LEWIN & LEWIN
[2014] FamCAFC 15
FAMILY COURT OF AUSTRALIA
| LEWIN & LEWIN | [2014] FamCAFC 15 |
| FAMILY LAW – APPEAL – leave to appeal – interlocutory application – against the inclusion of second respondent – procedural fairness. |
FAMILY LAW – PRACTICE AND PROCEDURE – Joinder –– whether there is a requirement to notify proposed respondent of joinder – where a joinder is a procedural order.
| Family Law Act 1975 (Cth) |
| Gronow v Gronow (1979) 144 CLR 513 Knight v Alesi (2007) 37 Fam LR 245 Qantas Airways v AF Little Pty Ltd (1981) 2 NSWLR 34 |
| APPELLANT: | Ms Lewin |
| RESPONDENT: | Mr Lewin |
| FILE NUMBER: | SYC | 822 | of | 2011 |
| APPEAL NUMBER: | EA | 43 | of | 2013 |
| DATE DELIVERED: | 14 February 2014 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Ainslie-Wallace J |
| HEARING DATE: | 5 November 2013 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 2 May 2013 |
| LOWER COURT MNC: | [2013] FCCA 180 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Stephen Thomas |
| SOLICITOR FOR THE APPELLANT: | McDonell Milne Toltz, Family Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr David Maddox |
| SOLICITOR FOR THE RESPONDENT: | Metta Legal |
Order of 5 November 2013
Grant leave to the appellant to add a fourth ground of appeal:
“Her Honour erred in making an order joining the Second Respondent to the proceedings.”
Order of 14 February 2014
Refuse leave to the appellant to appeal.
Appellant to pay the respondent’s costs of the appeal such costs to be agreed or assessed.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Lewin & Lewin 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 43 of 2013
File Number: SYC 822 of 2011
| Ms Lewin |
Appellant
And
| Mr Lewin |
Respondent
REASONS FOR JUDGMENT
This is an appeal by Ms Lewin (“the wife”) from orders made by Federal Magistrate Walker (as she then was) on 18 of March 2013 in property settlement proceedings between the husband, Mr Lewis, and the wife.
On what was to be the first day of trial, 18 March 2013, the husband sought to file a Further Amended Application in the proceedings (although the document was called an Initiating Application). The application sought to be filed named the wife’s mother, Ms W, as the second respondent to the property settlement proceedings and sought an order pursuant to s 106B of the Family Law Act 1975 (Cth) setting aside a mortgage executed by the wife in favour of Ms W. The amended application further sought an order that it be consolidated with the proceedings already filed.
The wife opposed the application.
Her Honour made the following orders:
1. The Applicant husband is given leave to file in Court an “Initiating Application” dated 15 March 2013 seeking an order as follows:
a. That, pursuant to s.106B of the Family Law Act 1975, an instrument being the mortgage encumbering the property at premises situated, and known as, [Property B], being registered mortgage …, the mortgagee of which is the Second Respondent, be set aside.
2. Following oral application on behalf of the Applicant Husband, the Court grants leave to join [Ms W] as Second Respondent to these proceedings.
Her Honour immediately stayed the operation of these two orders on the application of the wife who indicated through her counsel that she proposed forthwith to file a notice of appeal from her Honour’s orders.
The trial judge ordered the husband to pay the wife’s costs of the application.
I observe that there is no evidence before me that Ms W has been served with the filed application. She was not a party to the appeal and there was no appearance on her behalf.
Background
The husband and wife began cohabitation in 2000. Not long after the couple started living together there were conversations with the parents of both the husband and the wife about financial assistance for them to purchase a home.
Sometime either in 2004 or 2005 the wife’s mother gave the wife $450,000 which was to be put towards the purchase of a home for the couple.
After the parties separated the wife purchased a property. The husband asserted that she used some of the funds given to her by her mother to purchase that property and it is this property that secures the mortgage given by the wife to her mother, the subject of the husband’s s 106B application.
Appeal
The notice of appeal filed on 10 April 2013 contains three purported grounds of appeal:
1. That Her Honour erred in law by ordering that the Husband have leave to rely upon a Further Amended Initiating Application for property settlement seeking to join a Third Party without first giving notice to the Third Party thereby denying her procedural fairness and natural justice.
2. That Her Honour erred in law by ordering that the Husband have leave to rely upon a Further Amended Initiating Application for property settlement seeking to set aside a third party mortgage registered over the title to the Appellant’s home on the first day of a trial contrary to the principles set forth in Aon Risk Services Australia [sic] Limited v Australia National University [2009] 239 CLR 175.
3. In the event that the Full Court considers that leave to Appeal is necessary then that leave is sought.
Clearly, ground 3 is not a proper ground of appeal but a submission and I propose to consider it on the question of whether the appeal requires leave of the court.
At the commencement of the appeal, the appellant sought and was granted leave to rely on a third ground of appeal as follows:
4. That her Honour erred in making an order joining the Second Respondent to the proceedings.
Ground 1
It is convenient to first set out some basic principles which are uncontentious (or appear to be) in the appeal.
The Federal Circuit Court Rules 2001 (Cth) (“the FCC Rules”) provide that any person who is “necessary” to the “complete and final determination” of all matters in dispute in a proceeding must be included in the proceeding. A plain reading of the FCC Rules makes it clear that the term “included” there used means joined as a party.
Rule 11.02 provides that a party may include another person as a party by naming the person as a party in the application and by serving on that person a copy of the application.
Rule 11.04 provides that a party may apply to the court to be removed as a party from the proceeding.
I pause to observe that there is nothing new or novel about these provisions, they echo similar provisions in the Uniform Civil Procedure Act 2005 and the Federal Court Rules 2011 (Cth).
It was not suggested that the husband could not have (had the circumstances prevailed) joined Ms W as a party to the property proceedings with the wife from the outset, nor, I add could such a submission have sensibly been made. A plaintiff to proceedings has the right to choose whom to sue. In Qantas Airways v AF Little Pty Ltd (1981) 2 NSWLR 34 the plaintiff, Qantas sought to amend the statement of claim by including further defendants. The amendment was opposed but granted by a Master of the Supreme Court. On appeal to a single judge of the Supreme Court, the Master’s orders were set aside. The matter was then appealed to the NSW Court of Appeal. Glass JA said at 38:
The relevant procedural context discloses a plaintiff seeking leave after commencement of proceedings to add a party which he could have joined under r 2(1) without leave when filing his originating process.
The FCC Rules clearly contemplate that before a matter can commence the moving party must file an application which nominates other parties. A nominated person becomes a party after being included in a filed application and on the application being served on that person (r 11.02).
Obviously the FCC Rules do not contemplate nor require a person who will be included as a party to proceedings be notified before the application is filed in order to be given an opportunity to appear and be heard in relation to whether he or she is to be joined as a party.
Further, and again obviously, the rules contemplate circumstances in which parties may wish to be removed as a party to proceedings and r 11.04 provides a process by which that can occur.
However, once proceedings have commenced, and in respect of matters commenced in the Federal Circuit Court, the rules provide that a party may not be included without the leave of the court.
The argument and the asserted error of law rest on the proposition that before a party can be joined as a party to litigation once the proceedings have been commenced, procedural fairness requires that party to be notified of the proposed joinder and be given an opportunity to be heard on whether the order should be made.
In support of the proposition, counsel for the appellant relied on the general authorities referable to a party’s right to be heard before a proceeding is determined. None of those authorities is to the point. No authority was relied on to support the proposition that before a party is joined to proceedings the proposed party must be notified and given an opportunity to be heard in relation to the proposed joinder.
Counsel for the respondent referred to Knight v Alesi (2007) 37 Fam LR 245 in which leave was granted to join the mother of a party to proceedings already on foot and made an injunction requiring the mother to return funds transferred to her by the wife. Counsel observed that in that matter no notice was given to the party to be joined of the proposed orders and her Honour Bryant CJ said at [43]:
Thus, despite the short notice, I am satisfied that there is no injustice created to the wife's mother by joining her as a party. She was given plenty of warning that it was going to happen, albeit she did not have much time when the application finally came to her notice. As I will provide for her to have liberty to apply, she will be able to make representation in due course should she seek to be removed as a party.
Her Honour at [50] referred to procedural fairness and concluded that by giving the mother liberty to apply in relation to the orders made, the requirements for procedural fairness had been satisfied.
Although this case was relied on by counsel for the respondent as being some authority in relation to whether a party is required to be afforded an opportunity to be heard before being joined as a party to proceedings, I am disinclined to view it as such. Seminal to the decision in Knight was the mandatory injunction made ex parte of the wife’s mother. Clearly the matters to which her Honour referred in her reasons such as the giving of notice of the intended application and the liberty to apply are referrable not to the joinder of the mother as a party but to the injunction.
In this present matter, her Honour gave leave to the husband to file the amended application which named the wife’s mother as a party and by service on her of that amended application, the act of joining her was, it seems to me complete.
I am unpersuaded that any principle of law required Ms W to be given notice of any proposal that she be joined as a party to the proceedings and thus her Honour made no error of law.
This ground is not made out.
Ground 2
It seemed from the oral argument on the appeal that counsel for the wife conceded that this challenge was somewhat otiose, the amendment having been allowed, the matter adjourned and an order for costs made against the husband. However it was not formally abandoned and can be disposed of shortly.
This ground of appeal challenges her Honour’s exercise of discretion in allowing the husband to amend his application on the first day of the hearing.
In Gronow v Gronow (1979) 144 CLR 513 Stephen J at 519 said:
The constant emphasis of the cases is that before reversal an appellate court must be well satisfied that the primary judge was plainly wrong, his decision being no proper exercise of his judicial discretion.
A challenge to the exercise of judicial discretion is one not easily satisfied.
The wife’s submissions raise matters of fact before her Honour which, it is said ought to have led her to a different conclusion on the application then before her. Of course, the test is not whether another judge would have come to a different conclusion on the same evidence, but whether in coming to her decision to grant the leave her Honour was plainly wrong. She was not.
This ground has not been made out.
Ground 4
This ground of appeal asserts that her Honour made an error of law in making the order that Ms W be joined as a party to the proceedings. Although leave was given to add this ground of appeal, little oral argument was directed to it that was not otherwise relevant to ground 1.
It appears that the thrust of this ground is that in making the order that
Ms W be joined as a party to the proceedings her Honour made a final order which cannot be varied or challenged otherwise by appeal. That is, it was argued that the order deprived Ms W of the right to seek to have the order for joinder discharged.
In short, it was argued that her Honour’s order joining Ms W to the proceedings was a final order from which Ms W had no recourse but to bring an appeal. It was argued that had her Honour not made the order that Ms W be joined but had merely given leave to file the amended application which nominated her as a party, Ms W would have had the provision of r 11.04 available to her.
This argument is, in my view significantly flawed. First, there is nothing in the terms of the FCC rules that provide any support for the argument that an order that a party by joined is a final order. Further, the operation of r 11.04 clearly contemplates that a party may seek to be removed from proceedings. It is unlimited in its operation and nothing was put in argument by counsel for the wife that supported the interpretation of her Honour’s order advanced by him.
For the husband it was argued that, in any event, her Honour was obliged to make an order joining Ms W as a party to the proceedings because she was “a person whose participation is necessary to completely and finally determine all matters in dispute in a proceeding...” (r 11.01) I agree.
No error has been made out. This ground will fail.
Leave to appeal
The thrust of the wife’s argument on the appeal was that the order of the trial judge joining Ms W to the proceedings was a final order supports the wife’s contention that leave to appeal is not required.
I have found no substance in the argument that the order was one which finally determined the issue and thus was not interlocutory.
I my view the order permitting the joinder of Ms W was quintessentially interlocutory in nature. Thus leave to appeal is required.
No matter of principle or substantial injustice to the wife has been demonstrated by the appellant.
Leave will be refused.
Costs
Counsel for the wife conceded that if the appeal was unsuccessful, he could not argue against an order for costs. That is a sensible concession. Counsel for the husband sought an order for costs against the wife. It is appropriate to make that order, the appeal having been wholly unsuccessful.
I certify that the preceding forty nine (49) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Ainslie-Wallace delivered on 14 February 2014.
Associate:
Date: 14 February 2014
2
2
0