Kidd and Kidd
[2013] FCCA 1532
•23 August 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| KIDD & KIDD | [2013] FCCA 1532 |
| Catchwords: PRACTICE AND PROCEDURE – Disqualification – application that judge should be disqualified from hearing further proceedings – offers of settlement. |
| Legislation: Family Law Act 1975(Cth), ss.117, 117C Federal Circuit Court of Australia Act 1999 (Cth) s. 39 |
| Cases cited: Aldridge & Keaton (Stay Appeal) [2009] FamCAFC 106 Duncan v The Honourable David Andrew Ipp AO QC and Ors [2013] NSWSC 314 Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337 Johnson v Johnson [2000] HCA 48; (2000) 201 CLR 488; 174 ALR 655; FLC 93-041 Kidd & Kidd [2013] FCCA 684 McGovern v Ku-ring-gai Council [2008] NSWCA 209; 72 NSWLR 504 Re JRL; ex parte CJL (1986) 161 CLR 342 |
| Applicant: | MS KIDD |
| Respondent: | MR KIDD |
| File Number: | SYC 5925 of 2012 |
| Judgment of: | Judge Scarlett |
| Hearing date: | 21 August 2013 |
| Date of Last Submission: | 21 August 2013 |
| Delivered at: | Sydney |
| Delivered on: | 23 August 2013 |
REPRESENTATION
| Counsel for the Applicant: | Mr Lloyd SC |
| Solicitors for the Applicant: | Reid Family Lawyers |
| Counsel for the Respondent: | Mr Tockar |
| Solicitors for the Respondent: | York Law |
ORDERS
Orders (1), (2) and (3) made on 28 June 2013 are stayed pending the outcome of the Application for leave to Appeal filed on 5 August 2013 on the condition that within fourteen (14) days the parties do all things and sign all necessary documents and give all necessary authorisations to cause the sum of $30,000.00 to be released to the Husband from the account that is in the name of the Wife and which holds the proceeds of sale of the parties’ former matrimonial home being an account with (bank omitted) account number (omitted) such sum to be paid into or a bank cheque made payable to “York Law – Law Practice Trust Account”.
The Wife’s solicitor is permitted to uplift the Wife’s Conciliation Conference document from the Court file within seven (7) days.
The hearing dates of 27 and 28 February 2014 are vacated.
As provided by Section 39 of the Federal Circuit Court of Australia Act 1999 the proceeding is transferred to the Family Court of Australia at Sydney to be listed for hearing on a date to be fixed.
The parties’ costs are reserved.
IT IS NOTED that publication of this judgment under the pseudonym Kidd & Kidd is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 5925 of 2012
| MS KIDD |
Applicant
And
| MR KIDD |
Respondent
REASONS FOR JUDGMENT
Application
This is an Application by the Wife for:
a)a stay of the Orders made on 28 June 2013 pending the outcome of her Appeal against those Orders;
b)that the hearing of all matters in these proceedings, obviously with the exception of the current Application, be listed before another Judge; and
c)that her solicitor be permitted to uplift her Conciliation Conference Document from the Court file.
The Application is opposed by the Husband.
Background
The Orders that are the subject of an Application for Leave to Appeal were made on 28th June 2013 (Kidd & Kidd[1]). Those orders provided that:
(1)The parties must forthwith do all things and sign all necessary documents and give all authorisations to cause the sum of $95,000.00 to be released to the husband from the account that is in the name of the Respondent wife and which holds the proceeds of sale of the parties’ former matrimonial home being an account with (bank omitted) account number (omitted) such sum to be paid into or a bank cheque made payable to “York Law – Law Practice Trust Account”.
(2)The Response to an Application in a Case filed on 2 May 2013 is dismissed.
(3)Any application for costs must be made within twenty-eight (28) days from the date of these orders by way of a written submission setting out the amount of costs sought and the basis upon which an order for costs is claimed and any submission in opposition to the application for costs is to be filed and served within a further period of fourteen (14) days.
[1] [2013] FCCA 684
The Application by the wife is in the form of an Application in a Case filed on 13th August 2013 supported by:
a)an affidavit by the wife affirmed on 12th August 2013; and
b)an affidavit by the wife’s solicitor, Ms Reid, affirmed on 13th August 2013.
The Application was heard on 21st August 2013.
Evidence and Submissions
In her affidavit the wife’s solicitor deposed that an Application for leave to Appeal had been filed on 5th August 2013. Copies of the Application for Leave to Appeal and the Notice of Appeal are annexed to her affidavit.
The Ground of Appeal is stated as:
That his Honour’s orders constitute a substantial injustice to the Wife insofar as his Honour had access to the Wife’s Conciliation Conference Document which was tendered by Counsel for the husband in error and without notice at the hearing of the proceedings.
The facts relied upon in the Notice of Appeal are:
1. The Husband made an interim application for costs from the proceeds of sale of the former matrimonial home (“the proceeds of sale”). The Wife opposed the Application. The Husband was successful.
2. The Wife seeks final orders for the whole of the proceeds to be paid to her.
3. In the course of the interim hearing, counsel for the Husband, in error and without notice to the Wife, handed up to his Honour, Judge Scarlett, a copy of the Wife’s conciliation conference document.
4. The solicitor for the Husband wrote to the Court on 25 June 2013 asking the Court to disregard the Conciliation Conference document.
5. When the Wife’s solicitor inspected the Court file on 29 July 2013, she saw that the Conciliation Conference document remained on the Court file and that various parts of the document had been highlighted. It is unknown who was responsible for the highlighting.
6. A substantial injustice has occurred in circumstances where the Court has been privy to the Wife’s settlement negotiations in determining the Husband’s interim application.
Both parties filed written submissions and their Counsel spoke to those submissions.
Senior Counsel for the Applicant, Mr Lloyd, submitted on the recusal argument that:
It is not contended by the Wife that his Honour Judge Scarlett has acted in a way that would suggest bias or that he has, through any error of his, caused this Application to be brought. Her Application arises solely as a consequence of the conduct of counsel for the Husband in handing to his Honour, without notice to the Wife, the Wife’s Conciliation Conference document, thereby causing a significant injustice to her and perception by her that her case cannot be determined impartially having regard to the settlement offer being provided.[2]
[2] Wife’s Case Outline page 1
The Applicant refers the Court to the decision of the High Court of Australia in Ebner v Official Trustee in Bankruptcy[3] at 344-349 on the question of judicial bias. It was submitted that:
It is clear from the authorities that we need not make a prediction about how the Judge will approach the matter going forward or what factors were in fact taken into account by the Judge in determining the matter. The question is one of “possibility” and whether the facts of the case give rise to an appearance of bias or partiality. The Wife feels that her position with regard to her substantive application has been greatly compromised by the provision to the Judge of her Conciliation Conference document which set out an offer of settlement made for the purpose of the Conciliation Conference only.[4]
[3] [2000] HCA 63; (2000) 205 CLR 337
[4] Wife’s Case Outline page 2
It was submitted that the Conciliation Conference document was clearly a document prepared for the purpose of negotiating a settlement and should not have been adduced as evidence or provided to the Court as set out in s.131(1) of the Evidence Act 1995 (Cth) as none of the exceptions in s.131(2) of the Act apply.
Further, it is submitted that the provisions of s.117C of the Family Law Act 1975 (Cth) do not apply in this case.
Section 117C refers to offers of settlement and contains, in subsection (2), a prohibition on the disclosure of such offers:
(2) If:
(a)a party to proceedings to which this section applied makes an offer to the other party to settle the proceedings: and
(b)the offer is made in accordance with any applicable Rules of Court;
the fact that the offer has been made, or the terms of the offer, must not be disclosed to the court in which the proceedings are being heard except for the purposes of the consideration by the court whether it should make an order as to costs under subsection 117(2) and the terms of any such order.
However, subsection 117C(3) provides:
(3)A judge of the court is not disqualified from sitting in the proceedings only because the fact that an offer has been made is, contrary to subsection (2) disclosed to the court.
Senior Counsel for the wife submits that s.117C does not apply in this case because there are two types of offers to settle according to the Family Law Rules 2004:
· compulsory offers to settle property cases which must be made after a conciliation conference (r. 10.06)
· other offers to settle (Rules 10.02 to 10.05).
The submission is that an offer set out in a Conciliation Conference document is not an offer pursuant to subsection 117C(1) and accordingly s.117C(3) does not apply.
In short, it is submitted that, as a consequence of counsel for the Husband making available to the Court a without prejudice offer of settlement, the Wife’s substantive application is compromised and cannot therefore be dealt with impartially by this Court.
Counsel for the Husband opposed the application that I should disqualify myself from hearing the matter further, describing the Wife’s contention in this way:
4. The contention on behalf of the wife appears to be that because the wife apprehends that his Honour might have been influenced as a result of the Conciliation Conference document being handed up to the Court, that is the end of the matter and a disqualification application must succeed as a matter of course.[5]
[5] Respondent’s Case Outline and Summary of Argument page 4 at paragraph [4]
Further, it is submitted that the Wife’s contention ignores the fact that:
· the apprehension of bias is not in itself sufficient to require the disqualification of a judicial officer – the apprehension of bias must be such that a fair-minded lay observer would reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide;
· in this matter, his Honour made it quite clear that he was not even aware of the offending document;
· it is quite apparent from the Reasons for Judgement delivered by his Honour on 28 June 2013, the matter was determined without reference to, or consideration of, the Conciliation Conference document.
Counsel for the Husband referred the Court to the decision of Hoeben CJ at CL in Duncan v The Honourable David Andrew Ipp AO QC and Ors,[6]where the plaintiff had sought Orders effectively disqualifying the ICAC Commissioner from further presiding over or otherwise participating in the proceedings.
[6] [2013] NSWSC 314
Hoeben CJ at CL found that the particular actions identified by the plaintiff did not provide a basis whereby a fair-minded observer might apprehend that the Commissioner might have predetermined the matters under investigation. His Honour referred at [118] to the decision of Basten JA in McGovern v Ku-ring-gai Council,[7]his Honour said at [81]:
In a case where the decision-maker has publicly identified that prejudicial material has been made available, the observer would be entitled to take account of a statement that it has not affected the decision-maker’s approach to the decision, but need not be expected to accept the disclaimer…
[7] [2008] NSWCA 209; 72 NSWLR 504
Hoeben CJ at CL went on to say at [119]:
The observer, however, would need to have some rational basis for not accepting the disclaimer.
His Honour found that the plaintiff had not identified any statements or actions by the Commissioner that were inconsistent with the proposition that no finding had been made.
His Honour went on to find at [120]:
Secondly, none of the matters relied upon by the plaintiff could provide a basis whereby the second limb of the Ebner test could be satisfied. At no point was there an articulation of a logical connection between the matters relied upon and the feared deviation from deciding Operation Jasper on its merits.
Mr Tockar, for the Husband, also referred the Court to Rule 12.07 of the Family Law Rules, submitting that the rule does not require that a Conciliation Conference document should be returned to the parties or destroyed at the conclusion of the conference.
Mr Tockar also referred the Court to the decision of Dawson J in Re JRL; ex parte CJL[8] at 371-2 and Johnson v Johnson[9]at 492-493.
[8] (1986) 161 CLR 342
[9] (2000) 201 CLR 488; FLC 93-041
The Stay Application
The Wife submits that the Orders of 28th June 2013 should be stayed pending the determination of her Application for leave to appeal on the following bases:
a)If the interim costs order were not stayed and the Wife were obliged to transfer the sum of $95,000.00 to the Husband, the appeal would be rendered nugatory, as the Husband has no other funds to reimburse the Wife in the event that her appeal is successful;
b)Whilst the Husband is entitled to the fruits of his judgment, it is obvious that the appeal has significant merit and the Husband should have consented to setting aside the orders and allowing another Judge to determine the matter afresh;
c)The Wife would suffer hardship if the orders were not stayed, because the fund from which the money is to be paid is the fund from which she derives interest to pay her rent;
d)The appeal has merit; and
e)The stay application has been brought in a timely fashion, and whilst leave to appeal is required to proceed, a proper and full explanation has been provided.
Counsel for the Husband submits that the wife has very little prospect of succeeding on appeal. It is apparent from the Notice of Appeal that the Wife relies on only one ground, the claim of a substantial injustice as I had access to the Wife’s Conciliation Conference document which was tendered in error. There was no attack on the Reasons for Judgment.
Further, it was submitted that the release of an amount of $95,000.00 to the Husband from the proceeds of sale was appropriate, as the amount represented approximately 6.3% of the parties’ liquid assets and it is inconceivable that the husband would receive less than 6.3% of the liquid assets by way of final orders.
Accordingly, the release of $95,000.00 to the Husband does not constitute a hardship to the Wife.
Disqualification
The High Court has, on a number of occasions in the past few decades, set out the test to be applied when an application is being made for disqualification of a judge on the ground of a reasonable apprehension of bias.
In Re JRL; Ex parte CJL[10] at 352, Mason J, who was in the majority, held:
It needs to be said loudly and clearly that the ground of disqualification is a reasonable apprehension that the judicial officer will not decide the case impartially or without prejudice, rather than that he will decide the case adversely to one party. There may be many situations in which previous decisions of a judicial officer on issues of fact and law may generate an expectation that he is likely to decide issues in a particular case adversely to one of the parties. But this does not mean either that he will approach the issues in that case otherwise than with an impartial and unprejudiced mind in the sense in which that expression is used in the authorities or that his previous decisions provide an acceptable basis for inferring that there is a reasonable apprehension that he will approach the issues in this way. In cases of this kind, disqualification is only made out by showing that there is a reasonable apprehension of bias by reason of prejudgment and this must be “firmly established”…Although it is important that justice must be seen to be done, it is equally important that judicial officers discharge their duty to sit and do not, by acceding too readily to suggestions of appearance of bias, encourage parties to believe that by seeking disqualification of a judge, they will have their case tried by someone thought to be more likely to decide the case in their favour.
[10] supra
In Johnson v Johnson[11]it was held by the majority, Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ, that:
It has been established by a series of decisions of this Court that the test to be applied in Australia in determining whether a judge is disqualified by reason of the appearance of bias (which, in the present case, was said to take the form of prejudgment) is whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question the judge is required to decide.[12]
[11] supra
[12] (2000) 201 CLR 488 at 492
Their Honours went on to say at 493:
The hypothetical observer of the judge’s conduct is postulated in order to emphasise that the test is objective, is founded in the need for public confidence in the judiciary, and is not based purely upon the assessment by some judges of the capacity or performance of their colleagues. At the same time, two things need to be remembered: the observer is taken to be reasonable; and the person being observed is “a professional judge whose training, tradition and oath or affirmation require [the judge] to discard the irrelevant, the immaterial and the prejudicial”.
In Ebner v Official Trustee in Bankruptcy[13], it was held by Gleeson CJ, McHugh, Gummow and Hayne JJ at 344-345 that:
Where, in the absence of any suggestion of actual bias, a question arises as to the independence or impartiality of a judge (or other judicial officer or juror), as here, the governing principle is that,…a judge is disqualified if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide. That principle gives effect to the requirement that justice should both be done and be seen to be done, a requirement which reflects the fundamental importance of the principle that the tribunal be independent and impartial. It is convenient to refer to it as the apprehension of bias principle.
…Deciding whether a judicial officer (or juror) might not bring an impartial mind to the resolution of a question that has not been determined requires no prediction about how the judge or juror will in fact approach the matter. The question is one of possibility (real and not remote), not probability. Similarly, if the matter has already been decided, the test is one which requires no conclusion about what facts actually influenced the outcome. No attempt need be made to inquire into the actual thought processes of the judge or juror.
The apprehension of bias principle admits of the possibility of human frailty. Its application is as diverse as human frailty. Its application requires two steps. First, it requires the identification of what it is said might lead a judge (or juror) to decide a case other than on its legal and factual merits. The second step is no less important. There must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits.
[13] supra
Stay Applications
A decision whether to grant a stay is a discretionary judgment and the principles in determining an application for a stay of orders pending the determination of an appeal are well-known.
A useful decision setting out those principles is Aldridge & Keaton (Stay Appeal)[14], which is a decision on appeal from a decision of the Chief Federal Magistrate[15] and therefore binding on this Court.
[14] [2009] FamCAFC 106
[15] As his Honour then was
The Full Court (Bryant CJ, Boland and Crisford JJ) set out the relevant principles at paragraph [18] of the judgment. Those that relate only to parenting matters have been omitted:
· the onus to establish a proper basis for a stay is on the applicant for the stay. However, it is not necessary for the applicant to demonstrate any “special” or “exceptional” circumstances;
· a person who has obtained a judgment is entitled to the benefit of that judgment;
· a person who has obtained a judgment is entitled to presume the judgment is correct;
· the mere filing of an appeal is insufficient to grant a stay;
· the bona fides of the applicant;
· a stay may be granted on terms that are fair to all parties – this may involve a court weighing the balance of convenience and the competing rights of the parties;
· a weighing of the risk that an appeal may be rendered nugatory if a stay is not granted – this will be a substantial factor in determining whether it will be appropriate to grant a stay;
· some preliminary assessment of the strength of the proposed appeal – whether the appellant has an arguable case;
· (omitted)
· The period of time in which the appeal can be heard and whether existing satisfactory arrangements may support the granting of a stay for a short period of time; and
· (omitted)
Conclusions
The law in relation to disqualification of a Judge for apprehension of bias has been well set out by the High Court in the decisions referred to above. The test to be applied is whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question the judge is required to decide (Johnson v Johnson (supra) at 492; Ebner v Official Trustee in Bankruptcy (supra) at 344).
The facts here are that, when inspecting the Court file, the wife’s solicitor found a conciliation conference document on the file. There is no issue as to the fact that I did not read this document or that I was even aware of it. It follows that this document had no bearing on the decision that was made.
Senior Counsel for the wife submits that the possibility that I may have seen this document is sufficient because “The Wife feels that her position with regard to her substantive application has been greatly compromised”. In her affidavit, the wife deposes:
5. I feel that my position in relation to my final property application has been compromised as a consequence of my Conciliation Conference document being available to the Judge, the Honourable Justice[16] Scarlett, who will be hearing my matter.
6. I therefore feel that it is not fair for His Honour, Justice[17] Scarlett to continue to hear my case and I am seeki9ng an order that he be disqualified.[18]
[16] sic
[17] sic
[18] Affidavit of Ms Kidd 12.8.2013 at paragraphs [5] & [6]
This, of course, is not the test. It cannot seriously be contended that a party to the proceedings is “a fair-minded lay observer”. The test is an objective one, not a subjective test based on the feelings of one of the parties.
Again, it has not been demonstrated that the second limb of the Ebner test has been met – “an articulation of the logical connection between the matter and the feared deviation from the feared deviation from the course of deciding the case on its merits”. As it is conceded that the document did not come to my attention, only a mere possibility that it might have, the connection has not been made.
In my view, the application for disqualification does not meet the tests laid down by the High Court in Johnson and Ebner.
The other matter that needs to be considered in the disqualification argument is the Wife’s contention that an offer set out in a Conciliation Conference document is not an offer in accordance with subsection 117C(1) and, consequently, subsection 117C(3) does not apply.
The authority for this proposition is that there are two types of offers to settle under the Family Law Rules, compulsory offers to settle under Rule 10.06 and other offers under Rules 10.02 to 10.05 inclusive.
With respect, that argument does not affect the meaning of s.117C of the Act. Section 117C applies to offers of settlement, other than the exceptions set out in s.117C(1):
(1)This section applies to proceedings under this Act other than the following proceedings:
(a) proceedings under Part VI;
(b) proceedings under Division 6, 9 or 13 of Part VII;
(c)proceedings to enforce a decree or injunction made under Division 6, 9 or 13 of part VII.
The substantive proceedings do not fall into any of those categories. Part VI relates to divorce or nullity of marriage and Part VII applies to parenting proceedings. The Conciliation Conference relates to financial matters, and it is highly unlikely that a conciliation conference document would have contained an offer to settle the parenting proceedings. In any event, the interlocutory application the subject of these proceedings did not have anything to do with parenting proceedings.
I do not accept the argument that s.117C does not apply to these proceedings. Consequently, subsection (3) applies:
A judge of the court is not disqualified from sitting in the proceedings only because the fact that an offer has been made is, contrary to subsection (2), disclosed to the court.
The ground for disqualification has not been made out.
Whether a Stay should be granted
There is no evidence before the Court as to when the Appeal, or the Application for leave to Appeal, will be heard.
The important considerations here are, to my mind:
a)Weighing the balance of convenience and the competing rights of the parties;
b)Whether the appeal may be rendered nugatory if a stay is not granted; and
c)Whether the appellant has an arguable case.
The only ground of appeal that has been put before the Court is:
That his Honour’s orders constitute a substantial injustice to the Wife insofar as his Honour had access to the Wife’s Conciliation Conference Document which was tendered by Counsel for the husband in error and without notice at the hearing of the proceedings.
As I have already rejected the disqualification argument at [40] to [51] above, it follows that the ground of appeal appears to be weak. It may be an arguable case, but not, to my mind, a particularly strong one.
The matters that are important and need to be weighed carefully are whether the appeal will be rendered nugatory if a stay is not granted and a weighing up of the hardship to either party if the stay, is, or is not granted.
There is some substance to the Wife’s arguments that her appeal would be rendered nugatory, as she would be required to pay out the sum of $95,000.00 to the Husband and it is contended that he would not be in a position to repay that money if the appeal were to succeed.
There is also some substance to her claim that she would suffer a degree of hardship if she had to pay the amount of $95,000.00, as it is a substantial sum of money and she claims that it is part of the capital upon which she draws interest to meet her living expenses. True it is that the amount of $95,000.00 is less than the amount of $110,000.00 which the husband originally sought, but it is still a significant amount of money.
Against this, there will be some hardship to the Husband if he were not to receive the money from the judgment. It is relevant that the purpose of the order was to establish a “level playing field” by putting the Husband in sufficient funds so that he would have suitable legal representation for the forthcoming litigation. If he were not to receive any of the money, he may not be in a position to proceed.
This Application is an interlocutory application and is concerned only with what should happen until the Wife’s appeal is heard and decided. The Husband will not need $95,000.00 for that purpose. However, he will need funds to defend the Wife’s appeal, however meritorious or unmeritorious that appeal may be.
Accordingly, I propose to stay the orders conditional upon the Wife paying to the Husband a lesser sum, which I have estimated at $30,000.l00, which should assist with his legal expenses for the appeal proceedings. A payment of $30,000.00 would not impose a significant hardship on the Wife, in my opinion.
The Future Progress of the Matter
The substantive application, for property and parenting orders, has been listed for hearing on 27th and 28th February 2014. It now appears highly unlikely that two days will be sufficient for the matter to be heard, noting the way that the parties have chosen to litigate the matter so far. There have now been three separate interlocutory applications since the matter commenced.
It appears to me that the final hearing will take in excess of four days of hearing time. Thus, under the Protocol for the division of work between the Family Court of Australia and the Federal Circuit Court of Australia, the proceedings should be transferred to the Family Court for hearing.
I propose to transfer the proceedings to the Family Court under s.39 of the Federal Circuit Court of Australia Act 1999 (Cth).
I certify that the preceding sixty-four (64) paragraphs are a true copy of the reasons for judgment of Judge Scarlett
Date: 3 October 2013
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