McCrae & McCrae

[2007] FamCA 1254

FAMILY COURT OF AUSTRALIA

MCCRAE & MCCRAE [2007] FamCA 1254

FAMILY LAW – APPEAL AGAINST DECISION OF FEDERAL MAGISTRATE – PROPERTY – Appeal from a discretionary judgment – Whether the trial judge erred in excluding monies from an inheritance and damages award - Section 75(2) Family Law Act 1975 – Whether the trial Judge should have made an adjustment in the wife’s favour – Husband’s overall financial position superior to the wife’s post-marriage - Appeal dismissed.

FAMILY LAW – APPEAL – COSTS – Failure to comply with directions - Respondent to pay appellant’s costs of further directions hearing – No order as to costs of the appeal.

Family law Act (1975) Cth

Ahmad v Ahmad (1995) FLC 92 57
CDJ v VAJ (1998) 197 CLR 172
Hickey (2003) FLC 93-143
House and the King (1936) 55 CLR 499
Nolanv Ingram (1984) FLC 91 585
Norbis v Norbis (1986) 161 CLR 513

APPELLANT: MS MCCRAE

RESPONDENT: MR MCCRAE

FILE NUMBER: BRM 4661 of 2004

APPEAL NUMBER: NA 31 of 2007

DATE DELIVERED: 24 October 2007

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: May J

HEARING DATE: 25 July 2007

LOWER COURT JURISDICTION: Federal Magistrates Court

LOWER COURT JUDGMENT DATE: 14 March 2007

LOWER COURT MNC: [2007] FamCA 203

REPRESENTATION

COUNSEL FOR THE APPELLANT: Mr Page SC

SOLICITOR FOR THE APPELLANT: Legal Aid Queensland

COUNSEL FOR THE RESPONDENT: Mr Forrest

SOLICITOR FOR THE RESPONDENT: Baker O'Brien Toll Solicitors

Orders

1. That the appeal be dismissed.

2. That the appellant pay the respondent’s costs of an incidental to the Application in a Case filed 11 July 2007 and the appearance, including that of counsel, on 18 July 2007 fixed at $2,200.00.

3. That there otherwise be no order as to costs of the appeal.

IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Full Court delivered this day will for all publication and reporting purposes be referred to as McCrae & McCrae

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE

Appeal Number: NA 31 of 2007
File Number: BRM 4661of 2004

MS MCCRAE

Appellant

And

MR MCCRAE

Respondent

REASONS FOR JUDGMENT

Introduction  

1. In a Notice of Appeal filed on 11 April 2007 the wife appeals from orders made on 14 March 2007 by Federal Magistrate Baumann. An amended Notice of Appeal was filed by leave on 19 July 2007. A direction was made pursuant to s 94AAA(3) of the Family Law Act (1975) Cth (“the Act”) that the matter be heard by a single Judge.

2. The property proceedings before the Federal Magistrate concerned the division of a small pool of property assessed by the Federal Magistrate at $167,091.00.

3. The orders made by the Federal Magistrate on 14 March 2007 in essence provided that the property be divided as to 65 per cent to the husband and 35 per cent to the wife and that:

   (1)The wife pay to the husband $112,575.00 and in default of payment by the wife to the husband that the wife vacate the home; and

   (2)Within thirty (30) days of the wife’s default, the wife transfer to the husband all of her right, title and interest in the property and the husband pay to the wife the sum of $55,425.00.

   (3)In addition, each party is to be solely entitled to the exclusion of the other to all other property in their possession.

Grounds of Appeal

1. The Wife was granted leave to rely on amended grounds of appeal filed on 19 July 2007. Those grounds are as follows:

   1.Having heard the contention made by counsel for the appellant that the property pool should not include the balance of the inheritance and personal injuries award to the husband, the Federal Magistrate erred in that he failed to add back property of the husband disclosed in his financial statement sworn 15 February 2007 having found that there was insufficient evidence to identify within any such funds the balance of the inheritance and damages for personal injuries.

   2.That the Federal Magistrate erred in having found that the inheritance obtained by the husband and the damages awarded for personal injuries should be considered in terms of s.75(2), he failed to consider such property and/or resources of the husband adequately or at all in determining any adjustment pursuant to s.75(2).

   3.That in determining that the property should be divided as to 60% to the husband, the Federal Magistrate erred in that he took into account property of the husband at the time of cohabitation without first considering the contributions of the wife to the maintenance of such funds in the period of the parties’ cohabitation.

Background

1. The parties commenced cohabitation in 1985 and were married on […] 1986. The husband and wife are 51 and 47 years of age respectively. During the marriage the parties resided in Australia and the United States, with their time in Australia spent predominantly between the Gold Coast and Perth. They settled in Queensland in 1991 with assets agreed then to be worth approximately $51,000.00 being monies in the husband’s bank account.

2. The child of the marriage, a son, was born on […] 1992.

3. In February 1993, the parties commenced the construction of a home using monies from the bank account of approximately $25,000.00 to secure the land and to cover the purchase costs. This property remains the most substantial asset in the property pool. There was some dispute as to the financial contributions of the parties and the construction of the home.

4. The marriage ended on the wife’s version in 1994 and on the husband’s in 1995/1996 but they remained living under the one roof. In August, 1995, the husband became bankrupt on his own petition.

5. The husband left the former matrimonial home in March 1998 and the parties have not cohabited since. The child of the marriage continued to reside with the mother in the former matrimonial home. Some time after March 1998, the wife borrowed money against the home for various purposes including a personal loan for a car. It was in her sole name.

10. In 2000, the husband received an inheritance from the estate of his late uncle of approximately $71,000 and entered into a loan agreement with his brother for a similar amount, also sourced from the estate. The moneys borrowed from his brother is an outstanding loan.

11. The husband was involved in a serious motor vehicle accident in 2002 and sustained injuries affecting his overall health and capacity for gainful employment. In March 2006 the husband received a personal injuries award of approximately $180,000 net.

12. The child began living with the husband in April 2005 as a result of an order made by the trial Judge in February 2005.

The Trial Judge’s Judgment

13. The trial Judge described the issues for determination by him in paragraph 4 of the reasons as follows:

a)the extent of the pool at this time;

b)the initial contributions by the parties;

c)the further direct financial contributions post the commencement of the relationship in late 1985;

d)the non-financial contribution to the construction of the [former matrimonial home];

e)The non-financial contributions in the role of homemaker and parent to separation (finally) in March 1998; for the period 1998 to 2005; and thereafter when [the child] commenced residing with the father from February 2005 to the trial;

f)The need for any adjustment for the relevant s 75(2) factors; and

g)The order which does justice and equity to the parties.

14. His Honour applied the four step process identified in the matter of Hickey (2003) FLC 93-143 a well settled principle.

15. In determining the value of the property pool, his Honour described the issues and how the case was conducted. These findings directly relate to ground 1. Commencing at paragraph 15 the Federal Magistrate said:

15.While the usual approach is to identify and determine the value of all assets and liabilities at the date of hearing, in some cases a departure from this approach is proper. Mr Hiscock, for the wife, in his final address began by contending that the pool should not include the balance of the inheritance and personal injuries’ award. Mr Forrest was prepared to support such a submission extending the “exclusion” of assets to the husband’s modest superannuation entitlement.

16.I am prepared to adopt the position taken by both counsel for the following reasons:

a.it is not contested that final physical separation occurred in 1998, with the husband saying separation under the one roof occurred earlier. The wife advised Centrelink that she separated on 26 August 1994. Little, ultimately, turns upon this difference;

b.the husband received an inheritance from his uncle’s estate in 2000 (about six years after the earliest alleged separation). The wife does not assert any contribution to that inheritance. The husband’s entitlement is approximately $71,000, but he has borrowed his brother, [M]’s entitlement from him (referred to in a loan agreement dated 15 December 2004). The husband at par 12 says he expended the funds on:

i.living expenses over the last seven years;

ii.child support;

iii.legal expenses.

It is difficult to assess on the evidence how much of the funds were expended on which category of expenses (save for the child support which is very specifically detailed), and whether any funds remain and form part of the net funds still in the husband's possession revealed in his financial statement sworn 15 February 2007 of approximately $76,700 ($148,876 less brother's loan of $71,264).  Excluding the balance of funds (and the brother's debt), obviates the need to determine whether any notional add backs are required.  I do not see how the wife is disadvantaged by this approach.  Her counsel concedes as much.

c.Similarly to the inheritance, the net funds of $180,815 received in  March 2006 from a motor vehicle accident claim for personal injuries arose well after separation and even divorce. The accident occurred on 14 June 2002. Since then the husband says he is not engaged in any paid employment. He received workers compensation payments after the accident, however when he finally received his damages award, such earlier payments would have been refunded from his award. At par 9 of his affidavit the husband says how he has expended those funds on a range of commitments for himself and [the child] totalling $35,000. This included ongoing medical expenses:

“In the sum of at least $140 per week”.

The husband was not challenged on this evidence and I accept what he says.

d.I also agree, consistent with this “asset by asset” approach that the husband’s superannuation should be excluded from the pool at stage 1 of the analysis. It arises from employment post-separation to which the wife made no contribution, other than the indirect contribution of caring for [the child]. During the period of accumulation (being essentially occupational superannuation from the husband’s employment), the husband was making regular and significant child support payments to the account referred to in annexure “DJM4” and the wife had the benefit of living at home. I also, for those reasons, exclude this “asset” from the pool.

17.The approach in excluding the assets from the pool does not, of course, mean that the benefits remaining are to be ignored. They become part of the factual matrix to be considered under the s75(2) factors.

16. The appeal concerns an argument about how the Federal Magistrate treated the inheritance and damages and the weight given to the parties’ various contributions. In relation to ground 3 the Federal Magistrate made findings in relation to contributions:

24. a)I accept the husband's evidence that at the time of cohabitation he had funds of approximately $85,000 - $100,000.  He gave cogent particulars of the source of those funds.  There was also a supporting affidavit in evidence of his former business partner.  The wife had few assets at that time

b)Between 1985 and after their marriage in November 1986, until finally returning permanently to Australia in 1991, this childless couple enjoyed a lifestyle which was filled with travel; returning to Australia; employment in both the USA and Australia; and, the husband concedes, some unsuccessful share trading. The husband acknowledges losing some $20,000 - $30,000 during this period. It is not possible to determine how much of the savings of $51,000 remaining in 1991 represented the earlier capital introduced in 1985 by the husband. Certainly, I am not convinced to the requisite standard that the wife introduced any “gifts” from her mother, as she alleged. Whilst originally the wife asserted the Bank of America documentation confirmed such gifts, under cross-examination and confronted by the husband’s banking records for the Challenge Bank and Chase AMP Bank, her claim was unsupported. I take the view that most, if not all, of the funds of $51,000 available to the parties in June 1991 (see exhibit 8) with the balance at 30 June 1991 being $50,639, represented part of the husband’s initial contribution. They clearly would have spent during that course of that five years, money they earnt on normal lifestyle expenses as well.

c)The wife said she had $21,750.93 on 11 February 1993.  The wife relies upon a document said to be in the husband's handwriting which confirms that fact.  On more than one occasion she asserted whilst under cross-examination that she had evidence of those personal savings:

“in my passbook”.

In re-examination I specifically invited the wife, who said she had the evidence, to produce it.  She left the witness box to search her handbag and records.  The document attached to her affidavit filed 26 February 2007 is the only document she could find.  But it proves nothing in my view.  Furthermore, at no time did counsel for the wife put that document to the husband for an explanation.  It has not been proved to any requisite standard that it is even in his handwriting.

d)I am satisfied the dominant reasons the land [of the former matrimonial home] was registered in the sole name of the wife was as an "asset protection" strategy. Considering the husband, a [labourer] by occupation, went bankrupt on his own petition in August 1995 (but two years later), the strategies made in hindsight be regarded as prudent.  The evidence supports the finding that the savings of $51,000 were used to purchase the land and towards construction costs.  The parties borrowed $60,000 from National Australia Bank.  The husband, after completing a course through TAFE to satisfy the requirements of the Building Services Authority, was the owner-builder.  I accept his evidence that he devoted considerable personal time on the construction, as he alleges.  Certainly other tradespeople were engaged (e.g. carpenter, electrician), and materials were sourced and paid for.  I accept the wife helped, as she was able to do so - including some labouring, ordering and supervision.  It must be recalled that by this time the couple's child […], had been born and the mother was, I accept, heavily involved in his care.  The value of the constructed improvements exceeded the actual moneys expended and this was due, substantially, to the husband's efforts;

…

25.When I take the husband’s direct financial contributions at cohabitation, coupled with his extensive non-financial contributions to the home’s construction into affect (and considering the decision of Pierce & Pierce [1998] 24 FamCA 74 compels trial adjudicators to consider the use of those contributions in creating any assets of significance, the home) a sizeable adjustment in the husband’s favour is justified.

26.However, I must take into account the almost sole parenting contribution of the wife, especially from around 1995 to 2005 which, whilst financially supported by the husband, was a significant commitment by the wife.

27.On balance, I regard a contribution based adjustment of 60 per cent to the husband and 40 per cent to the wife is appropriate.

1. As to ground 2, in addition to the reference to s.75(2) in paragraph 17 of the judgment, ultimately after considering the relevant s75(2) factors his Honour said:

   30.The husband has the benefit of a slightly larger share of the assets (as a result of this decision); the small superannuation entitlement; the remaining funds from his personal injuries award (presuming he repays his brother, [M], which I do). He will have to meet the needs of [the child], both physically and emotionally without any real contribution by the wife. Regrettably, since [the child] came into his father’s care, the child has not sought any further relationship with his mother and that relationship is currently estranged.

   31.On balance, in my view, a small adjustment in the husband’s favour is indicated. The husband’s counsel says 5 per cent, which on this small pool amounts to only about $8000. I regard such an adjustment fair and proper considering the age of [the child] and the other factors referred to above.

Appellate Principles

1. In view of the nature of this appeal, it is appropriate to make reference to the established principles governing an appeal against a discretionary judgment. In the case of a discretionary decision, it is only where the effect of the orders exceeds the generous ambit within which reasonable disagreement is possible, and is, plainly wrong, that an appellate court is entitled to interfere. (See Norbis v Norbis (1986) 161 CLR 513 and Kirby J in CDJ v VAJ (1998) 197 CLR 172 at 230).

19. The guiding light remains House and the King (1936) 55 CLR 499, at 504-55:

It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance.

20.  As a matter of firmly established appellate process it is necessary first to establish whether there is any recognised ground for the review of the discretionary decision of the trial Judge consistent with these principles. Disagreement only on matters of weight or preference for a different result does not usually justify the reversal of a first instance discretionary judgment.

The Appellant’s Submissions

21. The appellant’s submissions fell under three heads.

22. The first ground was submitted as an adjunct to the third ground, the exclusion by the Federal Magistrate of the balance of the inheritance and the award for damages from the pool of property on the premise that there was an admission by counsel for the wife at trial that they should be excluded from the pool of assets.

23. The second limb of the appeal as submitted by counsel for the appellant was the adjustment his Honour made having regard to the factors in s 75(2) which was five per cent or a 10 percent differential.

24. The third ground, in essence, concerned the weight that the trial Judge gave to various factors leading to the contribution-based adjustment of 60 percent to the husband and 40 per cent to the wife. Counsel described it as a “20 percent differential”.

25. It was properly conceded by counsel in the appeal but it is also clear from the transcript that a concession was made by counsel for the appellant at trial that the pool should not include the balance of the inheritance and personal injuries award. It was however submitted that in some other way the Federal Magistrate needed to properly assess the extent and nature of that property held by the husband. The submission in this respect included that as there was apparently some doubt as to the nature and origin of those funds they should have been added to the pool in some way or otherwise considered. This submission is difficult to appreciate in view of the concession made by counsel at the trial.

26. It seems that the argument is that it was impossible for the trial Judge to determine to what use the money had been put and might have included earnings of the husband in addition to moneys received from the inheritance and damages claim. Ultimately it appears that this argument really is that the wife should have received a greater percentage of the property. This submission connects with ground 3 in that it was argued that the weight described as a 20 per cent differential in relation to contributions was not open on the evidence.

27. Further, it was argued that there was an error in relation to weight given to the property of the husband at the time of co-habitation and purchase of the land without considering the contributions of the wife. Reference has already been made to the extensive findings of the trial Judge. Counsel was not able to demonstrate any error in relation to these findings.

28. In relation to ground 2, it was submitted that the crux of the appeal was that his Honours conclusions in relation to contribution and s.75(2) was not within a reasonable range. Further it was argued that there should have been no adjustment by reason of s.75(2) factors because on the basis of contribution the husband has a greater share of the asset pool and other assets. There is no merit in this argument. It can be seen from the reasons that the trial Judge both considered all relevant matters and that the decision is well within his exercise of discretion.

The Respondent’s Submissions

29. Counsel for the respondent addressed each of the appellant’s heads of appeal under the same headings.

30. Firstly, with respect to ground 1 of the appellant’s argument, counsel for the respondent submitted that the Federal Magistrate did not err in principle by not including the balance of the personal injury settlement and the inheritance in the property pool particularly as counsel for the appellant conceded at trial that those sums should not be included as part of the property to be divided.

31. It was submitted that on the respondent’s unchallenged evidence only $148,876 remained of those larger amounts at trial, the balance having been spent on child support payments, medical and dental expenses, general living expenses and legal fees. The respondent said in his affidavit (filed on 15 February 2007) that he had already spent all of the inheritance money.

32. With respect to his Honour’s statement in paragraph 16(b) that “it is difficult to assess…whether any funds remain and form part of the net funds still in the husband’s possession”, counsel for the respondent argued that the husband’s unchallenged evidence clearly indicated that only $3,500 of the total sum of $148,876 could possibly have remained from the inheritance or some other source. The Federal Magistrate accepted that the respondent had spent approximately $35,000 of the damages settlement of $180,815. It was argued that it would be inequitable to include the bank account in the property pool simply because there was some doubt about the source of the $3,500 discrepancy. Furthermore, it would be highly unlikely that this amount might somehow have originated from the marriage, given that the husband worked post-separation until his accident and the parties separated over ten yeas ago.

33. Finally, counsel for the respondent submitted that if an argument was to be made for the inclusion of the $148,876 in the property pool then this argument should have been presented at trial. He referred Nolanv Ingram (1984) FLC 91 585 and Ahmad v Ahmad (1995) FLC 92 57, authorities for the proposition that parties are bound by the course adopted by their legal representatives at first instance. On the same basis, the respondent’s $71,084 liability owed to his brother would also have to be taken into account in determining the pool.

34. With respect to the contribution-based division of the property pool being ground 3, counsel for the respondent submitted that the argument advanced by the appellant really challenged the weight apportioned to the various contributions of both parties, rather than the actual findings of the Federal Magistrate.

35. It was further submitted that various matters in respect of the parties’ contribution, including the rejection of the wife’s claim of contributing a separate sum of $21,750 (paragraph 24(c) of the Reasons) to the property and the finding that the savings of $51,000 were used to purchase the land and towards the construction costs (paragraph 24(d) of the Reasons), render any “disagreement with the correctness of his decision…difficult to discern”. This is no doubt so because there was no real challenge to the findings of fact on the appeal.

36. Reference was made to the effect that the inclusion of the post-separation assets would have on this division. It is sufficient to note that counsel for the respondent submitted that a 60/40 division would have been inappropriate had the post-separation assets been included in the property pool.

37. With respect to the second ground of the appeal, regarding the s 75(2) matters, it was argued that the appellant’s contention that the Federal Magistrate failed to consider the funds obtained by the respondent by way of inheritance and settlement of his damages claim does “not sustain scrutiny”. Counsel for the respondent referred to paragraph 30 of Baumann FM’s judgment (reproduced above) and argued that his Honour plainly referred to such matters.

38. It was submitted that this line of argument again concerned the weight apportioned to the various matters of fact. Counsel for the respondent argued that the 5% adjustment in favour of the husband (which amounts to $8,000) was entirely appropriate, as he was to be responsible for the “physical and emotional needs” of the child.

39. In his oral submissions, counsel for the respondent elaborated on this point and submitted that his Honour comprehended two different things by “physical needs.” It was argued that this encompassed both the likelihood that the respondent would be responsible for the physical care of the child without respite (given the estranged relationship between the child and the appellant) and that he would be responsible for any financial needs of the child, with minimal support from the appellant. Counsel submitted that the Federal Magistrate effective considered the fact that “Mr [McCrae] had had to bear…the total emotional and physical care of the child without any real contribution by the wife” for two years previously and “was likely to have to do that in the future” (T/S 26).

Conclusion

40. This is an unusual case. The only significant property acquired by the parties during the marriage is the house. As the trial Judge observed in the first instance the land and at least part of the construction costs were met by funds in the husband’s sole bank account. Subsequently, it can be seen that the parties contributed in different ways, the husband largely directly and the wife in an indirect sense as homemaker and parent. The husband was the owner builder of the house and the wife helped while she was also occupied with the child. The findings made by the learned Federal Magistrate in paragraphs 24 and 25 balanced with the wife’s contribution especially post separation were entirely open to him. This culminated in his decision that “the contribution based adjustment of 60 per cent to the husband and 40 per cent to the wife is appropriate”. In view of the evidence and the limited parts of the evidence where there was some dispute, his Honour’s finding and conclusion were certainly open to him.

41. The Federal Magistrate then considered the s.75(2) factors and undertook a balancing process allowing five per cent which as he explained amounted to only $8,000.00. In doing this he was clearly conscious of the moneys in the husband’s bank account and the liability to his brother.

42. The other part of the argument relates to an assertion that some allowance for the uncertainty of the nature of the funds remaining from the inheritance and damages should have been made. The two substantial sums coming to the husband were both post separation and received by him without contribution from the wife or indeed the husband himself. Even on the wife’s case which was that separation took place in August 1994, the inheritance was received some years  later in 2000 and the event triggering the damages award, being a motor vehicle accident, was in 2002 with the damages being received in 2006, 10 years after separation.

43. The argument of counsel on the appeal was that the monies now remaining from the inheritance and the damages should have in some way been taken into account. There are two difficulties. The first is that counsel for the wife at the hearing submitted that those monies should not be added and the second is that even though it is unclear how much each is represented in dollar terms (see Para 16b & c of judgment) there could be no difference to the ultimate result. This is not a case where even if the amount in the husband’s bank account had been added to the pool or in some other way taken into account the result would have been any different.

44. In addition the Federal Magistrate correctly accepted that the husband had expended the monies on living expenses, child support and legal expenses. The husband has not worked since the accident so that it is not possible for the existing fund to include any other sources of money.

45. The other issue raised was contribution in a more general sense. The wife had the benefit of living in the home post separation albeit with the child until February 2005. It is clear that she borrowed monies using the house as security to purchase a car, about which there was no criticism. In January 2004, $4,000.00 was borrowed to pay mortgage instalments and of that sum $1,800.00 for rates unpaid for a period of two years to the local council. Considering all these matters it could hardly be said that the decision of the trial Judge was in error.

Costs

46. Section 117(2) of the Act provides:

(2)If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.

47. The respondent asks for the costs of the unsuccessful appeal and the costs of the interlocutory proceedings.

48. The financial circumstances of the parties are revealed in the judgment of the trial Judge. The important features of each parties situation in relation to costs are:

I.That they are both unable to work;

II.The wife is dependent on a disability pension and the husband on a combination of interest from his bank deposit and the family allowance;

III.The other property held by the parties as a result of the judgment from the Federal Magistrate is hardly a significant sum although it must be seen that the husband is in a relatively significant stronger position than the wife. He does however also have the financial responsibility for the parties child;

IV.The wife is in receipt of legal aid.

(a) The costs of the appeal

49. Although it must be said that the wife’s appeal was unmeritorious, her financial circumstances are such as compared with the husband that an order for costs in the sum sought of $10,000.00 would cause her considerable hardship. There are no factors other than the lack of success of the appeal which would justify an order for costs. In all the circumstances there should be no order as to costs in relation to the appeal.

(b) The costs of the directions hearing

50. In an application filed on 12 July 2007 the respondent asked that the Notice of Appeal filed 11 April 2007 be struck out, in the alternative that further directions be made and the appellant pay the costs of that application.

51. The background to the application is the failure of the appellant to comply with orders. In a directions hearing on 9 May 2007, Warnick J made orders in relation to the filing of material. The appellant was ordered to file and serve a list of documents relevant to the appeal by 25 May 2007 and a written summary of argument and list of authorities by 11 July 2007.

52. Further it was directed that the appellant obtain and provide copies of the transcript of the hearing before Federal Magistrate Baumann by 29 June 2007. The appellant was also ordered to file a Notice of Appeal on or before 11 May 2007. The solicitors for the appellant attempted to file an amended Notice of Appeal on 17 July 2007.

53. The appellant has been self represented. A Notice of Address for Service was filed on behalf of the appellant on 23 May 2007 by Legal Aid (Qld), some two weeks after the directions hearing. The husband has had the benefit of competent solicitors and counsel.

54. At a directions hearing on 19 July 2007 further orders were made extending the time due to the failure of the appellant to comply. The costs were reserved. The hearing of the appeal was not delayed although it must be observed that the time allowed to the respondent for preparation was significantly reduced.

55. After the further directions hearing the appellant’s solicitors filed a draft index on 23 July 2007 but apparently the solicitor wished to rely on another document in its place, which was filed on 25 July 2007.

56. The respondent’s solicitor filed an affidavit on 12 July 2007 in support of the application. He explained the correspondence between himself and the solicitors for the wife and the concern they expressed in having the matter ready for hearing.

57. On 30 May 2007 a letter was sent by facsimile to the Legal Aid (Qld) office. This alerted the appellant’s solicitors to the fact that there was not compliance with the orders including that a list of documents was to be served on 25 May 2007. The solicitors said “Our client is anxious to ensure that the timetable set for the appeal is protected”. There was no response form the Legal Aid (Qld) office.

58. On 8 June 2007, noting that there had been no response, the Legal Aid (Qld) office was alerted to the fact that the appellant was two weeks late with the list of documents and urgent instructions were sought. Notice was then given that they would otherwise file an application for further directions. It was not until 12 June 2007 that a facsimile was received from the Legal Aid (Qld) office noting that a list of documents had been filed on 22 May 2007 but it may be necessary to amend them. This is the first time a copy was sent to the respondent’s solicitors, it was attached. The letter then described the position of the solicitors in relation to the transcript as follows;

We are currently awaiting copies of the tapes of the recording of the hearing before Federal Magistrate Baumann on 14 March 2007. … However, you will appreciate that our client was self-represented through much of the preparation for the hearing, and subsequent to the decision. We have had some difficulty in obtaining the documents so that we could ascertain what the evidence was before Federal Magistrate Baumann.

We have briefed Mr Page of Senior Counsel for the trial. He also anticipates that we may need to amend the Notice of Appeal. However, we are not in a position to do that until we have obtained the necessary tapes. We have requested them some time ago from the Family Court Registry. We cannot explain their delay.

We are not keen to adjourn the Appeal hearing. In view of the lack of the assistance from the Registry Manager, we will write to Justice Warnick’s associate to attempt to obtain the tapes.

59. The solicitors for the respondent wrote the next day noting the deficiencies in relation to the list of documents and importantly that:

Our client will contend that the whole transcript of the proceedings before Federal Magistrate Baumann is relevant and ought to be before the Appeal Court.

60. Nothing further was heard from the Legal Aid (Qld) office. A further letter was sent on 5 July 2007 to them by the solicitors for the respondent including as follows:

We are now very concerned by your client’s ongoing failure to file a complete list of documents upon which she intends to rely. The orders of 9 May 2007 contemplated that she ought to do that by 25 May 2007. Her continual failure to produce that list is compromising the hearing date for the appeal and will certainly have a flow on effect for the other obligations for the parties obtained in those orders.

Your client is also in breach of paragraph 4 of those orders, which impose an obligation on her to provide to the court and to our client, such parts of the transcripts as included in the finalised list of documents on or before Friday, 29 June 2007.

Paragraph 5 of the orders contemplates that your client was to file and serve written summary of argument and a list of authorities by Wednesday, 11 July 2007. It is clear that she is not going to be able to comply with that direction. Accordingly, and in terms of paragraph 8 of the orders, we hereby give you notice that we intend to make application to the court for further directions at the expiration of two (2) days from the date of this letter.

61. The solicitors for the respondent then heard nothing from the Legal Aid (Qld) office and consequently and quite properly in the circumstances filed the Application in a Case on 12 July 2007.

62. The transcript was not filed until 17 July 2007. An attempt to explain the delay is contained in the affidavit of the appellant’s solicitors sworn 24 July 2007. Ms Ammala said that the appellant did not have legal aid to obtain the whole of the transcript and that the solicitor and counsel for the appellant decided to obtain a copy of “the audio” and transcribe the hearing themselves. In doing so, it was apparently decided that only the relevant parts of the hearing would be obtained formally as a transcript.

63. To this end on 5 June 2007, the solicitor wrote to the Family Court seeking a copy of the audio tape. No response was received. On 12 June 2007 the solicitor wrote to the Associate to Justice Warnick seeking assistance and informing the respondent’s solicitor of these difficulties. On 13 June 2007 the solicitor received a letter from Justice Warnick’s associate providing some assistance. It was explained that it is not usual for the Court to provide audio tapes but that Ms Ammala could listen to the audio version of the transcript.

64. On 13 June 2007, the Registry Manager confirmed his assent for the solicitor to obtain a copy of the audio tape. It was given:

[O]n the understanding that you obtain a written transcript of the relevant parts from National Transcription Services for your appeal.

You are required to make arrangements directly with National Transcription Services and you will be responsible for all charges in obtaining the audio and the written transcript.

65. For reasons that are not immediately apparent, the solicitors undertook to transcribe the audio tape. It apparently took the typist two and a half hours to type 15 minutes of audio tape. The typist was engaged full time and required the Legal Aid (Qld) office to acquire some special equipment. The transcript was not completed until 27 June 2007. The solicitor then obtained some further instructions.

66. On 13 July 2007 as a result of discussion with counsel, it was decided that the whole of the transcript was relevant and necessary for the appeal and it was ordered. It was received on 17 July 2007. It is difficult to understand why the solicitors thought that it was necessary to transcribe the tape. It may have been a reasonable approach to listen to the tape with a view to ordering parts of it only. However, in any event the steps taken by the solicitor caused substantial delays and inconvenience to the solicitors for the respondent. The costs incurred as described in the schedule provided at the hearing include the letters to the Legal Aid (Qld) office, the attendance with the client, letters to the Family Court and engaging counsel.

67. The sum of $2,135.76 apparently reflects a costs agreement with the client but in any event seems to be entirely reasonable.

68. It was submitted by counsel for the appellant that the conduct was reasonable and that an order for costs should not be made. Counsel for the respondent emphasised that the only communication to husband’s solicitors was on 12 June 2007 whereas the solicitor’s for the husband had been continually making inquiries about the documents to be filed to which there was no real response.

69. After the letter of 12 June 2007, Ms Ammala may have been taking steps in relation to the Court and transcripts but left the solicitors for the respondent in the invidious position of not knowing whether any of the directions would be complied with so that the appeal could be heard. As they indicated, the solicitors took the proper step of filing the Application in a Case.

70. The conduct of the wife (which includes her solicitors), and despite her poor financial circumstances leads to a conclusion that an order for costs should be made and in the quantum asked.

I certify that the preceding seventy (70) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court

Associate:

Date: 24 October 2007