introduction
Mr J (“the husband”) and Ms B (“the wife”) are currently engaged in litigation in the Court over the division of their property under s 79 of the Family Law Act 1975 (Cth) (“the Act”).
The application before us is an application by the husband for leave to appeal interim orders made by Jordan J on 27 March 2007, 3 August 2007 and 22 August 2007.
In summary, the husband submits he was denied natural justice, or that a miscarriage of justice occurred, when the trial Judge dealt with an interim application filed by the wife and made orders for the sale of two properties without his participation in the proceedings. The husband submits the alleged miscarriage of justice led to the making of inappropriate costs orders against him which he asserts should be set aside.
To understand the basis of the proposed appeal, it is necessary we refer briefly to the history of the proceedings to date.
In December 2006 the wife filed an application for final orders, and a separate application for interim orders in which she sought, inter alia, the sale of the parties’ former matrimonial home on the Gold Coast in Queensland (“the matrimonial home”) and the sale of a jointly owned investment property in a suburb south of Brisbane (“the investment property”).
In February 2007 the wife filed an amended application for final orders, and an amended application for interim orders. In the latter application she sought orders for the sale of both properties and that the net proceeds of sale be placed in an interest bearing account pending finalisation of the property proceedings.
The professional process server engaged by the wife’s solicitors deposed to service of the original and amended applications and other documents on the husband. We will examine in more depth, later in our reasons, the competing contentions of the parties about service of the wife’s applications. The issue of whether or not the husband had notice of the orders sought in the amended application is fundamental to the husband’s application for leave to appeal his Honour’s orders.
Before us, as before the trial Judge on 3 August 2007 and 22 August 2007, the husband was self-represented and the wife was represented by counsel.
THE LITIGATION HISTORY
The wife’s application for interim orders came before Jordan J on 27 March 2007 when his Honour made orders, on an undefended basis, for the sale of the matrimonial home, as well as orders for the sale of the investment property, and for the proceeds of sale of both properties to be invested in an interest bearing account pending determination of the property proceedings. No application for leave to appeal those orders was made by the husband within the time provided in the Family Law Rules 2004 (“the rules”) or at all. However, at the hearing of the appeal we extended time to the husband to make an oral application to seek leave to appeal those orders. The wife’s counsel agreed no prejudice was caused to the wife by us extending time.
We admitted, without objection, further evidence on the hearing of the appeal being an affidavit of the wife’s solicitor in which she deposed that the matrimonial home and the investment property had been sold, and net proceeds of $158,493.10 had been deposited into the solicitor’s trust account pending investment in an interest bearing account until the final hearing.
Although the husband did not file an application for leave to appeal Jordan J’s orders of 27 March 2007, he did file an application on 15 June 2007 in which he completed Part C of the application to the effect that he was seeking “Review of the decision of a Judicial Registrar or Registrar dated 27/3/07”.
The husband’s application came before Jordan J on 3 August 2007. His Honour dismissed the husband’s application. His Honour also made orders to enforce his orders of 27 March 2007 (orders for removal of caveats lodged over the titles of the properties by the husband) and made further machinery orders to facilitate the implementation of those orders (empowering the Registrar to sign documents to facilitate the sales, and appointing the wife’s solicitors to have the care and conduct of the sales). The proceedings were adjourned until 22 August 2007. On the weekend of 18 and 19 August 2007, the husband took up occupation of the former matrimonial home in contravention of the orders made on 27 March 2007.
On 17 August 2007 the husband filed an application in which he sought a stay of Jordan J’s earlier orders of 27 March 2007 and 3 August 2007 pending the hearing of this application for leave to appeal. His Honour dismissed that application on 22 August 2007. His Honour also made orders that the husband be evicted from the matrimonial home, that he be restrained from going to either the matrimonial home or investment property pending settlement of sales of those properties, and that a tenancy agreement in respect of the investment property be set aside and a Notice to Quit served on the tenant.
His Honour made an indemnity costs order in favour of the wife in respect of the application filed by her on 22 August 2007 and for the husband’s unsuccessful stay application. He ordered that the husband pay the wife’s costs on a party and party basis in respect of the wife’s application for enforcement and machinery orders filed on 31 July 2007.
In his proposed Notice of Appeal filed 17 August 2007 the husband sought orders “[t]hat a property settlement be made by the Court before any sale of assets occurs” and that he be permitted to “occupy my house until a final property settlement is obtained”. He also sought orders for the wife to pay “costs of defending my position”, such costs to be paid out of the wife’s final share of the property proceedings.
In light of the further evidence that completion of sale of the matrimonial home and investment property to arm’s length third parties had occurred, we raised with the husband the utility of his application for leave to appeal his Honour’s orders as it appeared to us, save perhaps for the costs orders, that any proposed appeal was rendered moot by reason of the sales, although we indicated we would, if required, consider all of the husband’s proposed grounds.
The husband articulated three matters he wished us to determine and about which he sought we make orders:
·his assertion that there had been a miscarriage of justice;
·his assertion that all costs orders should be discharged and costs determined at the conclusion of the substantive proceedings;
·that a trial date be fixed.
We explained to the husband it was not a proper matter for an appeal court to fix trial dates, and that at the determination of this appeal, the substantive application for property settlement would be listed in a Judge’s docket for hearing, or the proceedings transferred to the Federal Magistrates Court for hearing.
FURTHER BACKGROUND
The parties were married in November 2005, and separated six weeks later in January 2006. They cohabited for approximately three and a half years prior to their marriage.
In September 2004 the parties purchased in their joint names the matrimonial home, and in October 2005 the parties purchased, also in joint names, the investment property. The properties were purchased with the assistance of finance secured over both properties provided by the Colonial Bank as mortgagee. In March 2007 when the wife’s application came before his Honour the mortgage was not in arrears, but the wife asserted she did not have the capacity to make mortgage repayments.
Following the making of the orders on 27 March 2007 the wife’s solicitors forwarded a sealed copy of the orders to the husband by mail at the matrimonial home.
The wife’s solicitors wrote to the husband on 10 April 2007 and requested he confirm that he agreed with the agents proposed by the wife to sell the properties. The solicitors also sought the husband’s consent to the listing prices for the properties proposed by the wife.
As the husband did not agree to the agents proposed by the wife, nor did he nominate his preferred agents, in accordance with the orders the Chief Executive Officer of the Real Estate Institute of Queensland nominated agents to conduct the sale.
On 11 May 2007 the wife’s solicitors wrote to solicitors retained by the husband requesting his consent to agents proposed by the Real Estate Institute of Queensland. Neither the husband, nor solicitors retained by him, responded to the wife’s solicitors’ request.
Listing authorities to enable the properties to be listed for sale were signed by the Registrar on 29 May 2007.
Contracts for the sale of each property were executed by purchasers on 9 July 2007. As the husband did not sign the contracts, on 26 July 2007 a Registrar executed contracts on behalf of the husband.
On 18 or 19 August 2007 the husband, contrary to Order 5 of Jordan J’s orders of 27 March 2007, re-occupied the matrimonial home (paragraph 13 reasons for judgment 22 August 2007).
APPLICATION FOR LEAVE TO APPEAL
The principles to be applied by a Court determining whether or not to grant leave to appeal an interlocutory order are well known. An applicant seeking leave to appeal from interlocutory orders must demonstrate that there has been an error of principle, and/or that a substantial injustice to one of the parties will occur if leave is not granted (Rutherford and Rutherford (1991) FLC 92-255), or that the issue is one of general importance: Aarons v Knowles (1995) FLC 92-627.
In the State of Queensland & Anor v JL Holdings Pty Ltd (1996-1997) 189 CLR 146 Kirby J discussed the principles to be applied in applications involving proposed appeals against interlocutory procedural orders. Kirby J noted the restraint upon appellate interference with an interlocutory order. His Honour said at pages 173-174:
The bases for appellate intervention to set aside a discretionary interlocutory order have been stated many times. They include the demonstration of an error in point of legal principle which is apparent on the face of the reasons or implicit in its result; misapprehension of a fact important to the decision; failure to give weight or sufficient weight, to a relevant fact; or reaching a result which is plainly unreasonable or unjust and which demands appellate intervention. The appellate court must be careful not to convert a conclusion that the order appears to it to be unjust into a conviction that it must therefore be based upon an error of the primary judge in assigning inadequate or excessive weight to particular circumstances of the case. Special restraint will be exercised where the interlocutory order challenged is one concerned with practice or procedure. But even such orders have a capacity to affect substantive rights. The appellate court will be slow to intervene. But if it is convinced that the primary judge’s discretion has miscarried and that this has resulted in an injustice, it will be its duty to do so.
[footnotes omitted]
PROPOSED GROUNDS OF APPEAL
At the hearing of the appeal we identified with the husband the substance of his complaints about the three sets of orders made by the trial Judge. We propose to deal with the husband’s proposed grounds under the two topics then identified (the miscarriage of justice ground and the costs grounds).
THE ORDERS THE SUBJECT OF THE APPEAL
To properly understand the husband’s application it is useful we set out those parts of the orders relevant to the proposed appeal:
Orders of 27 March 2007
1. The dwellings at [the matrimonial home], and [the investment property], be sold in the following manner:-
a) The properties shall be listed for sale by private treaty with a real estate agent agreed to by the parties and, failing agreement, nominated by the Chief Executive Officer of the Real Estate Institute of Queensland or his nominee.
b) The properties be listed for sale at a price as agreed between the parties and, failing agreement, as nominated by the Chief Executive Officer of the Real Estate Institute of Queensland or his nominee.
c) The parties accept the advice of the Chief Executive Officer of the Real Estate Institute of Queensland or his nominee as to the acceptance of a reasonable price lower than the price nominated in paragraph b) above.
d) The parties accept an offer for the purchase set out in b) or c) above, execute the contract of sale, co-operate with the agent in relation to the sale of the properties, including making keys available, allowing inspection of the properties and allowing inspection at all reasonable times as requested by the agent and ensuring that the properties are in a neat and clean condition at the time of the inspection by prospective purchasers.
e) Execute any and all other documents necessary to complete the sale of the properties.
f) In the event the properties are not sold by private treaty within a period of 60 days, then:-
i)The properties shall be listed for sale by public auction with a real estate agent agreed between the parties and, failing that agreement, as nominated by the Chief Executive Officer of the Real Estate Institute of Queensland or his nominee.
ii)The parties shall agree on a reserve price as between the parties and, failing agreement, the reserve price shall be fixed by the Chief Executive Officer of the Real Estate Institute of Queensland or his nominee.
iii)The parties shall execute all documents requested by the auctioneer for the sale of the properties by auction.
iv)The parties shall ensure that the auction takes place within 60 days after the sale by private treaty.
v)The parties shall accept any offer at or above the said reserved price, and in so doing accept the advice of the Chief Executive Officer of the Real Estate Institute of Queensland or his nominee as to the acceptance of a reasonable price lower than the said reserve price.
vi)Execute the contract of sale.
vii)Co-operate in every way with the said agents in relation to the sale of the properties, including making keys available, allowing inspection of the properties at all reasonable times as requested by the agent and ensuring that the properties are in a neat and clean condition at the time of the inspection by prospective purchasers.
viii)Execute any and all other documents to complete the sale of the properties.
g) If either of the parties fail, refuse or neglect to sign within 14 days any documents necessary to sell the properties either by public treaty or by auction, then the Registrar of the Family Court of Australia at Brisbane and/or the Registrar of the Federal Magistrates Court at Brisbane (should the matter be transferred), is hereby authorised to sign any such documents and all such things on behalf of the party in default at his/her costs.
2. The nett proceeds of sale be retained in an interest bearing account to be held on behalf of both parties pending finalisation of the property settlement proceedings.
...
5. The wife be granted sole use and occupancy of the property at [the matrimonial home] from the date of listing for sale until settlement.
IT IS FURTHER ORDERED THAT
6. The Application for Final Orders be listed in the Trial Notice List at a date to be advised.
Orders of 3 August 2007
1. That the Husband’s application filed on 15 June 2007 be dismissed.
2. That the Registrar of the Family Court of Australia at Brisbane and/or the Registrar of the Federal Magistrates Court at Brisbane (should the matter be transferred) be authorised to sign Withdrawal of Caveat Forms and any other documents necessary to remove and/or withdraw the Caveats, being Caveat No [omitted] over the property at [the investment property] dated 6 July 2007 and Caveat No [omitted] over the property at [the matrimonial home] dated 5 July 2007, for and on behalf of the Caveator [the husband].
3. That the Registrar of the Family Court of Australia at Brisbane and/or the Registrar of the Federal Magistrates Court at Brisbane (should the matter be transferred) be authorised to sign any documents necessary and incidental to the sale and conveyance of the properties for and on behalf of the Husband at his costs.
4. That Derek & Dwyer Lawyers be appointed solicitors on behalf of the parties in relation to the conveyance of both properties and in relation to the nomination of a bank account in compliance with paragraph 2 of the Order of Justice Jordan dated 27 March 2007.
5. That paragraphs 1, 2, 3, 5 and 8 of the Wife’s Application filed on 31 July 2007 be adjourned for further hearing to 9.30 am on 22 August 2007 before the Honourable Justice Jordan.
6. That costs be reserved.
IT IS DIRECTED
7. That a transcript of these proceedings be made available to the parties.
[original emphasis]
Orders of 22 August 2007
1. That the Husband’s stay application filed on 17 August 2007 be dismissed.
2. That a mandatory injunction issue requiring [the husband], to forthwith vacate the dwelling at [the matrimonial home], by no later than 24 August 2007 and in default of [the husband] so vacating the said property, that the Marshal, Deputy Marshal and all officers of the Federal Police and State and Territory Police take such action as may be required to forthwith remove the said [the husband]from the said dwelling.
3. That a mandatory injunction issue restraining [the husband], from entering or re-entering the dwellings at [the matrimonial home] and [the investment property], until the completion and finalisation of the conveyances and settlements relating to the sales of those properties.
4. That a mandatory injunction issue restraining [the husband], from going within 100 metres of the dwellings at [the matrimonial home] and [the investment property], until the completion and finalisation of the conveyances and settlements relating to the sales of those properties.
5. That the General Tenancy Agreement in Form 18A entered into between the Husband as Lessor and [SP] as Tenant dated 28 February 2007 be set aside.
6. That the Registrar of the Family Court of Australia forthwith execute a Notice to Quit to [SP] in accordance with Annexure “A” to the Wife’s Application in a Case filed 31 July 2007.
7. That the Husband pay to the Wife all costs necessarily incurred, including legal fees and outlays so necessitated by the Wife’s solicitors to prepare the Withdrawal of Caveat forms, to draw and engross the Withdrawal of Caveat forms and to attend upon the Registrar to execute same and all costs necessarily incurred to lodge same at Brisbane Titles Registration at the Department of Natural Resources and Water.
8. That Derek & Dwyer Lawyers, the solicitors appointed by the Court by Order of 3 August 2007 to proceed with the conveyances of the properties at [the matrimonial home] and [the investment property], be at liberty to secure settlement of any such contracts for sale forthwith.
9. That the Husband pay the Wife’s costs of and incidental to the Wife’s Application in a Case filed on 22 August 2007 and the Husband’s Application in a Case filed on 17 August 2007 on an indemnity basis.
10. That the Husband pay the Wife’s costs of and incidental to the Wife’s Application in a Case filed on 31 July 2007.
IT IS DIRECTED
11. That a transcript of today’s proceedings be prepared and provided to the parties.
THE MISCARRIAGE OF JUSTICE GROUND
While the husband raised at the hearing of the appeal a number of asserted irregularities or “breaches” by the wife in carrying into effect the trial Judge’s orders, he conceded before us that the predominant issue he wished to agitate was his assertion that the making of the orders of 27 March 2007 in his absence resulted in a flawed process thereafter, and that the orders for the sale of the properties precluded him from retaining those properties as part of his final property entitlement.
When the matter commenced before the trial Judge on 27 March 2007 the wife’s solicitor referred to the circumstances in which the manner came before the Court as follows:
...
Your Honour, I would be relying on the amended form 1 and 2 and financial statements and there’s an affidavit of service, your Honour, of a [KM] which was filed on 18 March ’07.
Essentially what’s happened, your Honour, is the wife’s made application for some property settlement orders and on each occasion when [the husband] has been served he’s ignored and has been totally uncooperative. He failed to attend the last case session conference and the matter was before Sturgess R who listed it before you this morning.
At that time Sturgess R required me to again serve [the husband] personally, which I did, with a letter as well and all the amended documents and that was done and that’s reflected in the affidavit of [KM]. I do actually have separate affidavits of service on [sic] [KM] for each occasion if your Honour - - -
HIS HONOUR: Yes.
MS DEREK: - - - wants me to file those as well by leave for the sake of completeness.
HIS HONOUR: Thank you.
MS DEREK: On each occasion he has thrown the documents in the wheelie bin and essentially, your Honour, we’re seeking some orders.
The parties are separated, they separated in January ’06, they’ve been together since April ’02 and they’re living separate though apart under the same roof in somewhat difficult circumstances. My client’s affidavit, your Honour, filed 15 February to some extent gives details of the difficulties she’s encountered. In a nutshell there’s [sic] been circumstances where [the husband] has had the power cut off and purchased a generator for the purposes of running his pool until my client actually- - -
COURT OFFICER: Your Honour, [the husband], has been called thrice outside the Court, no appearance.
(transcript 27 March 2007, p 1)
The trial Judge having read the documents before him delivered reasons for judgment. It appears those reasons were not taken out, and they are not in the appeal book.
Critically amongst the documents before his Honour was an affidavit of service sworn on 15 March 2007 by the process server, Mr [KM], instructed by the wife’s solicitors. Mr [KM] deposed to forwarding two letters to the wife’s solicitors in which he set out details of his conversations with the husband on 13 December 2006 and 15 February 2007. He further deposed:
On both occasions, the Respondent Husband has told me that he is not interested in the Family Law documents and he has told me to “leave them there”. On the first occasion I left the documents on the ground and he rode away on his motorcycle. On the second occasion, I placed them at his feet and I saw him pick up the documents and place them in a rubbish bin. He then departed in a motor vehicle.
In annexure KM1 to his affidavit, Mr [KM] set out in a letter to the wife’s solicitors the contents of his conversation with the husband on 13 December 2007 and the manner in which the documents were served as follows:
I said “Are you [the husband]?”
He replied “Yes.”
I said “I have some family law documents for you.”
He replied “I am not interested in them.”
I said “I am required to leave them and I will put them at your feet if you will not take them.”
He replied “Yes, leave them there I am not interested.
The documents were then placed on the ground at [the husband’s] feet and he rode off on his motorcycle.
Annexure KM 2 to his affidavit was Mr [KM’s] letter to the wife’s solicitors which was in the following terms:
On 15th February 2007 at 8.00am we attended at the given address. We waited until 9.25am when the front gate opened and we approached [the husband] who we recognised from a previous service of this matter. We then asked “Are you [the husband] the person referred to in these family law documents?” He replied “Yeah, just leave them there, I don’t want them.” The documents were then placed down in [the husband’s] presence. We also brought to [the husband’s] attention that we were also delivering a letter from Derek & Dwyer Lawyers specifying the orders made by the Registrar. [The husband] then picked the documents up and put them in the bin. He then departed in a Silver Ford registration [omitted].
The husband acknowledged before us that, on 4 April 2007, he received from the wife’s solicitors a sealed copy of the orders made by his Honour on 27 March 2007. He said that he had instructed solicitors to make an application to the Court in respect of the orders, but notwithstanding his instructions he had eventually filed his own application on 15 June 2007.
In his affidavit affirmed 14 June 2007, the husband, when referring to the wife’s application, said:
28.I now know that the Applicant Wife had material filed in the Family Court in December 2006 and subsequently amended that material in February 2007. At no time was I ever aware that any Family Court proceedings had been issued in this matter.
29.I always expected that a conference would be conducted before proceedings were issued.
30.I was never served with a copy of the domestic violence order made in [a suburban] Magistrates Court on 9 August 2006 and I now understand that when I was approached by an individual who advised me that he was ‘from the Court’ and had some papers for me, those papers must have been Family Court proceedings. When I was approached however, because the man stated that he was ‘from the Court’ I assumed that the papers related to the domestic violence proceedings which had already been concluded and I advised him that I was not interested.
The husband asserted before us that, because of the serious consequences of the trial Judge’s orders, in order to provide procedural fairness to him, the proceedings on 27 March 2007 should have been adjourned or stood down and telephone communication made to him to advise what was being sought in the Court, or that he should have been served with Court documents by mail.
The Family Law Rules 2004
Chapter 7 of the rules deals with service of documents. Rule 7.03 provides that an application for final orders and an application in a case must be effected by special service. How special service is effected is set out in Rule 7.05 as follows:
Rule 7.05 Special service
A document that must be served by special service must be personally received by the person served.
Note For proof of service, see Part 7.4.
This mode of service is to be contrasted with the more prescriptive mode of special service by hand as provided in Rule 7.06 which is required for service of applications such as contravention and contempt applications. Although not strictly relevant to this appeal, we set out Rule 7.06 as it is apparent from the affidavit of service of Mr [KM] that the more stringent requirements of personal service by hand were effected in this case.
Rule 7.06 Special service by hand
(1) A document to be served by hand must be given to the person to be served (the “receiver”).
(2) If the receiver refuses to take the document, service occurs if the person serving the document:(a) places it down in the presence of the receiver; and
(b) tells the receiver what it is.(3) A party must not serve another party by hand but may be present when service by hand occurs.
Proof of special service is established by satisfying the requirements of Rule 7.14 which is in the following terms:
Rule 7.14 Proof of special service
(1) This rule applies if a document is required to be served by special service and the applicant seeks to prove service by way of affidavit.
(2) If service was by post or electronic communication, service is proved by:(a) attaching to an Affidavit of Service, an Acknowledgement of Service signed by the respondent; and
(b) evidence identifying the signature on the Acknowledgement of Service as the respondent’s signature.
Note If a person serving a document seeks to prove service under this rule, an Acknowledgment of Service must be signed by the person served with the document. However, if the Affidavit of Service with the Acknowledgement of Service is filed by electronic communication, subrule 24.07 (4) applies to the original affidavit and the signed acknowledgment.
Rule 7.15 deals with proof of identity of the person served. It is in the following terms:
Rule 7.15 Evidence of identity
(1) A statement by a person of the person’s identity, office or position is evidence of the identity, the holding of the office or position.
(2) Another person may give evidence about the identity, office or position of a person served.
Example
A person may give evidence about the identity of another person by identifying:(a) the signature of the person served on the Acknowledgment of Service;
(b) the person served from a photograph; or
(c) the person when accompanying the process server.A judge may dispense with any requirement in the rules (see Rule 1.12).
No issue was taken by the husband before the trial Judge or before us that special service had not been effected or proved in accordance with the rules.
Discussion
As we have already indicated, we do not have the benefit of his Honour’s reasons for judgment of 27 March 2007, and somewhat unusually on 3 August 2007 rather than formally delivering oral reasons, his Honour directed that a copy of the transcript of the day’s proceedings be taken out and that his decisions as appearing in the exchanges between himself and the husband should constitute his reasons.
On 3 August 2007, his Honour referred to service of the documents on the husband in response to the husband’s complaint about the orders of 27 March 2007 as follows:
[THE HUSBAND]: Yes, your Honour, but it goes back to the original order. I never [sic] about them.
HIS HONOUR: Yes, you declined to accept service of documents so you didn’t- - -
[THE HUSBAND]: Well that’s what the service says in this affidavit.
HIS HONOUR: Yes.
[THE HUSBAND]: That’s quite wrong.
HIS HONOUR: No. That’s right, you said in your affidavit, you said you mistakenly thought it was something about domestic violence.
[THE HUSBAND]: That’s correct. Yes.
HIS HONOUR: So again that was your decision and a very poor decision for which you are now suffering but that is the starting point that – the Court process can’t stop because somebody refuses to receive documents. If that was all people needed to do to frustrate legal process, we’d never get beyond the initial stages.
(transcript 3 August 2007 p7-8)
The inability of the Family Court and the Federal Court, as courts created by statute, to set aside regularly entered orders, excluding ex-parte orders or orders where the application which led to the orders being made was not drawn to the attention of the respondent, are subject of authority (see DJL v The Central Authority (2000) 201 CLR 226). Accordingly, we turn now to examine whether the circumstances in which the orders were made in this case fall within the narrow category of cases, which we discuss below, where it is possible and appropriate for orders to be set aside rather than being the subject of an appeal (or as in this case an application for leave to appeal).
That a court can set aside an order which has been made in a party’s absence at a hearing of which that party has no notice is not a matter of dispute (see Taylor v Taylor (1978-1979) 143 CLR 1). Further, a wider interpretation of the right to have an order set aside was considered by the Full Court in Wilkes & Wilkes (1981) FLC 91-060. Fogarty J in that case discussed the wider interpretation in relation to s 79 proceedings in circumstances where the wife had notice of the proceedings, had corresponded with the Court seeking an adjournment, but did not formally apply for such adjournment notwithstanding she was notified of the hearing date of the final property settlement hearing, and orders were made in her absence.
Emery SJ and Fogarty J held that where orders had been made in a party’s absence, the proper course was not an appeal against those orders, but an application to a Judge at first instance to set aside the orders.
It appears to us from our examination of the transcript that the husband’s application, which he designated on his application as a review of a Judicial Registrar or Registrar, whilst formally deficient, was in substance an application to set aside the orders made in his absence.
In Wilkes Fogarty J (with whom Emery SJ agreed) reviewed a number of common law decisions where courts had set aside regularly entered orders made in the absence of one party. His Honour concluded at 76,484 that the statement of principle should not be unduly restricted to “the question of the fault of the absent party and that it is preferable to adopt the wider formulation”. His Honour explained that the “court has a general power to review as a matter of natural justice orders made in the absence of a party and, if it considers it appropriate, order a re-trial upon conditions as to costs or otherwise”.
However, his Honour qualified his remarks by referring to matters a Judge would take into account in the exercise of his or her discretion to set aside orders including:
·the whole of the relevant circumstances including the need to end the litigation;
·the reason proffered for non appearance of the other party in question;
·delay in bringing the application;
·any prejudice to the other party which could not be adequately compensated for by an order for costs; and
·whether there appeared to be a real issue to be tried on the merits.
Emery SJ and Fogarty J said that, although the application was one which should properly have been brought at first instance, it could be determined on appeal. Their Honours refused, however, in the exercise of their discretion, to set aside the trial Judge’s orders.
Before the trial Judge on 3 August 2007 counsel for the wife submitted that there was no power for his Honour to set aside his order (it would appear his Honour was not referred to the decisions in Taylor, Wilkes or Allesch v Maunz (2000) 203 CLR 172; (2000) FLC 93-033).
Kirby J’s remarks in Allesch about the right of a party to participate in proceedings are particularly apposite to this case. His Honour said:
38.…Having regard to the circumstances in which the initial proceedings took place in the absence of Mr Allesch (the appellant), it is worth emphasising that the principle just described does not require that the decision-maker actually hear (or receive the submissions of) the party potentially liable to be adversely affected. Sometimes, through stubbornness, confusion, misunderstanding, fear or other emotions, a party may not take advantage of the opportunity to be heard, although such opportunity is provided. Affording the opportunity is all that the law and principle require.
39.Decision-makers, including the courts, cannot generally force people to protect their own rights, to adduce evidence or other materials, to present submissions or to act rationally in their own best interests. This consideration may be especially relevant in relation to the Family Court where emotions, often engendered by the highly personal issues involved, can sometimes cloud rational thought.
40.Nor are courts obliged to delay proceedings indefinitely because one party, although proved to be on notice of the proceedings, refuses or fails to appear in person or to be represented by a lawyer or some other individual permitted to speak for them who can explain the need for an adjournment. The rights of other parties are commonly involved. In the Family Court, the rights of non-parties (especially children) may be affected. Additionally (as this Court has itself accepted), the rights of the public in the efficient discharge by courts of their functions must be weighed against unreasonable delay in concluding litigation.
41.Nevertheless, mistakes occur. In legal proceedings, they sometimes occur because of defaults on the part of lawyers which, in a particular case, ought not to be visited on an innocent client…
[footnotes omitted]
His Honour further referred, under the heading “The dual considerations for reopening: explanation and utility”, to the authorities which discuss the relevant principles and said:
47.It has been suggested that there is a particular rule that governs the setting aside of a judicial order made in the absence of a party (or perhaps a witness) where that absence is adequately explained and promptly brought to the notice of the court concerned. In such a case it is said justice ordinarily “demands” a rehearing.
48.I am not inclined to approach the matter as if a special rule of law, universally applicable, solves the problem presented by every such case. First, the ultimate duty of a court, where a legislative provision exists which governs the circumstances of reopening, is to conform to that provision. The court must endeavour to fulfil the expressed requirements and the implications derived as to the purposes for which the power has been provided. Secondly, the considerations that inform a decision permitting, as here, repair of a “miscarriage of justice” are so many and varied that it is impossible to narrow them down to the “demands” of a single consideration unless it be that connoted by the very phrase used in the statute itself. Thirdly, it is desirable, as it seems to me, to treat the considerations applicable to such decisions conceptually and to classify them as impinging upon the two criteria that have for a very long time been viewed as critical to an affirmative decision to set aside a judicial order made in default of the apearance [sic] of a party. These are: (1) that an explanation, reasonable to the circumstances, is provided for the party's absence or other default; and (2) that the party in default has a material argument which, if heard and decided on its merits, might reasonably affect the determination of the rights and duties of the parties in a way different from that in the impugned order.
49.If no reasonable explanation is given for the default, it is not an injustice to deny the party in default a second opportunity to be heard. That opportunity is taken to have been waived or forfeited. Nowadays, the consideration of the reasonableness of an explanation will take into account the legitimate interests of any other party affected by the court's order (including any innocent third parties) as well as the general public. The interests at stake include a general respect for the finality of judicial orders and for the efficient management of judicial proceedings that is consistent with their fundamental objectives, including the attainment of justice.
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.
[footnotes omitted]
Our examination of the transcript of 3 August 2007 discloses that, in rejecting the husband’s application to set aside the orders, his Honour considered:
·that the husband had declined to accept service of the documents;
·the husband’s proposal that he pay out the mortgage pending final hearing, but that he did not wish to deposit $100,000 into a trust account pending finalisation of the property proceedings out of which the wife’s entitlements could be satisfied;
·that the wife’s solicitors had corresponded with the husband’s solicitors on the record at the time to seek the husband’s consent to appointment of agents;
·that by August, 2007 there were arrears in respect of mortgage payments;
·that there were two bona fide purchasers who had exchanged contracts executed on the husband’s behalf by the Registrar;
·that the contracts were legally binding;
·the delay by the husband from the making of the orders on 27 March 2007 to 15 June 2007 when he filed his application;
·that there had been compliance with the orders; and
·that the purchase price obtained for the properties exceeded the husband’s valuations.
We accept it was open on the evidence before his Honour to prefer the evidence of the process server as to service of the wife’s applications to that contained in the husband’s affidavit. We are satisfied that the trial Judge did not err in finding that special service was effected on the husband, and that he deliberately chose to ignore the proceedings. (transcript 3 August 2007 page 8).
We are also satisfied that the trial Judge considered the merits of the husband’s submissions that the orders should be set aside because he had a proper case to be heard on the merits. In rejecting the husband’s application his Honour took into account the matters we have set out above, and in particular that contracts for both properties had been exchanged.
We can see no practical utility in setting aside the August 2007 orders, given that contracts for sale to bona fide purchasers have been exchanged at values higher than those contended by the husband. In refusing to set aside the orders, his Honour was also entitled to take into account the delay by the husband in filing his application after becoming aware of the nature of the orders. His Honour was also entitled to take into account the fact that by that stage the husband had allowed the mortgage to fall into arrears. The exercise of discretion by the trial Judge may well have been different if the husband had brought the matter back to the Court promptly after receipt of the sealed orders on 4 April 2007.
PROPOSED APPEAL AGAINST THE COSTS ORDERS
The trial Judge made three orders in respect of costs and expenses incurred by the wife. In Order 7 of the orders made 22 August 2007, his Honour provided that the husband pay to the wife all costs necessarily incurred by her, including legal fees and “outlays” incurred by the wife’s solicitors in preparing withdrawals of caveats.
The trial Judge also ordered the husband to pay the wife’s costs of and incidental to her application filed on 31 July 2007 on a party and party basis. In that application the wife sought orders to set aside a tenancy agreement entered into by the husband and a tenant of the investment property without her knowledge or consent. She also sought orders that, pending completion of the sale of the properties, the husband should make mortgage payments. The wife further sought orders that the Registrar be empowered to sign Withdrawal of Caveat forms in respect of caveats which the husband had lodged against the titles to the properties, as well as any other documents required to complete the sales, and that the husband pay her costs on an indemnity basis.
The trial Judge also ordered that the husband pay the wife’s costs of and incidental to her application filed on 22 August 2007 and in respect of the husband’s application filed 17 August 2007 on an indemnity basis. The nature of those applications is set out in the trial Judge’s reasons for judgment of 22 August 2007. The husband sought a stay of the orders of 27 March 2007 and 3 August 2007 “pending the hearing of an appeal”. The husband also sought orders that no assets be sold pending a final hearing, and that he be permitted to occupy the matrimonial home pending the final hearing.
The trial Judge noted that in her application filed in Court that day the wife sought orders relating to the “occupation and/or control over the [matrimonial home]” (judgment paragraph 2).
Before us the husband identified his challenge to the trial Judge’s costs orders was made on two bases. First, he asserted that the orders for the sale of the properties were flawed on the basis those orders were made without an opportunity for him to be heard, and therefore there was no foundation for the costs orders made. Secondly, he asserted that trial Judge erred in the exercise of his discretion in making the costs orders.
As we have found no merit in the husband’s proposed grounds of appeal directed to procedural fairness or miscarriage of justice, it is unnecessary for us to consider the first basis of challenge to his Honour’s orders.
The relevant power to award costs is contained in s 117 of the Act. While
s 117 (1) provides that each party to the proceedings shall bear his or her own costs, the Court may, if it finds circumstances that justify it doing so, make an order for costs including costs on an indemnity basis.
The wide discretion available to a trial Judge in making an order for costs is discussed in Penfold & Penfold (1979) 144 CLR 311; (1980) FLC 90-800.
The power to make an indemnity costs order in an appropriate case is well recognised (see Yunghanns & Ors & Yunghanns (2000) FLC 93-029 at paragraph 29). The principles which apply to the making of an indemnity costs order are not limited to cases where fraud or collateral purpose is established against one party. What is required is that some “particular facts and circumstances of the case in question warrant the making of an order for payment of costs other than on a party and party basis”: per Sheppard J in Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 at 234. Generally the departure from the ordinary rules relating to costs will require exceptional circumstances (see Munday & Bowman (1997) FLC 92-784; (1997-1998) 22 Fam LR 321).
The trial Judge found the husband was entirely unsuccessful in his stay application. He also found the wife to have been entirely successful in her further enforcement application. His Honour said:
19....These are further enforcement proceedings following earlier enforcement proceedings following dated orders and, in that sense, these represent extraordinary proceedings. Whilst, in the ordinary course, the overriding principle which governs these matters is that each party should bear their own costs, it is quite clear that the Court takes a different view to the standard approach when parties are unnecessarily required to continually litigate to secure the fruits of earlier proper applications and to support, indeed, the orders and authority of this Court.
20.The wife was before the Court as recently as 3 August yet again seeking compliance and enforcement, and less than three weeks later she is back before the Court and again seeking relief. On this occasion, it is precipitated by the deceptive conduct of the husband, which was in direct contravention of the orders of 27 March and 3 August, and obviously in contravention of the spirit of those orders and entirely inconsistent with the outcomes ordered by this Court.
21.It would be entirely inappropriate if the wife were left out of pocket at all as a consequence of this entirely inappropriate and unnecessary exercise, and in those circumstances, having regard to the fact that, at the end of the day, there is significant property available to meet any order for costs, I further order that the respondent husband pay the wife’s costs and that he do so, having regard to my reasons in the principal judgment, on an indemnity basis, that is, costs of and incidental to the application filed on 27 August 2007 and the husband’s Application in a Case filed on 17 August 2007.
In dealing with the wife’s application filed on 31 July 2007, the trial Judge found the proceedings were necessitated by the husband’s default in facilitating the sale of the properties, but declined to make an order for indemnity costs. His Honour compared and contrasted that application with the husband’s stay application heard at the same time as the wife’s further enforcement application which applications his Honour found “included conduct which was contemptuous of the wife’s rights and contemptuous of the authority of the Court” (paragraph 25). In relation to the application filed on 31 July 2007, his Honour said “there were aspects of enforcement which were complicated as a result of machinery provisions being necessarily modified to accommodate the new set of circumstances”. His Honour thus declined to make the costs order on an indemnity basis, but found that it was appropriate that the husband pay the wife’s costs.
We are satisfied that there were circumstances which warranted the trial Judge departing from s 117(1) in respect of the costs sought by the wife.
We discern no error in the exercise of discretion by the trial Judge in awarding indemnity costs in circumstances where the husband took up occupation of the matrimonial home in breach of an order which gave the wife exclusive occupation, and where further enforcement proceedings were necessitated by the husband’s conduct.
CONCLUSIONS - LEAVE TO APPEAL
As we noted at the commencement of our reasons, the husband’s application before us is an application for leave to appeal interlocutory orders. The husband has not demonstrated error of principle by the trial Judge or that serious injustice would be caused to him, having regard to the reality of the sale of the properties, if leave was not granted. We therefore propose to dismiss the husband’s application.
COSTS
At the conclusion of the hearing we sought submissions from the parties in respect of costs of the appeal. The wife’s counsel submitted that, in the event the husband’s application was dismissed, costs should be awarded on an indemnity basis. He submitted it was appropriate to order costs on an indemnity basis as the proposed appeal entirely lacked merit. No schedule of indemnity costs sought was provided to us, although a copy of the wife’s costs agreement with her solicitors was tendered. The husband sought in the event we dismissed his application that each party pay their own costs of and incidental to the appeal.
On the limited information before us it appears that the husband’s financial circumstances are superior to those of the wife. Neither party is in receipt of legal aid. The husband has been wholly unsuccessful in his application. We accept that the husband was bona fide in bringing his application. In our view this matter is not one which falls within the extraordinary circumstances where it is appropriate to make an order for indemnity costs. However we are satisfied that the husband should pay the wife’s costs of the application as agreed and failing agreement as assessed under Chapter 19 of the rules.
O’Reilly J:
In my view there has been no error of principle, no injustice to the husband and no matter of general importance raised. In particular, the husband was served with the wife’s application for the sale of the [matrimonial home] and [the investment property] and the wife’s material relied on in support of that application and had notice of the hearing day 27 March 2007. See the affidavit of service of [KM] filed 19 March 2007 deposing to service by hand.
The husband it appears chose not to attend or be legally represented at the hearing, which resulted in the sale orders made on that date reflecting closely the orders sought in the wife’s application.
The husband contends that he had no notice of or knowledge of that application or its listing. See his affidavit filed 15 June 2007, pars 28-33. However, it appears from Mr [KM’s] affidavit that the husband discarded the documents served.
The orders made on 3 August 2007 and 22 August 2007, when the husband appeared and represented himself, were necessary to give effect to the orders made on 27 March 2007 insofar as those orders related to the sale of the properties ordered on 27 March 2007 and the necessity for there to be vacant possession of those properties for the purpose of settlement of the sale contracts.
The husband’s application filed 15 June 2007 was misconceived and properly dismissed. Leaving aside the fact that the application was seeking “Review of the decision of a Judicial Registrar or Registrar” and treating it as an application for leave to set aside the orders made on 27 March 2007 for want of procedural fairness, there was no error of principle demonstrated or injustice to the husband as the husband had been served as explained.
The husband’s application filed 17 August 2007 seeking a stay of the orders made on 27 March 2007 and 3 August 2007 also properly was dismissed there then being no appeal or application for leave to appeal on foot.
There is no basis for the husband to assert that the wife misled the Court in relation to any aspect of the matter. In particular, in her affidavit filed 15 February 2007, par 29, she conceded that the husband was making required mortgage payments.
The orders made on 27 March 2007, 3 August 2007 and 22 August 2007 were interlocutory. No arguable basis is shown to interfere with them with the result that leave to appeal them or any of them ought not be given. The husband had notice of the order made on 27 March 2007 apparently as early as 4 April 2007, and was present when the orders 3 August 2007 and 22 August 2007 were made.
As to the various costs orders made, for my part, I am satisfied that there is no basis to interfere with the exercise of Jordan J’s discretion as to costs.
The husband’s application for leave to appeal should be dismissed.
I agree with the costs order proposed by Boland and Thackray JJ, for the reasons they have given.
I certify that the preceding eighty-seven (87) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court of the Family Court of Australia.
Associate:
Date: 21 December 2007
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