KIDD & KIDD - [2013] FamCAFC 156

FAMILY COURT OF AUSTRALIA

KIDD & KIDD

[2013] FamCAFC 156

FAMILY LAW – APPEAL – application in an appeal for extension of time.

Family Law Act 1975 (Cth)
Evidence Act 1995 (Cth)

Jackamarra (an Infant) v Krakouer (1998)195 CLR 516 528
General Steel Industries Inc (1964) 112 CLR 125
Gallo v Dawson (1990) 93 ALR 479
Strahan & Strahan [2011] FLC 93-466

APPELLANT:

Ms Kidd

RESPONDENT:

Mr Kidd

FILE NUMBER:

SYC

5925

2012

APPEAL NUMBER:

111

2013

DATE DELIVERED::

9 October 2013

PLACE DELIVERED:

Sydney

PLACE HEARD:

JUDGMENT OF:

Ainslie-Wallace J

HEARING DATE:

9 September 2013

LOWER COURT JURISDICTION:

Federal Circuit Court

LOWER COURT JUDGMENT DATE:

28 June 2013

LOWER COURT MNC:

[2013] FCCA 684

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Mr Lloyd SC

SOLICITOR FOR THE APPELLANT:

Reid Family Lawyers

COUNSEL FOR THE RESPONDENT:

Mr Gould

SOLICITOR FOR THE RESPONDENT:

York Family Law

Orders

Application to extend time in which to lodge an appeal against the orders of Judge Scarlett of 17 June 2013 is refused.
The wife pay the husband’s costs of and incidental to the application, such costs to be agreed or assessed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Kidd & Kidd 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 111 of 2013
File Number: SYC 5925 of 2012

Ms Kidd

Appellant

and

Mr Kidd

Respondent

REASONS FOR JUDGMENT

Ms Kidd (“the wife”) seeks leave to bring an appeal against an interim property order made by Judge Scarlett on 17 June 2013 in favour of Mr Kidd (“the husband”) for interim property orders. The wife requires a grant of leave because her notice of appeal was filed ten days after the time prescribed for the lodging of appeals. The husband opposes the granting of leave.
The parties have applications before the Federal Circuit Court in relation to property and parenting issues. On 13 June 2013 the husband applied for an interim order that sought the release to him of $110,000 from a certain bank account in which funds of the parties are held. The wife opposed the application.
The judge, after hearing submissions, made orders that caused the release of $95,000 to the husband. It is from this order that the wife wishes to appeal.

Background

For the purpose of giving context to the application, I set out some background taken from his Honour’s reasons.
The parties were married in October 1997 and separated in March 2012. They have three children who live principally with the wife and who are aged about 13, 11 and eight years.
The former marital home of the parties has been sold and the net proceeds of that sale, some $1,400,000 is held in an interest bearing account in the names of the parties pending final orders. It is from this fund that the husband sought the release of funds to him. It appears that the wife is using the interest or perhaps part of the interest to pay the rent in her present accommodation
According to the judge’s reasons, the husband sought funds to meet his anticipated legal fees. Evidence before the judge set out the calculation of the amount based on his solicitor’s assessment of prospective fees.
In addition to the funds held in account, the husband has a superannuation entitlement of about $1,212,586 and the wife has a superannuation entitlement of $103,089.
The husband’s income is in the order of $6,000 per week.
It was argued for the husband, that consistent with authority, he seeks a payment to him of some of the money which would be determined to be his after a hearing of the property proceedings. In support of this submission, it was observed by the judge that the husband’s application amounted to 7.3 per cent of the liquid funds of the parties. Further as his Honour recorded, at [16] it was argued in support of the husband’s application that “it is almost inconceivable that the husband will not receive at least $110,000 of the monies held on trust for the parties” The submission made on behalf of the husband as his Honour recorded at [17] was that “it would hardly be just and equitable for a Court to order that the wife should receive the entire liquid asset, namely the amount of approximately $1,499,000 consisting of the net proceeds of the sale of the home.”
His Honour recorded the submissions made on behalf of the wife in which it was asserted that the husband had failed to demonstrate that he was likely to obtain an order in excess of the funds that he sought released; that there would be no prejudice to the wife if the order was made and that he had made a full and complete financial disclosure [19] and [20].
The judge considered the wife’s argument that the husband had not made a full and frank financial disclosure at [23]. He said:
23. Further, it is submitted that the husband has not made a full and frank disclosure of his financial situation. In paragraph [31] of the husband’s affidavit dated 10 June 2013 he refers to having sold some shares to help pay legal fees. He paid legal fees to a barrister of $10,000.00 on 1 May 2013 but still owes the barrister approximately $17,000.00.
24. The husband claims to have no borrowing capacity but Mr [W] deposed in his affidavit that the husband deposited the sum of $10,000.00 into his firm’s trust account on or about 12 June 2013. He has now paid another $17,000.00 odd owed to his barrister. This money apparently came from some back pay he received from his employer, which answers his assertion that he has no financial resources available. The receipt of this money is not recorded in any affidavit.
His Honour found that although the husband has a far greater earning capacity that the wife, he does not have access to funds necessary to instruct his lawyers, and further found that it was in the interests of justice that the husband have the ability to instruct lawyers [39]. He continued:
40. It is certainly not the case that the amount sought by the husband would be more than he would expect to receive at a final hearing. Whilst the wife opposes any order that would touch the funds held on deposit that are earning interest that goes to her for the purpose of paying her rent, I am not satisfied that the situation is so crucial that any diminution of the amount currently held would cause her hardship so that she could not continue to meet her rental payments.
His Honour in line with the authority of Strahan& Strahan [2011] FLC 93-466 considered the circumstances of the matter as he understood it at [53] and concluded:
53. Taking all of those matters into account, it is hard not to agree with the submission by Senior Counsel for the wife that her entitlement is likely to exceed 55% of the asset pool.
54. It does not necessarily follow, however, that the property proceedings would necessarily lead to orders that the husband were to retain his superannuation untouched and the wife would retain all of the proceeds of sale of the former matrimonial home. Such an outcome appears to be so simple as to be simplistic, and, as
Mr Gould submitted, the Court would need to be satisfied that such an outcome was just and equitable. That may be the case, but I would only be able to make such a decision after hearing the evidence and submissions.
His Honour concluded that it was in the interests of justice that an order be made in the husband’s favour and he said that any sum distributed in this way would have to be; “not one that would give the husband more than he was indubitably entitled to on a final hearing and must be capable of variation or reversal at any time without resort to s 79A or appeal.” [55]
On 2 August 2013, the wife obtained a stay of the judge’s orders. The stay was conditional on a payment to the husband of $30,000. That sum has been paid. The respondent argued that the substance of the wife’s proposed appeal was in relation to the balance outstanding, $65.000.

The application for leave to extend time

The principles by which this application falls to be considered emerge from Gallo v Dawson (1990) 93 ALR 479 are found in the judgment of McHugh J at 480. His Honour said:
The grant of an extension of time under this rule is not automatic. The object of the rule is to ensure that those Rules which fix times for doing acts do not become instruments of injustice. The discretion to extend time is given for the sole purpose of enabling the Court or Justice to do justice between the parties. This means that the discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the applicant. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time. When the application is for an extension of time in which to file an appeal, it is always necessary to consider the prospects of the applicant succeeding in the appeal. It is also necessary to bear in mind in such an application that, upon the expiry of the time for appealing, the respondent has "a vested right to retain the judgment" unless the application is granted. It follows that, before the applicant can succeed in this application, there must be material upon which I can be satisfied that to refuse the application would constitute an injustice. (citations omitted)
The draft amended notice of appeal raises three proposed grounds.
1. That his Honour’s orders constitute a substantial injustice to the wife insofar as his Honour had access to the Wife’s Conciliation Conference Documents which was tendered by Counsel for the husband in error and without notice, at the hearing of the proceedings.
2. His Honour erred in failing to place sufficient weight on the Husband’s failure to provide full and frank disclosure of his financial position in the light of his Application
3. His Honour erred in failing to place sufficient weight on the hardship occasioned to the Wife which would be incapable of being remedied at a final hearing.
The orders of the judge being interlocutory, require the wife, if time be extended to seek leave to appeal. The draft amended notice of appeal contends, as to the issue of leave (and after setting out the facts of the matter):
….
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.
7. His Honour erred in failing to place sufficient weight on the Husband’s failure to provide full and frank disclosure of his financial position in the light of his Application
8. His Honour erred in failing to place sufficient weight on the hardship occasioned to the Wife which would be incapable of being remedied at a final hearing.
For the husband it was submitted that the wife, in any event, could not establish error of principle or significant injustice sufficient to warrant a grant of leave to appeal and thus, to extend time to appeal would be futile.
The wife’s solicitor swore an affidavit in support of the application for extension of time. In it she raises a matter which, it is submitted caused substantial injustice to the wife in the making of the orders by the judge and which, of itself, should ground an extension of time.
The assertion of substantial injustice appears to be argued both in support of the merit of the appeal itself and in relation to leave and is a matter that is relevant to a determination of whether to grant an extension of time to appeal.

Substantial Injustice

It is asserted that his Honour had before him a document which contained offers made by the wife for the purposes of a conciliation conference and that has infected his Honour’s decision making process.
The circumstances on this issue are somewhat complex and it is appropriate to set out in some detail what occurred in order to understand the argument of the wife on this point.
In his submissions in support of the husband’s application for interim property settlement, counsel for the husband made submissions to the judge on the likely outcome of the property proceedings, in particular, the order in the husband’s favour. He identified that, apart from some other, minor assets, the major assets of the parties were the funds in the bank account and the husband’s superannuation, estimated to be worth about $1.25 million. Thus he argued, the amount that the husband sought by way of interim property distribution represented about 7.3 per cent of the cash. He said:
….The wife’s evidence is that she is up to date, I think, with her legal fees. The husband has had a difficulty paying his legal fees. The husband also pays the school expenses of just under $700 per week. The conciliation conference document, your Honour, presented by the wife was that she should be entitled to 65 per cent of the assets and the husband 35 per cent.
(transcript 17.6.13 page 4 line 27)
He continued and said:
Mr Gould: Your Honour, we can have placed before your Honour if it’s of assistance to the court, the balance sheet used earlier this year by the registrar at the conciliation conference, and indeed, the wife’s conciliation conference documents should your Honour wish to see that, and indeed, the husband’s, but I’ve given your Honour the figures from the balance sheet, but if your Honour finds it helpful I will hand up a copy of the balance sheet.
His Honour: Yes, I’m happy enough to see those if there is no objection. If you could hand those to my associate….
(transcript 17.6.13 page 7 line12)
Later, in reply to submissions made on behalf of the wife, counsel for the husband said:
Mr Gould:…But it’s more than covered, your Honour, and even if your Honour gives the $110,000, the wife would not be worse off. Your Honour, in saying that the wife’s interest in the whole of the $1.5 million must be protected at all costs, with respect, can’t be right. When one looks at conciliation conference document, she said:
Of that I should take 1.25, the balance to the husband.
Mr Lloyd: You can’t – I object to my friend talking about any resolution of the matter at a conference, it’s just inappropriate.
Mr Gould: It wasn’t resolved and I’m talking about the wife’s own document.
Mr Lloyd: Well, it’s inappropriate and I ask my friend to withdraw it immediately.
Mr Gould: Your Honour, the wife in her material has referred to the conciliation conference in terms of what the husband said in a document of his.
His Honour: Can you point me to that please.
Mr Gould: In her affidavit, your Honour, sworn on 2 May at paragraph 21 to be found on page 7.
His Honour: The one that refers to the joint balance sheet.
Mr Gould: It does, your Honour.
Mr Lloyd: It only refers to the joint balance sheet I think, unless my friend has got another affidavit.
His Honour: It does refer to the joint balance sheet specifically.
Mr Gould: It refers to the - that refers to the joint balance sheet, your Honour.
His Honour: Yes. Well, I’m prepared to accept that the joint balance sheet has been put in the public domain, although I don’t think it covers anything else.
(transcript 17.6.13 page 13 line 33 to page 14 line 18)
On 17 June 2013, after the hearing concluded, the wife’s solicitor wrote to the solicitor for the husband asking that it be confirmed that:
“When your counsel…handed up the Balance Sheet to his Honour, that he did not include with that tender, a copy of our Conciliation Conference document. If he did, please write to his Honour and ask him to disregard the Conciliation Conference document”.
On 25 June 2013 the husband’s solicitor replied:
…
“We note that your client’s Conciliation Conference document was handed up to his Honour however it was not made an exhibit. We also note that Counsel for your client invited His Honour to ignore the Conciliation Conference document.
In any event we have written to his Honour’s associate asking him to disregard the Conciliation Conference document which was handed up with the Balance Sheet.
…
I interpolate here that, it seems that at this time the husband’s solicitor was in some confusion about what was said during the hearing, perhaps because he did not have the benefit of a transcript of those proceedings. It seems clear that the wife’s counsel did not make the submission to the judge as indicated in the letter, however, nothing turns on this.
Such a letter was in fact written to the judge’s associate.
The judgment in the matter was delivered on 28 June 2013.
On 29 July 2013 the wife’s solicitor wrote to the husband’s solicitor and said, inter alia:
…
I have today had the opportunity to inspect the Court file being my first opportunity since my return from leave. The Conciliation Conference document remains on the Court file. Further, the document is highlighted. It is unknown whether your counsel handed up a marked up copy of the document or whether His Honour highlighted the document in the course of considering the matter.
We are instructed to seek that Judge Scarlett be disqualified from hearing this matter going forward. In these circumstances, we are seeking your client’s consent to discharging the Orders made 28 June 2013.
The letter indicated that if the husband’s solicitor was not prepared to consent to the discharge of the judge’s orders, she would lodge an appeal from those orders.
An application was made on 2 August 2013 to the judge that he disqualify himself.
In the course of the hearing of the application, his Honour said:
His Honour: Well, for what it’s worth, I was not even aware, I think, of a conciliation conference document. I remember there was some discussion of it at the time and I remember objection was taken and you will note from the decision handed down that there was, in fact no reference to it. I don’t read things that aren’t….
(transcript 2.8.13 page 3 line 12)
It is not immediately apparent whether the Conciliation Conference document would only be on the file by reason of it being handed up during the course of submissions on the husband’s application however, accepting that it is so, the judge’s comments make it clear that he was unaware of it and had not read it.
What is asserted, either in terms or by implication on the application for leave to appeal is that the Conciliation Conference document was placed before his Honour; it contained offers by the wife and those offers were inconsistent with the position taken by the wife opposing the husband’s application for interim property orders; the document and the offers were read by the judge and they affected his determination of the issue before him.
Apart from establishing that the Conciliation Conference document was handed to the judge with the parties’ joint balance sheet, the wife has not established that any “substantial injustice” was occasioned to her by reason of the document sufficient to warrant, of itself, a grant of leave to appeal out of time. I observe that the Conciliation Conference document appears to be, in any event, protected from disclosure by reason of s 131 of the Evidence Act 1995 (Cth).

Delay

As I have said, the delay in bringing the appeal is one in the order of 10 days.
As to the delay, the solicitor says that she left the country on

20 June. She returned around 16 July. On 29 July, which she said was her first opportunity to do so, she inspected the court file, and found that the wife’s Conciliation Conference document was on the court file. She said that because of an administrative oversight, the letter from the husband’s solicitor of 26 June had not been brought to her attention and she had assumed that there had been no response to her letter of 17 June.

After examining the file on 29 July, she obtained instructions to lodge an appeal.
Time for filing the appeal had then expired.
The solicitor accepts that any delay in bringing the appeal and thus the necessity to seek leave was through her oversight.
Were delay in bringing the appeal and the explanations for it the only factors to be considered here, a grant of extension of time would be given. Although counsel for the husband argued that it was no excuse for the wife’s solicitor to rely on being on leave, I am of the view that her explanation for the delay is entirely adequate.

Prejudice

Although the husband pointed to no particular prejudice that would be occasioned to him if leave was granted, I take into account that a grant of leave brings with it the expenditure of further costs and the engagement of further litigation in a case in which, at first glance, the issues appear to be relatively straight forward. Further, the husband is unable to use the so much of the ordered funds as remain to be paid pending determination of the wife’s appeal.
It was not submitted by the wife to the judge that the order, if made in the husband’s favour, would never be able to be recouped if it was, ultimately decided that she would retain the whole of the funds in the bank account.

Merits of the appeal

It is to be noted at the outset that the assessment of the prospects of a proposed appeal for these purposes does not require the applicant to prove that the appeal will succeed, but there must be demonstrated an arguable case.
In Jackamarra (an Infant) v Krakouer (1998)195 CLR 516 528; Gummow and Hayne JJ said:
34. We do not think it useful to fasten upon one verbal formula in preference to all others as a description of the necessary degree of satisfaction. What must be shown is that it is clear that the appeal will fail and in that sense is not "arguable" or not "fairly arguable". Each of the formulae mentioned by Barwick CJ in the passage we have quoted from General Steel Industries Inc intends to convey that meaning. But, of course, if formulae of the kind set out in General Steel Industries Inc are applied in the case of an appeal, it is important to recall that the context is different. The boundaries of the field for debate between the parties on appeal have been set at trial. Before a proceeding has been tried there may well be considerable uncertainty about what evidence will be given and how that will affect the final identification of issues to be decided. Those uncertainties should have been largely resolved at trial and the material and the issues for consideration on appeal will ordinarily be readily identifiable. Is it clear, then, that those issues will be resolved against the appellant? (citations omitted)
The wife argued that the appeal had merit and it was argued that the judge failed to accord sufficient weight to the wife’s assertion that the husband had not made a full financial disclosure, failed to give sufficient weight to financial hardship occasioned to the wife if the funds were depleted by a payment to the husband and importantly because the hearing was unjust because the judge had been given the wife’s Conciliation Conference document.
The respondent, in opposing the application argued that the appeal being propounded is against an interlocutory order and thus leave must be obtained before any appeal could be heard. He argued that in this matter the wife has not demonstrated nor could it be said that any substantial injustice would arise if leave to appeal was not granted nor has she demonstrated an arguable case on appeal. It was submitted that the subject matter alone of the appeal, a sum of $65,000 demonstrates the lack of merit which would, it was said, result in no leave to appeal being granted.
There is force in the husband’s arguments as to the merits of the wife’s appeal, particularly in respect of the asserted substantial injustice; I am unable to find that if the time in which to lodge an appeal was extended, the wife’s application for leave to appeal would be successful. In those circumstances, it would be futile to grant the extension of time sought.

Conclusion

Having considered the above matters, I am of the view that the application for extension of time in which to appeal should be refused.

Costs

Counsel for the wife conceded that, if the application failed, he could not resist an order for costs in favour of the husband. That was a proper concession.

_____________________________________________________________________

I certify that the preceding fifty three paragraphs are a true copy of the reasons for judgment of the Honourable Justice Ainslie-Wallace delivered on 9 October 2013.

Associate:
Date: 9 October 2013