Kavan and Mallery & Anor
[2015] FamCAFC 82
•11 May 2015
FAMILY COURT OF AUSTRALIA
| KAVAN & MALLERY AND ANOR | [2015] FamCAFC 82 |
| FAMILY LAW – APPEAL – JURISDICTION – Where the Federal Circuit Court of Australia made an order “remitting” property proceedings to the Supreme Court of New South Wales – Whether the Federal Circuit Court had the power to transfer proceedings to the Supreme Court of New South Wales – Where the Full Court held that the Federal Circuit Court did have the power to transfer the proceedings because the Supreme Court of New South Wales has jurisdiction in de facto financial causes by virtue of the Family Court having jurisdiction under s 39B(1) of the Family Law Act 1975 (Cth) and the operation of s 4(1) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) – Where the Full Court held that it was not necessary for the trial judge to identify the source of the power on which she relied to transfer the proceedings, but that it was necessary for the conditions required for that exercise of power to be satisfied – Where the Full Court found that conditions were satisfied in this case – Appeal dismissed. FAMILY LAW – APPEAL – COSTS – Where the Full Court held that the trial judge erred in finding that the proceedings were unable to proceed as a result of the conduct of the appellant – Where the Full Court found that the trial judge was mistaken in finding that there was an application for adjournment, or determination of such an application at the hearing at first instance – Appeal allowed – Indemnity costs orders set aside – Re-exercise of the discretion – No order for costs made – Costs certificates granted. |
| Family Law Amendment (De Facto and Other Measures) Act 2008 (Cth) Family Law Amendment (De Facto and Other Measures) Bill 2008 (Cth) Family Law Act 1975 (Cth) – ss 4(1), 31, 39, 39B(1), 39(5), 40(3) and 45(2) Federal Circuit Court of Australia Act 1999 (Cth) Federal Proceedings (Costs) Act 1981 (Cth) Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) – s 4(1) |
| ASIC v Edensor Nominees Pty Ltd (2001) 204 CLR 559 |
| APPELLANT: | Ms Kavan |
| FIRST RESPONDENT: | Mr L Mallery |
| SECOND RESPONDENT: | Mr J Mallery |
| FILE NUMBER: | SYC | 1102 | of | 2012 |
| APPEAL NUMBERS: | EA EA | 156 3 | of of | 2013 2014 |
| DATE DELIVERED: | 11 May 2015 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Bryant CJ, Finn & Strickland JJ |
| HEARING DATE: | 15 July 2014 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 2 October 2013 & 5 December 2013 |
| LOWER COURT MNC: | [2013] FCCA 2207 & [2013] FCCA 2374 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr M Kearney SC |
| SOLICITOR FOR THE APPELLANT: | Rebekah Dorter Family Lawyer and Mediator |
| FIRST RESPONDENT: | In person |
COUNSEL FOR THE SECOND RESPONDENT: | Mr J LoSchiavo |
| SOLICITOR FOR THE SECOND RESPONDENT: | HPL Lawyers |
Orders
There be leave (should it be required) to appeal Order 2 of the orders made by the Federal Circuit Court on 2 October 2013.
The appeal against Order 2 of the orders made by the Federal Circuit Court on 2 October 2013 be dismissed.
The appeal against Orders 2 and 3 of the orders made by the Federal Circuit Court on 5 December 2013 be allowed.
(4)(a) Orders 2 and 3 of the orders made by the Federal Circuit Court on 5 December 2013 be discharged.
(4)(b) There be no order for costs in relation to the proceedings heard by the Federal Circuit Court on 2 October 2013.
There be no order for costs in relation to either the appeal mentioned in Order 2 of these orders or the appeal mentioned in Order 3 of these orders.
The Court grants to the appellant a costs certificate pursuant to the provisions of s 9 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 appellant in respect of the costs incurred by the appellant in relation to the appeal mentioned in Order 3 of these orders.The Court grants to the second respondent a costs certificate pursuant to the provisions of s 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 second respondent in respect of the costs incurred by the second respondent in relation to the appeal mentioned in Order 3 of these orders.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Kavan & Mallery and Anor 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 SYDNEY |
Appeal Number: EA 156 of 2013 and EA 3 of 2014
File Number: SYC 1102 of 2012
| Ms Kavan |
Appellant
And
| Mr L Mallery And Mr J Mallery |
Second respondent
REASONS FOR JUDGMENT
These are appeals by Ms Kavan against:
· an order (Order 2) made on 2 October 2013 by Judge Henderson of the Federal Circuit Court whereby certain “property proceedings [were] remitted to the Supreme Court of NSW”; leave is sought for this appeal should it be required (EA156/2013);
· two orders (Orders 2 and 3) made on 5 December 2013 also by Judge Henderson requiring Ms Kavan to pay the costs of the first and second respondents in relation to the proceedings in which the orders of 2 October 2013 were made (EA3/2014).
The first respondent to the appeals, and also in the proceedings before Judge Henderson, is Mr L Mallery, who is the former de facto partner of the appellant.
The second respondent to the appeals, and also in the proceedings before Judge Henderson, is Mr J Mallery, who is the father of the first respondent.
Both respondents oppose both appeals.
At the hearing of the appeals, the first respondent appeared without legal representation. Prior to that hearing, he had filed a brief written summary of argument in which he stated that he had read the written submissions of counsel for the second respondent and that he adopted those submissions. However, at the hearing before us, he did make some brief oral submissions in relation to the appeal against the orders in relation to costs made on
5 December 2013.
The historical background to both appeals
The appellant and the first respondent were in a de facto relationship from February 2005 until December 2011. Two children were born to them during that time.
On 28 February 2012 the appellant filed an application in the
Federal Magistrates Court (as the Federal Circuit Court then was) seeking financial orders against both respondents, including declarations as to the ownership based on a trust, or alternatively, on an imperfected gift, of a property at Suburb M, as well as orders for the sale of that property and the division of the net proceeds of sale between the appellant and the first respondent.
On 3 May 2012 the first respondent filed a response in which he sought the dismissal of the financial orders sought by the appellant. He also sought parenting orders in relation to the two children of his relationship with the appellant.
Various amending applications and responses, both final and interlocutory, were filed by the parties prior to 11 September 2013 when the appellant filed a further amended initiating application in which, in addition to parenting orders, she also sought as against the second respondent a declaration of trust in relation to shares in a company (which owned the property at Suburb M) or in the alternative, a declaration of an equitable charge in her favour over those shares. She also sought as against both respondents a range of declarations, which were listed in the application under the headings “Estoppel” and “Quantum Meruit”, together with orders which would apparently be consequential upon such declarations and which were particularised under the heading “Further relief”.
On 27 September 2013 the second respondent filed a further amended response in which he sought the dismissal of the orders sought against him in the appellant’s further amended initiating application (filed on 11 September 2013).
The matter came before Judge Henderson on 2 October 2013 apparently for final hearing of both the parenting and property disputes. There was some initial discussion between her Honour and counsel for all three parties as to whether in light of the declarations and relief sought in the appellant’s further amended initiating application filed on 11 September 2013, the property aspect of the proceedings would be more appropriately dealt with in the Family Court or in the Supreme Court of New South Wales.
There was then an adjournment of the hearing for a couple of hours during which the parenting dispute was settled.
When the matter resumed before her Honour and after she had made the consent parenting orders, senior counsel for the appellant informed her that all counsel were of the view that the property matter would require a hearing of more than three days, and he made an oral application on behalf of the appellant that the matter be transferred to the Family Court. However, counsel for the second respondent then asked that the matter be transferred to the Supreme Court of New South Wales, with counsel for the first respondent expressing concern that if the matter was transferred to the Family Court, it might then be transferred to the Supreme Court thus causing further delay.
Her Honour proceeded on that day to deliver an ex-tempore judgment in which she determined that the property proceedings should be “remitted” to the Supreme Court. We will refer later to the reasons which her Honour gave for this decision. Her Honour’s order of 2 October 2013 “remitting” the proceedings to the Supreme Court of New South Wales is the subject of the first appeal now before us.
In her orders of 2 October 2013 her Honour also made directions for the filing of written submissions in relation to the costs of the proceedings.
On 5 December 2013 her Honour made orders requiring the appellant to pay the “costs thrown away in [the] proceedings” of the first respondent in the sum of $21,854 and of the second respondent in the sum of $20,592, with this second order being subsequently amended pursuant to Rule 16.05(2)(e) of the Federal Circuit Court Rules 2001 (Cth), to provide for a figure of $38,203.72. Again we will refer later to the reasons which her Honour gave for these costs orders, which are the subject of the second appeal now before us.
The appeal against the order transferring the proceedings to the Supreme Court of New South Wales
In her relatively brief ex-tempore reasons in relation to her order transferring the property proceedings to the Supreme Court, the primary judge outlined in some detail the many forms of relief sought by the appellant in her further amended initiating application filed on 11 September 2013, and she then stated:
15.This matter is clearly, as I see it, within the equitable jurisdiction and inherent jurisdiction of the Supreme Court. The only touching of any family law aspect of this matter is the fact that the [appellant] and 1st respondent were involved in a de facto relationship for some time.
…
18. To carry out the first step namely identify the pool of assets is one which falls outside, as I see it, the proper exercise of my jurisdiction under the Family Law Act. …
Her Honour then went on in [19] (which we will later set out) to express her concerns that because the matter needed to be dealt with “expeditiously” on account of the age and health of the second respondent, there was a risk that if she transferred the matter to the Family Court, that court might still then transfer the matter to the Supreme Court, and she concluded her reasons by saying:
20.The Supreme Court clearly has the jurisdiction to not only entertain and deal with the equitable issues, the quantum meruit claim, the estoppel argument, but also under cross-vesting legislation the family law issues and for those reasons these proceedings are remitted to the Supreme Court of New South Wales.
The power of the Federal Circuit Court to transfer proceedings to the Supreme Court of New South Wales
The first ground of appeal contained in the appellant’s further amended notice of appeal (filed on 6 May 2014) asserts that her Honour erred in making an order remitting the proceedings to the Supreme Court of New South Wales, “such power being beyond the power of a Judge of the Federal Circuit Court of Australia.”
Unfortunately the primary judge did not in her reasons identify the power on which she relied to transfer the proceedings to the New South Wales Supreme Court. Before us it was contended by senior counsel for the appellant in support of the first ground of appeal that there is no power in the Federal Circuit Court to transfer a matter to the Supreme Court of New South Wales, and in making this submission senior counsel relied on the absence of the conferral of such power in the Federal Circuit Court of Australia Act 1999 (Cth) or in the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth).
In response, however, counsel for the second respondent relied on s 45(2) of the Family Law Act 1975 (Cth) which provides (emphasis added):
45(2) Where there are pending in a court proceedings that have been instituted under this Act or are being continued in accordance with any of the provisions of section 9 and it appears to that court that it is in the interests of justice, or of convenience to the parties, that the proceedings be dealt with in another court having jurisdiction under this Act, the court may transfer the proceedings to the other court. However, this subsection does not apply to particular proceedings if:
(a)the first‑mentioned court is the Family Court and the other court is the Federal Circuit Court of Australia; or
(b)the first‑mentioned court is the Federal Circuit Court of Australia and the other court is the Family Court.
…
The important question that therefore arises in this appeal is whether the Supreme Court of New South Wales is a “court having jurisdiction under
[the Family Law] Act” to which proceedings can therefore be transferred under s 45(2).
As the Family Law Act was originally enacted, the only causes of action or proceedings for which it provided were either those defined as “matrimonial causes” or those brought under regulations made to give effect to arrangements for the enforcement of decrees under certain sections in Part XIII of that Act.
Also as originally enacted, the Family Law Act invested the State Supreme Courts (as well as the Family Court) with jurisdiction to hear and determine matrimonial causes (as well as proceedings under regulations made under certain sections in Part XIII of the Act) (s 39(5)). Included in the definition of matrimonial cause were proceedings between parties to a marriage with respect to their property (s 4(1)).
There was also provision under the Family Law Act, as originally enacted, for proclamations to be made by the Governor-General which would fix a date after which proceedings under the Act could not be instituted in, or transferred to, a Supreme Court of a specified State (s 40(3)). A proclamation dated
23 November 1983, terminated as from 25 November 1983, the jurisdiction of the Supreme Courts of all the States (and of the Australian Capital Territory, but not the Northern Territory) in matrimonial causes (and also in proceedings under regulations made under certain sections in Part XIII).
However, only four years after that proclamation, the Commonwealth Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) (“ the Cross-vesting Act”) was enacted. Section 4(1) of that Act provided:
(1) Where:
(a)the Federal Court or the Family Court has jurisdiction with respect to a civil matter, whether that jurisdiction was or is conferred before or after the commencement of this Act; and
(b) the Supreme Court of a State or Territory would not, apart from this section, have jurisdiction with respect to that matter;
then:
(c) in the case of the Supreme Court of a State (other than the Supreme Court of the Australian Capital Territory and the Supreme Court of the Northern Territory)—that court is invested with federal jurisdiction with respect to that matter; or
(d) in the case of the Supreme Court of a Territory (including the Australian Capital Territory and the Northern Territory)—jurisdiction is conferred on that court with respect to that matter.
Thus, the State Supreme Courts were again invested with the jurisdiction which the Family Court has under the Family Law Act. This jurisdiction included proceedings between parties to a marriage with respect to property because such proceedings are within the definition of “matrimonial cause” in relation to which the Family Court has jurisdiction under ss 31 and 39 of the Family Law Act. The decision of the High Court in Re: Wakim; ex parte McNally
(1999) 198 CLR 511 had no effect on this conferral of jurisdiction on State Courts by federal legislation. (See the discussion of these matters by Brereton J in Young v Lalic (2006) 197 FLR 27, [32] – [50]).However, for present purposes the position becomes more complicated by the enactment in 2008 of the Family Law Amendment (De Facto and Other Measures) Act 2008 (Cth). That amending Act inserted into the Family Law Act a new Part VIIIAB which concerned financial matters relating to de facto relationships. The amending Act followed, and relied for constitutional validity, on referrals of power by certain States to the Commonwealth.
In addition to new Part VIIIAB, the amending Act also inserted into s 4(1) of the Family Law Act a definition of “de facto financial cause”, which included proceedings with respect to property between former de facto spouses, and also proceedings “in relation to” such proceedings. Furthermore, the amending Act inserted new s 39B(1) which is as follows:
(1) Jurisdiction is conferred on:
(a) the Family Court; and
(b) the Federal Circuit Court of Australia; and
(c)the Supreme Court of the Northern Territory of Australia; and
(d)each court of summary jurisdiction of each Territory;
with respect to matters arising under this Act in respect of which de facto financial causes are instituted under this Act.
Note 1:The exercise of this jurisdiction by the Family Court is subject to section 40.
Note 2:The exercise of this jurisdiction by the Federal Circuit Court of Australia is subject to section 40A.
Note 3:The exercise of this jurisdiction by a Territory court is subject to sections 39C, 39D, 39E and 39F.
(2)Each court of summary jurisdiction of each referring State is invested with federal jurisdiction with respect to matters arising under this Act in respect of which de facto financial causes are instituted under this Act.
Note:The exercise of this jurisdiction by a State court is subject to sections 39D and 39E.
(3) This section has effect subject to this Part.
The question thus arises as to whether the Supreme Court of New South Wales has jurisdiction in de facto financial causes by virtue of the Family Court having such jurisdiction under s 39B(1) of the Family Law Act and the operation of s 4(1) of the Cross-vesting Act.
It is interesting to note that [66] of the Explanatory Memorandum for the Family Law Amendment (De Facto and Other Measures) Bill 2008 (Cth) (which inserted Part VIIIAB) states:
66. The courts conferred with jurisdiction in de facto financial causes are the Family Court of Australia, the Federal Magistrates Court of Australia, the Supreme Court of the Northern Territory, and courts of summary jurisdiction in a participating jurisdiction. (‘De facto financial cause’ and ‘participating jurisdiction’ are defined in other provisions of the Bill).
Notwithstanding the express provisions of s 39B(1) of the Family Law Act and this statement in [66] of the explanatory memorandum, we are of the view that given the reference in s 4(1)(a) of the Cross-vesting Act to the conferral of jurisdiction on the Family Court “before or after the commencement” of that Act, that it must be concluded that the Supreme Court of New South Wales does have jurisdiction under Part VIIIAB of the Family Law Act. Accordingly, the
Federal Circuit Court can transfer to the New South Wales Supreme Court proceedings instituted under Part VIIIAB in the Federal Circuit Court. Thus, the first ground of this appeal must fail.
The use of the section 45(2) transfer power in this case
The second and third grounds of this appeal assert respectively that her Honour erred in:
· finding that the relief sought by the appellant was outside the jurisdiction of the Federal Circuit Court (to the extent that her Honour did so) (Ground 2.1);
· finding that the Court ought not exercise the jurisdiction which the Court had and has to hear and determine the entirety of the proceedings (Grounds 2.2); and
· failing to identify and apply the principles relevant to any available power and the exercise of any available discretion to transfer the proceedings to another court (Ground 3).
We will first address the complaint in Ground 3, being the asserted failure on her Honour’s part to identify the principles relevant to the power and/or discretion to transfer the proceedings to the Supreme Court.
As we have earlier observed, her Honour did not identify the power on which she relied to transfer the proceedings to Supreme Court, and again as we have earlier concluded, that power could only have been the power contained in
s 45(2) of the Family Law Act, which for convenience we here repeat, but only to the extent presently relevant:
Where there are pending in a court proceedings that have been instituted under this Act or are being continued in accordance with any of the provisions of section 9 and it appears to that court that it is in the interests of justice, or of convenience to the parties, that the proceedings be dealt with in another court having jurisdiction under this Act, the court may transfer the proceedings to the other court. …
We do not consider that it was fatal to her Honour’s decision that she did not identify the source of the power upon which she relied to make the order transferring the proceedings to the Supreme Court (R v Bevan; Ex parte Elias and Gordon (1942) 66 CLR 452 at 487; Lockwood v The Commonwealth (1954) 90 CLR 177 at 184; Brown v West (1990) 169 CLR 195 at 203; Attorney-General for South Australia v Adelaide City Corporation and Others (2013) 249 CLR 1 at 76). However, it was necessary that the conditions required for the exercise of the power were satisfied (Eastman v Director of Public Prosecutions (ACT) (2003) 214 CLR 318 at 362 [124] per Heydon J; Australian Education Union v Department of Education and Children’s Services (2012) 248 CLR 1 at 17 [34] per Crennan and Kieffel JJ).
Thus, it was necessary for her Honour to be satisfied that it was “in the interests of justice, or of convenience to the parties” that the proceedings be transferred from the Federal Circuit Court to the Supreme Court.
Again, her Honour did not use in her reasons either the expression “interests of justice” or the expression “of convenience to the parties”. However, both those concepts can readily be seen to underlie the following observation made by her in the penultimate paragraph of her reasons:
19.These proceedings were filed in February 2012 by the [appellant]. She did not file this second amended application until some two weeks before a trial and her claim for relief is changed. The second respondent whom she claims is estopped from denying an agreement between he and she or he, she and her former de facto husband, is aged 83 years of age. He has suffered a quadruple bypass and is not in good health. These proceedings must be dealt with as expeditiously as is possible. The travesty would be this matter being remitted to the Family Court, a judge of that Court coming to the same conclusion that I have come to namely the relief sought by the [appellant] is not a proper exercise of this Court’s jurisdiction and if so the matter then being remitted to the Supreme Court.
Although we may not agree with her Honour as to the expressed reason for transferring the proceedings to the Supreme Court of New South Wales rather than to the Family Court, that is not the issue. The issue is whether she adequately addressed the statutory requirements for transfer to the Supreme Court of New South Wales.Having regard to those observations by her Honour in that paragraph, it could not legitimately be said that her reasons for the transfer order were not based on the interests of justice and the convenience to the parties. Accordingly, Ground 3 has not been established.
We turn finally to the two complaints made in the second ground of appeal, being that her Honour erred in finding that “the relief sought by the appellant was outside the jurisdiction of the Federal Circuit Court”, and that
“the Court ought not to exercise the jurisdiction which the Court had and has to hear and determine the entirety of the proceedings”.
It appears from the appellant’s written submissions that the first of these asserted errors is directed to the first sentence of [18] of her Honour’s reasons where she said:
18.To carry out the first step namely identify the pool of assets is one which falls outside, as I see it, the proper exercise of my jurisdiction under the Family Law Act. …
Her Honour’s language here was unfortunate in that it is certainly ambiguous. However, we are not prepared to read her Honour as saying that the identification of the assets of the appellant and the first respondent was outside the “proper” exercise of the Federal Circuit Court’s jurisdiction. Furthermore, the first sentence of [18] must be read with the second sentence of that paragraph where her Honour said: “[t]he hearing will take many days”. It is generally accepted within the existing protocol for the exercise of the concurrent jurisdiction between the Federal Circuit Court and the Family Court that the former court will not hear cases lasting more than a couple of days.
We read her Honour in these passages from her reasons as doing no more than referring to the existing arrangements for the jurisdiction which, it has been agreed between both courts, the Federal Circuit Court will exercise. Out of fairness to the legal representatives of the appellant, we note that both the ground of appeal as drafted and the written submissions on behalf of the appellant acknowledge that the first sentence in [18] of her Honour’s reasons is open to varying interpretations.
As to the second error asserted by Ground 2, being that her Honour erred in not exercising the jurisdiction which she did have, we would say only that the general principle that where jurisdiction is conferred on a court it is to be exercised by that court, must in the case of courts exercising jurisdiction under the Family Law Act, be applied subject to the provisions of s 45(2) of that Act. So much can be seen to be recognised by the statement by Gleeson CJ, Gaudron and Gummow JJ in ASIC v Edensor Nominees Pty Ltd (2001)
204 CLR 559 at 585-586: “Ordinarily, questions of abuse of process, forum non-conviniens and the like aside, jurisdiction conferred upon a court is to be exercised”. (See also C Pty Limited & Ors and PGW as Liquidator of S Pty Limited (in liq) (2011) FLC 93-485).
Accordingly, we find no substance in the complaints raised in Ground 2.
Conclusion in relation to the appeal against transfer orders
For the reasons we have given, we have found no substance in the appeal against the order transferring the proceedings to the Supreme Court, and therefore the appeal against that order will be dismissed.
The issue of whether or not leave was required for this appeal was not agitated before us, and so we will not concern ourselves with that issue. We would say only that should leave be required, it would be granted because of the important questions raised by this appeal, being principally the jurisdiction of the State Supreme Courts under Part VIIIAB of the Family Law Act.
The appeal against the costs orders
As mentioned earlier in these reasons, her Honour, having received written submissions from the parties, made costs orders on 5 December 2013 which
(as amended) were in the following terms:
2. The [appellant] is to pay the 1st Respondent or as they direct their costs thrown away in these proceedings in the amount of $21,854 within 3 calendar months.
3. The [appellant] is to pay to the 2nd Respondent or as they direct their costs thrown away in these proceedings in the amount of $38,203.72 within 3 calendar months.
(Original emphasis)
It will be convenient to consider her Honour’s reasons for these orders, so far as is necessary, in the context of our consideration of the grounds of appeal directed to the orders.
Ground 1 asserts:
that Her Honour erred in law [in] remitting the proceedings to the Supreme Court of New South Wales, including by finding that:
1.1 the proceedings were not for relief pursuant to Part VIIIAB of the Family Law Act 1975;
1.2 the relief sought was outside the jurisdiction of the Federal Circuit Court of Australia and the Family Court of Australia.
This ground cannot have substance because of our earlier conclusion to the effect that her Honour did not err in transferring the proceedings to the Supreme Court. It is thus unnecessary for us to say more about this ground, although we make the following observations in relation to the two findings which the ground asserts that her Honour made.
We have earlier in these reasons (at [40] to [43]) discussed the second of these asserted findings, at least as it appeared in virtually identical terms in her Honour’s reasons for the transfer order and made with reference to the jurisdiction of the Federal Circuit Court. So far as the Family Court is concerned, we assume that the asserted finding in relation to the Family Court is the statement in the second sentence of [31] of her Honour’s reasons in relation to her costs orders. Paragraph [31] reads:
31.The [appellant] was endeavouring to create a fund of money for division between she and her de facto husband, there effectively being a very limited pool that she and he owned together. The one factor that cannot be cavilled with is that the claim by the [appellant] was not one within the Family Court’s inherent jurisdiction.
(Emphasis added)
As we are at a loss to know what her Honour intended by the expression “inherent” to describe the Family Court’s jurisdiction, it is difficult for us to discuss this statement by her. We do, however, point to the obligation which her Honour had to identify the legal and equitable property interests which the parties had. We also point to the provisions of Division 3 of Part VIIIAB of the Family Law Act (“Orders and injunctions binding third parties”) and to the existence of accrued jurisdiction of the Family Court (See Warby & Warby (2001) FLC 93-091).
The first of the asserted findings referred to in Ground 1 would appear to be directed to the following paragraphs in her Honour’s reasons in relation to the costs orders:
10.Those orders are not arising from an application for the alteration of property interests between a de facto wife and a de facto husband. This is an application seeking a declaration of trust in respect of a third party who was not a party to the relationship within the definition of “relationships” or “marriage” under the Family Law Act.
…
30.The [appellant’s] 2nd amended application filed by her on 13 September 2013 was not an application seeking the alteration of property interests under section 90SM of the Family Law Act in terms of alteration of interests between she and her former de facto husband. She was seeking, as clear as can be stated as the pleadings are clear, unambiguous and very well set out, a claim for equitable relief against her former father-in-law, and a company all third party’s outside this relationship.
Again in relation to these paragraphs, we need only say that her Honour appears to have overlooked the obligation that both the Family Court and the Federal Circuit Court have to identify the legal and equitable interests of the parties and also to the availability to those Courts of the powers in Division 3 of Part VIIIAB of the Family Law Act and to the Family Court the accrued jurisdiction and possibly to the Federal Circuit Court as well.
Ground 2 asserts that her Honour erred in finding that the proceedings were unable to proceed to hearing on 2 October 2013 “as a result of the conduct of the appellant.” It appears that this ground is directed to the following paragraph in her Honour’s reasons in relation to her costs orders:
42.I am satisfied that I should exercise my discretion under section 117(2) of the Act and determine to make an order for costs. The question of what type of cost is a matter that I will speak of later. However, it is clear that the hearing was not able to be dealt with because of the conduct only of the [appellant].
(Emphasis added)
Her Honour then proceeded to detail the changes in the appellant’s claims against the respondents which were contained in the application filed on
11 September 2013 (which are explained earlier in these reasons at [9]), and it is reasonably clear that this was the appellant’s “conduct” to which her Honour was referring to in [42] of her reasons.
In support of this second ground, the appellant relies on the following comments which her Honour made when the matter opened before her on
2 October 2013:
HER HONOUR: Now, I’ve got three hearings starting today, which is interesting, and this matter has a degree of complexity in it.
…
HER HONOUR: - - - in any event, why should it be here in my court? It really should be in the Family Court. I have absolutely no time today to deal with it.
(Transcript 2 October 2013, page 2, lines 22-23 and page 3, lines 35-36)
In light of these passages of transcript the submission then made on behalf of the appellant was that the Court was unable to provide the parties with a hearing as scheduled on that day, and thus it was not open to her Honour to find that the hearing was unable to proceed “because of the conduct only of the [appellant]” (emphasis added).
In our view, there is sufficient force in this submission to establish that this ground of appeal has substance. It does not in the particular circumstances of this case assist the respondents that the comments by her Honour about her availability to hear the case were made in the course of the hearing rather than in her reasons. The transcript of the hearing now provides us with an insight into the situation that actually prevailed on 2 October 2013 and which may well have been forgotten by her Honour when a couple of months later she prepared her costs judgment.
Grounds 3 and 4 which were argued together by senior counsel for the appellant assert that her Honour erred in:
·“finding that there was an application for an adjournment and in making an order as to costs consequent upon the same”, and “failing to determine the issue of leave to amend the application of the appellant”. (Grounds 3.1 and 3.2); and
·finding that the respondents “were unable to meet the appellant’s claim”. (Ground 4).
The principal passages in her Honour’s reasons for the costs orders, to which these grounds were directed were apparently as follows:
25.This 2nd amended application and the declarations and orders sought are entirely different and fundamentally changed the application which had been listed for trial. The first three orders in the
2nd amended application had never been pleaded before.26.Additionally the [appellant] pleaded an equitable charge as a ground of relief, estoppel as a ground of relief, quantum meruit as a ground of relief, and sought as a further relief the sale of shares. This amended initiating application was filed 15 months after the matter was listed for trial and two weeks before the matter was due to commence being heard.
27.Unsurprisingly, an application for an adjournment was sought by both the first and second respondents, as they simply could not meet the claim as it had became a fundamentally different case, a far more complex matter than had been pleaded previously.
…
58.Thirdly, evidence of particular misconduct causing loss of time to the Court and to other parties. That is applicable here as the successful adjournment application attests.
(Original emphasis)
The first submission which senior counsel for the appellant made in his written outline of argument (at [39]) in support of Grounds 3 and 4 was “that no record can be found of any application for adjournment being made or determined”. Our reading, and indeed electronic searching, of the transcript of 2 October 2013 confirms that there was no application for an adjournment, or determination of such an application.
Counsel for the second respondent sought to persuade us that the events, which we have earlier described at [13] of these reasons, which occurred on 2 October 2013 after the parenting matter settled, and when her Honour was informed that all counsel were agreed that the property matter would require a hearing of more than three days with applications then being made for a transfer to the Family Court or the Supreme Court, would constitute an application for an adjournment and were properly so treated by her Honour (paragraphs [38]-[39] of the written submissions on behalf of the second respondent). However, in our view, if these particular events were understood by her Honour to amount to a successful application for an adjournment it behoved her Honour to make this clear in her reasons. This she did not do.
In these circumstances, we consider that we have no alternative other than to conclude that her Honour has made a most material mistake of fact in her reasons for her costs orders, and that on the basis of such a mistake, her orders cannot be permitted to stand. It did emerge during the hearing before us that her Honour may have been led into this mistake by the written submissions made to her in relation to costs following the hearing on 2 October 2013. (See, for example, [40] of the second respondent’s written submissions and page 58 of the transcript of the hearing before us on 15 July 2014). However, even if that is the case, our conclusion regarding the effect of this mistake on the appeal against the costs orders must stand.
The other matter to which Grounds 3 and 4 are directed is the issue of the variations in the appellant’s claim as contained in her further amended initiating application filed on 11 September 2013 and the assertion that the respondents were unable to respond to such variations in the time available.
This matter was the subject of extensive oral submissions to us by senior counsel for the appellant (see particularly at pages 52 to 56 of the transcript of the hearing on 15 July 2014). It is unnecessary for us to repeat those submissions here, particularly given our conclusion that her Honour’s costs orders cannot stand on the basis of the mistake of fact concerning the adjournment issue. However, we would say that we were persuaded by senior counsel’s submissions that the appellant’s claim had not so radically altered, or that the respondents had not had an opportunity to respond to the amended claim, such that an order for costs, particularly indemnity costs, was warranted against the appellant.
We therefore find substance also in Grounds 3 and 4.
Given our conclusions in relation to Grounds 2, 3 and 4 it is unnecessary for us to consider Grounds 5 and 6 which are directed to the quantum of costs ordered in the sense of costs thrown away and indemnity costs.
In conclusion in relation to the grounds of appeal against the costs orders, we think it useful to say that having regard to our consideration of the transcript before her Honour on 2 October 2013 and also of the reasons which she gave for her orders made that day, we found it surprising, both during the hearing of the appeal and then in our subsequent consideration of this case, that there was any matter arising in connection with the proceedings on 2 October 2013 that would have justified a costs order, let alone an indemnity costs order, being made against the appellant. In this regard we are compelled to say that we consider that the costs orders made in this case having regard to its facts were, in the words of Dixon, Evatt and McTiernan JJ in House v The King (1936) 55 CLR 499 at 505, “unreasonable or plainly unjust”.
In allowing the appeal against the costs orders, we would therefore set aside those orders, and in the re-exercise of our discretion, make no order for costs on the basis that we are not satisfied that there should be a departure from the general rule under s 117 of the Family Law Act that each party should bear their own costs. In so deciding we have had regard to the written submissions which were made to the primary judge by all three parties prior to the orders of 5 December 2013 and which were before us in the appeal books.
Costs of the appeals
Given the submissions made to us in relation to the costs of the appeals at the conclusion of the hearing before us, and having regard to the fact that one of the appeals has succeeded and the other has not, we consider that there should be no order for costs in relation to either appeal.
We do, however, consider that the errors which have led to us allowing the appeal against the indemnity costs orders would warrant the grant of appropriate certificates under the Federal Proceedings (Costs) Act 1981 (Cth) to both the appellant and the second respondent in relation to that appeal. The first respondent advised us that he had no legal costs in connection with the appeal.
I certify that the preceding seventy-three (73) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Bryant CJ, Finn and Strickland JJ) delivered on 11 May 2015.
Associate:
Date: 11 May 2015
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