KRUGER & KRUGER

[2011] FamCA 898

FAMILY COURT OF AUSTRALIA

KRUGER & KRUGER [2011] FamCA 898

FAMILY LAW ─ PROCEDURE – Application to extend time for husband to serve an itemised costs account relating to costs order made by Full Court ─ Where to not extend time would allow the rules to visit an injustice upon the husband ─ Time for service by the husband of itemised costs account extended ─ Time for wife to file notice of dispute extended  

FAMILY LAW – COURTS AND JUDGES ─ Disqualification ─ Where in the circumstances the Court, as currently constituted, could not be seen to be totally impartial ─ Discussion of High Court authorities on neutrality/ impartiality of judiciary ─ Recusal order made

Aged Care Act 1997 (Cth)
Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth) r 1.14

British American Tobacco Services Ltd v Laurie (2011) 273 ALR 429
Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337
Gallo v Dawson (1990) 93 ALR 479

APPLICANT: Mr Kruger

RESPONDENT: Ms Kruger

FILE NUMBER: PAC 174 of 2007

DATE DELIVERED: 22 November 2011

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Coleman J

HEARING DATE: 22 November 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Jarrett

SOLICITOR FOR THE APPLICANT: Barringer Leather Lawyers

COUNSEL FOR THE RESPONDENT: Mr de Robillard

SOLICITOR FOR THE RESPONDENT: Kent Attorneys

Orders

1. That the further hearing of the husband’s application filed 2 May 2011, the wife’s application filed 3 August 2011, be adjourned to a date in 2012 before a Judge other than myself.

2. That within 28 days the parties file any amended application or cross-application. 

3. That by 31 January 2012 the husband is to file and serve an affidavit deposing to the actions taken by or on his behalf with respect to applications to the Department of Health & Aging pursuant to the Aged Care Act 1997 (Cth) made by him, or entities owned or controlled by him, or other entities by or on behalf of the husband or such entities.

4. That each party is to file and serve any further evidence, lay and expert, upon which each relies by 29 February 2012. 

5. That by not less than seven days prior to the date of the trial of the proceedings, any expert or asserted expert or experts who has or have sworn affidavits in the proceedings, are to confer with each other with respect to any controversial issues remaining from such expert opinion evidence and produce counter signed memoranda in relation to all matters in dispute and the basis of dispute with respect of each of such matters. 

6. Note that the Court has suggested that verified discovery and inspection of documents is appropriate but that counsel for the wife has not sought verified discovery and inspection of documents. 

7. That within 14 days of this date each party is to make available for inspection by the other party, any documentation to be produced in response to notices to produce which have hitherto been served upon each party, whether or not such notices to produce comply with the rules of the Court. 

8. Note that the husband, through his counsel, withdraws his opposition to the subpoena for production of documents directed to the Proper Officer, Department of Health and Aging, returnable this day. 

9. Further note that the husband will sign any authority necessary to enable designated or other officers of the Department of Health & Aging to comply with the subpoena for production of documents directed to the Department. 

10. That the return date of the subpoena to the production of documents to the Department of Health and Aging is extended to 10.00 am on 30 November 2011. 

11. That leave is granted to the husband, his solicitors and counsel to inspect documents produced on subpoena by the Department of Health and Aging on 30 November 2011 without the necessity for an order then being made. 

12. That in the absence of any other order the wife, her solicitor and counsel have leave to inspect documents produced by the Department of Health and Aging after 4.00 pm on Wednesday 7 December 2011, provided that liberty is reserved to either party to apply to me on 24 hours notice by telephone for an order in relation to this order to the intent that in the absence of the husband successfully applying for an order preventing the wife and/or her legal advisors from inspecting documents produced on subpoena by the Department of Health and Aging. Inspection of such documents shall be permissible as and from 4.00 pm on 7 December 2011. 

13. That pursuant to rule 1.14 of the Family Law Rules 2004 (Cth), the husband’s time for service of an itemised cost account, pursuant to the orders of the Full Court of 30 November 2010, is extended to 4.00 pm on 6 June 2011.

14. That pursuant to the said rule, the wife’s time to file an itemised notice disputing such itemised costs account, is extended by 28 days to 56 days from this date. 

15. That there will be general liberty to restore for directions on 72 hours notice by telephone before me. 

16. That both parties’ costs are reserved of an incidental to the proceedings before the Court this day.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Kruger & Kruger has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: PAC 174 of 2007

Mr Kruger  

Applicant

And

Ms Kruger

Respondent

REASONS FOR JUDGMENT

ex tempore

1. This is a simple issue relating to a costs order made by the Full Court. The effect of which was, if not inevitably to place the husband outside the time provided for by the rules, almost certainly to have that effect. Given that the Full Court’s order required the parties to seek to achieve an assessment of costs. 

2. The husband’s application raises a matter which the Full Court will in future need to be cautious of. The Full Court would not have intended that, during the time that the parties were ordered to seek to negotiate an agreed figure with respect to the costs it had awarded, either party, in this case the former respondent to the appeal, should be at risk of being out of time under the rules in relation to assessment of costs if agreement could not be reached as to their quantum. Conversely, the order would not have been intended to create a situation where rather than be out of time, the respondent to the appeal would make other than a genuine attempt to compromise the costs. 

3. Although it is not put this way the practical effect of the position advocated on behalf of the wife is probably that the rules would operate to deprive the husband, who was the successful respondent to the wife’s appeal before the Full Court, of the benefits of an order which the Full Court made for costs in his favour.

4. It is potentially a classic case of what McHugh J described in Gallo v Dawson (1990) 93 ALR 479 as the rules perpetuating an injustice. Logically, in circumstances where the order of the Full Court regrettably did not do what undoubtedly the Court would have intended, to not extend time would be to allow the rules to visit an injustice upon the husband.

5. The question of the explanation of delay becomes relevant to the exercise of discretion to extend time. With respect to the ingenuity of the submissions of counsel for the wife, the Court does not accept that, whatever the shortcomings in the husband’s provision of information with respect to issues surrounding the substantive orders for property settlement may, in the fullness of time, be shown to have been, this is a discrete and separate issue. It relates to a concluded appeal, in respect of which a costs order was made. Whether the costs are recoverable pending the conclusion of outstanding financial proceedings between the parties is another question. The Court is only concerned at this time with an application which seeks an order that pursuant to rule 1.14 of the Family Law Rules 2004 (Cth) (“the rules”), the time for service of an itemised costs account be extended to 6 June 2011.

6. The narrative in the solicitor’s affidavit, which with respect to counsel for the wife is in no way dependent upon the veracity of anything said by the husband, provides an adequate and understandable explanation of why things did not occur within the time which the rules imposed. It is also, as suggested earlier, a relevant fact or circumstance that the orders of the Full Court did create a somewhat invidious or potentially invidious position for the husband in any event.

7. The husband’s solicitor’s evidence, which in the main is corroborated by contemporaneous documents, establishes that he was instructed in the proceedings in mid to late January 2011. That is to say in relation to implementation of the orders of 27 November 2008, which survived appellate challenge as the judgment of the Full Court of 30 November 2010 confirmed, and the costs order then made. 

8. The solicitor deposed to his attempts to recover the file from the husband’s former solicitors. In his affidavit the solicitor refers to difficulties in that regard relating to the bulk of the file, which the Court readily accepts, having several boxes of it not one metre away at this moment, and the necessity for an exhaustive analysis of several boxes of documentation.

9. The solicitor deposed to what he then sought from the former solicitors of the husband. He did that expeditiously, although it must be said that by that time the husband was already out of time under the rules.

10. On 30 March 2011 an offer in relation to costs of the appeal proceedings was submitted to the attorneys for the wife. The only relevance of that offer is that an offer was made which was conduct consistent with the terms of the Full Court’s orders. That is to say, that the parties were requested to seek to resolve the issue of costs by negotiation. There was a response to that letter which is an annexure to the attorney’s affidavit. The response from the wife’s attorneys of 31 March 2011, which is annexure “G”, to the husband’s attorney’s letter, was that in order for the wife to properly consider the offer which was made on the husband’s behalf, a full breakdown of the amount was required. To the credit of the wife’s attorneys they did not there take the point that the husband was out of time in relation to the rules with respect to filing an itemised account or do other than, it can be presumed, seek to genuinely resolve the costs issue.

11. On 5 April 2011, that is less than a week later, the husband’s attorneys wrote to the wife’s attorneys enclosing a document which appears relevant to the inquiry which the wife’s attorneys had conveyed in their letter of 31 March 2011. There was further correspondence and that correspondence was largely, as the annexures to the solicitor’s affidavit reveal, correspondence initiated by the husband’s attorneys and sought to provide documentation which if accepted, provided some support for it. On 6 June 2011 the itemised account was forwarded. The narrative is then silent as the solicitor himself asserts. The explanation is in the Court’s view adequate.

12. The overriding consideration is the interests of justice. They point in this Court’s view clearly to the appropriate order being that the time be extended to 6 June 2011. The practical effect of which is that the rules in relation to assessment formally, and more usefully known as taxation, would take over.

13. In the event of a dispute the time for filing the wife’s notice of dispute is extended by 28 days. Time accordingly expiring 56 days from this day.

14. I will give the very briefest of reasons for the recusal order so it is on the record. The trial of the applications of the husband filed 2 May 2011 and the wife filed 3 August 2011, each of which, albeit it in different terms, sought to enforce various orders previously made by the Court on 27 November 2008, had not proceeded far when it became apparent that resolving the issues raised by the competing applications involved making findings with respect to credibility. Also, at least in some respects, particularly relating to actions by or on behalf of either of the parties with respect to licences issued under the Aged Care Act 1997 (Cth), the credibility of the parties was controversial, and the resolution of that controversy likely to assume significance in the Court’s determination of the competing applications.

15. The Court raised with counsel for the parties that having published several, from memory four, previous judgments, some of which directly involved the credibility of the parties, others which tangentially did, the Court could not be seen to be totally impartial. A fair minded lay observer may in the circumstances have been left with the impression that the Court would bring less than an impartial mind to bear on the disputed issues of fact which required determination.

16. Counsel for the wife who, with respect, it must be said had greater cause for apprehension in relation to a perceived absence of impartiality, instructed him to seek that the Court as currently constituted be recused from further hearing the proceedings.

17. The Court acceded to that application which was not supported by counsel for the husband who, with respect, sensibly, beyond recording that absence of support, did not make extensive submissions.

18. In the judgment of Heydon, Kiefel and Bell JJ in the High Court’s decision earlier this year of British American Tobacco Services Ltd v Laurie (2011) 273 ALR 429, their Honours, having referred with approval to what had earlier been said by the High Court in Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337, said (at paragraph 139) that:

    139.It is fundamental to the administration of justice that the judge be neutral. It is for this reason that the appearance of departure from neutrality is a ground of disqualification. Because the rule is concerned with the appearance of bias, and not the actuality, it is the perception of the hypothetical observer that provides the yardstick. It is the public’s perception of neutrality with which the rule is concerned. In Livesey it was recognised that the lay observer might reasonably apprehend that a judge who has found a state of affairs to exist, or who has come to a clear view about the credit of a witness, may not be inclined to depart from that view in a subsequent case. It is a recognition of human nature. (Footnotes omitted).

19. The facts of British American Tobacco Services (supra) were, in short, that the Judge of a subordinate Court in an interlocutory hearing had made a ruling which he then stressed involved no adverse finding with respect to credit and represented an outcome which he may, at a full hearing, have not again reached.  Notwithstanding the facts of the case, the High Court accepted that the Judge should recuse himself from further hearing the proceedings.

20. The bar is set high in terms of impartiality and as their Honours in British American Tobacco Services (supra) said, the need for the perception that the Judge who hears proceedings is indeed not only neutral, as I have no doubt that I would be, but more importantly is seen by all of the parties to be neutral.

21. The circumstances of the case render it appropriate that a recusal order be made, and, it is in the interests of the parties, given that credibility clearly is going to assume such significance in determining these proceedings, that someone who has not dealt with the case before, hear the proceedings.

I certify that the preceding twenty-one (21) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Coleman delivered on                 22 November 2011.

Associate: 

Date:  28 November  2011