Medlon and Medlon (No 5)
[2015] FamCAFC 156
•13 August 2015
FAMILY COURT OF AUSTRALIA
| MEDLON & MEDLON (NO. 5) | [2015] FamCAFC 156 |
| FAMILY LAW – APPEAL – REINSTATEMENT – Where the wife seeks to reinstate her appeal deemed abandoned as a result of her failing to file a draft appeal index within the time prescribed in the Family Law Rules 2004 (Cth), r 22.13 – Where the application is opposed – Where the wife terminated her telephone link with the court resulting in her being ordered to provide written submissions in response to the submissions of the husband’s senior counsel – Where there was no adequate explanation for the failure to file the draft appeal index within time – Where the grounds of appeal lack merit and the proposed further evidence does not demonstrate appealable error – Where there are consequences for both parties if the application is granted or refused – Where the conduct of the wife does not directly bear on whether the application should succeed or not – Where the lack of merit in the appeal rendering it futile demands that the application be dismissed – Application dismissed. FAMILY LAW – APPEAL – APPLICATION IN AN APPEAL – Where the husband seeks an order that the wife’s Notice of Appeal be struck out as being incompetent – Where that application was overtaken by the deemed abandonment of the appeal and the application for reinstatement – Application dismissed. FAMILY LAW – APPEAL – ADJOURNMENT APPLICATION – COSTS – Where the husband seeks costs – Where the wife relies on her financial situation and asserts that she has no equity in any of her assets – Where the wife is employed full-time and has valuable assets – Where it cannot be said that the wife currently has no capacity to meet an order for costs – Where impecuniosity is not a bar to a costs order being made when the circumstances justify such an order – Where there are circumstances here that justify such an order being made – Where the wife’s application has been unsuccessful – Costs ordered in favour of the husband on a party/party basis. FAMILY LAW – APPEAL – REINSTATEMENT – INDEMNITY COSTS – Where the husband seeks his costs on an indemnity basis – Where there are no circumstances here that can be categorised as exceptional such that indemnity costs are called for – Application for indemnity costs dismissed – Costs ordered in favour of the husband on a party/party basis. |
| Family Law Act 1975 (Cth) – ss 79A, 94AAA, 102QB, 117(2) Batey-Elton & Elton [2009] FamCAFC 101 |
| APPLICANT: | Ms Medlon |
| RESPONDENT: | Mr Medlon |
| FILE NUMBER: | ADC | 491 | of | 2010 |
| APPEAL NUMBER: | SOA | 88 | of | 2012 |
| DATE DELIVERED: | 13 August 2015 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Strickland J |
| HEARING DATE: | 27 March 2015 |
| LOWER COURT JURISDICTION: | Federal Magistrates Court |
| LOWER COURT JUDGMENT DATE: | 30 October 2012 |
| LOWER COURT MNC: | [2012] FMCAfam 1479 |
REPRESENTATION
| THE APPLICANT: | In person by telephone link |
| COUNSEL FOR THE RESPONDENT: | Ms Nelson QC |
| SOLICITOR FOR THE RESPONDENT: | Adelaide Family Law |
Orders
The application in an appeal filed on 25 March 2013 be dismissed.
The Notice of Appeal filed on 27 November 2012 be dismissed.
The application in an appeal filed by the husband on 30 January 2013 be dismissed.
The oral application by the husband for indemnity costs be dismissed.
The wife pay the costs of the husband on a party/party basis, such costs to be as assessed in default of agreement.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Medlon & Medlon (No. 5) has been approved by the Chief Justice pursuant to
s 121(9)(g) of the Family Law Act 1975 (Cth).
| IN THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT ADELAIDE |
Appeal Number: SOA 88 of 2012
File Number: ADC 491 of 2010
| Ms Medlon |
Applicant
And
| Mr Medlon |
Respondent
REASONS FOR JUDGMENT
Introduction
Before the court is an application in an appeal filed by Ms Medlon (“the wife”) on 25 March 2013, seeking to reinstate her appeal against an order made by Federal Magistrate Kelly (as her Honour then was) on 30 October 2012, dismissing the wife’s application pursuant to s 79A of the Family Law Act 1975 (Cth) (“the Act”).
The Notice of Appeal filed by the wife on 27 November 2012 was deemed abandoned as a result of her failure to comply with the timeframe in r 22.13(2) of the Family Law Rules 2004 (Cth) (“the Rules”) for the filing of a draft appeal index, namely within 28 days after the date when the reasons for judgment of the trial judge are issued.
The reasons for the delay in hearing this application are well known, and I need not traverse them. I observe though that the causes of the delay can be laid entirely at the feet of the wife.
The application for reinstatement is opposed by Mr Medlon (“the husband”).
Relevant legislation and rules of court
Rule 22.13 of the Rules provides:
…
22.13(2)The appellant must file a draft index to the appeal book within:
(a) 28 days after:
…
(ii)the date when the reasons for judgment that relate to the order the subject of the appeal are issued (being the date of the certificate of the Associate to the Judicial Officer that appears on the published reasons for judgment); or
…
22.13(3)If the appellant fails to comply with subrule (2), the appeal is taken to be abandoned.
Rule 22.44 of the Rules provides:
A party may apply to have an appeal taken to be abandoned under this Chapter reinstated.
Section 94AAA of the Act provides:
94AAA(10) Applications of a procedural nature, including applications:
…
(c)to reinstate an appeal under subsection (1) or (1A) that, because of the standard Rules of Court, was taken to have been abandoned; or
…
may be heard and determined by a single Judge or by a Full Court.
…
94AAA(12)An appeal does not lie to a Full Court from a decision of a single Judge exercising jurisdiction under this section.
Applicable principles
In the case of Bemert & Swallow (2010) FLC 93-441, the Full Court considered in some detail the relevant principles to be applied where there is an application to reinstate an appeal. Significantly, the Full Court concluded at [154]:
…[I]n our view, the discretion to reinstate an abandoned appeal is at large and no attempt should be made to limit the exercise of the discretion nor identify in any prescribed way the matters that should be taken into account.
Despite this, it was still accepted by the Full Court that the principles applicable to the determination of an application for an extension of time, as set out for example in the oft-quoted extract from the judgment of McHugh J in Gallo v Dawson (1990) 93 ALR 479, apply equally to an application to reinstate an appeal. In Gallo v Dawson, McHugh J said at 480 – 481:
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: see Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1978] VR 257 at 262. 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: see Avery v No 2 Public Service Appeal Board [1973] 2 NZLR 86 at 92; Jess v Scott (1986) 12 FCR 187 at 194-5; 70 ALR 185. 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: see Burns v Grigg [1967] VR 871 at 872; Hughes, at 263-4; Mitchelson v Mitchelson (1979) 24 ALR 522 at 524. 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: Vilenius v Heinegar (1962) 36 ALJR 200 at 201. 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.
See also Rand & Rand [2009] FamCAFC 88 and Batey-Elton & Elton [2009] FamCAFC 101.
Thus, the fundamental issue is whether reinstatement of the appeal is necessary to enable the court to do justice between the parties, and in looking at where the justice of the case lies, there are a number of factors that may be relevant to take into account. For example, whether there are adequate reasons which explain the failure to comply with the relevant timeframe, whether the appeal has merit, if there is any hardship or injustice to the respondent that cannot be compensated by orders for costs or otherwise, the history of the proceedings, the conduct of the parties in the proceedings, the nature of the litigation, and the consequences for the parties of a grant or a refusal of the application.
Discussion
Not all of the factors identified above are relevant here, and indeed, not all of them formed the basis of submissions by the wife or by senior counsel for the husband.
I need to explain at this point though what occurred at the hearing before this court on 27 March 2015.
The wife appeared without legal representation and she attended by telephone link. Initially the wife sought an adjournment, but that was refused (see Medlon & Medlon (No. 4) [2015] FamCAFC 70).
The hearing proceeded, but partway through the same the wife abruptly and deliberately hung up the telephone and she then would not allow the court to reconnect with her; the calls simply went to message bank.
This occurred at the point where I was attempting to explain to the wife what she needed to demonstrate to succeed in her application. In any event, given that this was a deliberate action by the wife, that I had earlier refused her application to adjourn the hearing, that the wife had effectively completed her oral submissions, and that this was the second occasion that the wife had abruptly hung up the telephone in an attempt to bring the hearing to a close, I continued with the hearing and received the oral submissions of the husband’s senior counsel.
However, at the conclusion of the hearing I made orders that the court provide the wife with a full transcript of the hearing, that the wife file and serve written submissions, both in response to the submissions of the husband’s senior counsel and generally in relation to the application, and that the husband have leave to file any written submissions in reply.
The transcript was duly forwarded to the wife, and she filed written submissions on 23 April 2015.
The first thing to note is that nowhere in those submissions was there any reason given by the wife for her actions in hanging up the telephone, or any recognition by her of the subsequent indulgence afforded to her by this court. The second thing to note is that those submissions did not provide any better assistance to the court in determining her application for reinstatement than her previous written and oral submissions or her affidavit material. She continued to be under the same misconception as before in relation to the issues involved, and I will say more about that later in these reasons. She did attempt to rewrite, or reframe the grounds of appeal, by including an expansive narrative detailing the complaints that she has with the decision of the Federal Magistrate, but as I will also explore later in these reasons, still not so that any appealable error by the Federal Magistrate was demonstrated.
Astoundingly the wife, and bearing in mind that she is a legal practitioner, even included in her written submissions further submissions in relation to the issues that had been finally determined on 12 February 2015, namely her application to restrain the husband’s senior counsel and his solicitor from continuing to act for him.
In many respects her submissions were nonsensical and demonstrated her lack of understanding of the issues to be determined by this court, and the appeal process itself. It is again of significant concern that a legal practitioner simply does not appreciate what is required in making an application pursuant to s 79A of the Act, what is required to achieve reinstatement of an appeal deemed abandoned, what an appeal against orders of a trial judge entails, and that applications, once determined, cannot be re-agitated.
Following the filing by the wife of her submissions, the husband took up the opportunity to file written submissions in reply, and those submissions were filed on 5 May 2015.
In terms then of the documents that are before this court for the purposes of this application, there is the wife’s affidavit filed on 25 March 2013 in support of her application in an appeal, written submissions forwarded to the court on or about the same day of the hearing, namely 27 March 2015, and to which were attached expansive details of the relatively recent financial circumstances of the husband including numerous documents, the wife’s written submissions filed on 23 April 2015 and referred to above, written submissions of the husband filed on 16 March 2015, a chronology filed on behalf of the husband on 23 March 2015, an affidavit of the husband filed on 25 March 2015, and the husband’s written submissions in reply filed on 5 May 2015.
Given the passage of time since the application in an appeal had been filed by the wife, on 12 February 2015 when I listed the application for hearing, I ordered that the wife file and serve any further affidavits on which she intended to rely by the close of business on 13 March 2015, and the husband file and serve any responding affidavit by the close of business on 25 March 2015.
Consistent with the wife’s cavalier attitude to orders of this court, and in particular in relation to orders for the filing of documents, without explanation the wife forwarded an affidavit to the court on 24 March 2015 expecting it to be filed. Not surprisingly it was not accepted for filing, and it was left for the wife to seek to tender the affidavit at the hearing.
In the meantime, the husband filed an affidavit on 25 March 2015 (i.e., within time). Then, on 26 March 2015 the wife sent to the court an affidavit said to be in response to the husband’s affidavit. However, she was not able to do that given the orders that had been made, and it was not accepted for filing.
Although the husband understandably objected to the court receiving the wife’s affidavit sought to be filed on 24 March 2015, I indicated during the hearing that I would receive it as well as the wife’s written submissions forwarded to the court on or about 27 March 2015. I have also determined to receive the responding affidavit of the wife forwarded to the court on 26 March 2015. I can say though, that with both of those affidavits they comprised more of the same. In other words, they traversed again the complaints that the wife has with the decision of the Federal Magistrate, but without any appreciation of the need to demonstrate appealable errors, and for those errors to be encapsulated in competent grounds of appeal.
Finally, I observe that in the written submissions forwarded on or about 27 March 2015, as with her subsequent written submissions filed on 23 April 2015, the wife again attempted to re-agitate the issues of restraining the husband’s senior counsel and his solicitor from continuing to act for the husband, despite those matters having been finally determined.
That said, the relevant factors identified by the husband’s senior counsel, and by the wife, for consideration by this court in determining the wife’s application for reinstatement are the reasons for the failure to file the draft appeal index in time, the merits of the appeal, the prejudice to each of the parties of either the grant or refusal of the application, and the conduct of the wife.
I now turn to those factors.
The failure to file a draft appeal index in time
On 30 October 2012 the Federal Magistrate delivered her reasons for judgment orally and made orders, inter alia, dismissing the wife’s application filed on 24 August 2012 seeking to vary or set aside, pursuant to s 79A of the Act, consent orders for property settlement made on 30 November 2011.
On 27 November 2012 the wife filed a Notice of Appeal against that order.
On 21 December 2012 the wife sent to the Southern Appeal Registry a draft appeal index purportedly in compliance with the Rules. However, that index was not accepted for filing because it did not list the documents asserted to be in evidence before the Federal Magistrate and did not identify those documents by title, date of filing, or the party on whose behalf each document was filed. The Appeal Registrar advised the wife (and the husband) of this by letter dated 24 December 2012. In that same letter the wife was advised that the time for filing a draft appeal index was extended to 14 January 2013, or 28 days after the judgment was published (whichever is the later), given that the Federal Magistrate still had to settle and publish her reasons for judgment.
On 30 January 2013 her Honour published her reasons for judgment, and thus, the draft appeal index was required to be filed on or before 28 February 2013. Indeed, by letter dated 31 January 2013 the Appeal Registrar informed the wife of this.
On 28 February 2013 the wife forwarded her draft appeal index to the Southern Appeal Registry by facsimile. However, it was sent at 5:40pm Western Australian time, namely 8:40pm Eastern Daylight Time (EDT), and received by the Registry at 8:43pm EDT.
Rule 24.05(2) of the Rules provides that a document sent electronically after 4:30pm ACT time (namely EDT) is taken to be received by the filing Registry on the next day when the Registry is open for filing. Thus, the draft appeal index is to be treated as having been received for filing on 1 March 2013, namely after the expiry of the last day on which it could be filed.
On 5 March 2013 the Appeal Registrar advised the wife by letter that as the draft appeal index had not been filed in time, the appeal was taken to be abandoned pursuant to r 22.13(3) of the Rules.
It is difficult to discern from the documents relied on by the wife what reason or reasons she proffers for her failure to file the draft appeal index within time, but doing the best I can, it seems that she suggests that it was because of the time difference between Victoria and Western Australia, to which State she had then “recently” moved, and her allegedly suffering stress, anxiety, depression and memory loss. Frankly, I fail to see how the latter can be a legitimate reason for missing the deadline, and in any event no medical evidence to support these claims has been presented. Further, it is not correct that she had only “recently” moved to Western Australia; indeed she had moved there 12 months before. Thus, I am not satisfied that there is an adequate reason for the wife’s failure to comply with the timeframe for the filing of the draft appeal index. However, the fact of the matter is that the wife was only a few hours late in faxing the draft appeal index to the Southern Appeal Registry, and it would be unjust if she was not able to pursue the appeal for that reason alone.
The merits of the appeal
The grounds of appeal set out in the Notice of Appeal are as follows:
The Honourable Federal Magistrate(s) erred in that she:
(a)Failed to order continuing full and frank disclosure by the husband both in earlier proceedings of 2011 and in the latest proceedings of 2012.
(b)Failed to order for the protection and maintenance of income, loans and assets by the husband having control of the family business and its income denying the wife the same opportunity thereby causing prejudice to the wife both during the earlier proceedings and later after the Order of November 2011.
(c)Failed to recognise and consider the health issues, child issues, family violence issues, income and business issues, asset valuation and appraisal discrepancies, business valuation discrepancy in terms of maintainable income, non-disclosure by the husband of assets and financial resources both throughout, during negotiations and after during the application for a section 79A adjustment of assets.
(d)Failed to order for the wife’s inspection of documents during the proceedings in 2012.
(e)Failed to consider the wife’s exposure of family violence by the husband over a lengthy period including that upon separation which caused the wife negative health issues of an ongoing nature.
(f)Failed to consider the profit sharing, any occupation fees of the business premises, proper and adequate spousal maintenance, added child expenses, long service leave, compulsory superannuation payments, taxable benefits at retirement for the husband and not the wife.
(g)Failed to consider adequate compensation for the wife for foregoing her interest in the profitable business which was valued at $70,000 and yet maintains sufficient income to repay approximately $900,000 in loans plus interest, still achieves a profit annually, permits extensive personal expenses plus a wage, and has allowed the husband to repay an overdraft of $250,000 and legal fees of approximately $220,000 without further loan and yet allegedly only on an income of a gross $39,000 before tax which also permits overseas travel and rental payments, yet clearly there are obvious discrepancies, and these repayments occurred immediately after the Orders in November 2011.
(h)Failed to consider the evidence that the husband did not disclosure [sic] financial resources at the time of the Orders of November 2011 and nor since in 2012 during the application for a section 79A adjustment.
(i)Failed to consider or order disclosure pertaining to that the husband had purchased a collectable motor vehicle from a child of the marriage in 2010 and then purposely hid the motor vehicle from any disclosure and from the itemised valuation conducted by a joint valuer prior to the Orders of 2011.
(j)Failed to consider or order disclosure pertaining to that the husband had purposely hid [sic] a motor vehicle from any disclosure and from the itemised valuation conducted by a joint valuer prior to the Orders of 2011.
(k)Failed to consider or order disclosure pertaining to that the husband had built a hugely expensive race engine during 2010 and hid its existence to the joint valuer for valuing prior to the Orders of 2011.
(l)Failed to consider during the proceedings the evidence that the husband had sold a collectable motor vehicle belonging to and gifted to the wife during the marriage, and thereby a fraudulent transfer and sale of the vehicle to a third party.
(m)Failed to add-back various expenses for the business valuation despite numerous assertions and concerns by the wife and her counsel as to that valuation.
(n)Failed to add-back the non-disclosed items hidden by the husband subject to an order for full and frank disclosure by him and for other documents to be produced pertaining to same.
(o)Failed to add-back the payment of the legal fees which amounted to an excessive and approximate $220,000 paid by the husband without the assistance of any loan.
(p)Failed to take into account the wife’s ongoing child support and adult support to the younger child of the marriage, which continues extensively and weekly to date.
(q)Failed to take into account the wife’s added expenses of the child such as orthodontist, medical, dental, school fees, driving lessons, pet dog vet bills, motor vehicle repairs, and failed to consider that the husband was even in child support arrears from two years earlier, such attitude being again obstructive, hindering and delaying in his behaviour.
(r)Failed to take into account in the S79A application the rent the husband or the former family business received from the second commercial business premises from the time of the Orders in 2011 being a financial resource not disclosed or considered in 2011.
(s)Failed to consider the wife’s difficulties in refinancing of the former matrimonial home into her name pursuant to the Orders of 2011 due to past loan arrears caused by the husband in mid 2010 onwards, and failed to consider the fact that the husband was still joint owner of the former matrimonial home almost one year afterwards, and also joint owner of the superannuation fund property, both as joint owners on the titles, and this inequitable, unjust, unfair and discriminating causing prejudice and hardship to the wife.
(t)Failed to order a proper secondary valuation of the business given that the husband had previously interacted with the valuer without the presence of the wife, and the valuation is significantly below that given to the bank previously, and based on its earnings to any accountant skilled in such valuations.
(u)Failed to allow sufficient time for the wife to inspect and obtain documents bearing in mind that the wife had relocated to regional south west Western Australia in February 2012.
(v)Failed to take into account that the husband had not maintained the business, its income, the loans and assets of the parties, and that he had dissipated and wasted assets of the marriage and increased borrowings as secured by the former matrimonial home.
(w)Failed in every manner to consider that the husband had not given full and frank disclosure throughout every proceeding despite his legal obligation to do so.
(x)Her Honour drew a conclusion despite there being non-disclosure by the husband voluntarily as required and failed to order for disclosure by the husband in which to assist in drawing a fair and just conclusion based on proper evidence and not one prejudicial to the wife who was restricted from accessing the evidentiary support for her application, was prevented from adding ongoing issues coming to light almost weekly, and which in all the circumstances created a miscarriage of justice to the wife.
In considering these grounds of appeal in the context of the reasons for judgment of the Federal Magistrate, I cannot say that any of them have any chance of success. They variously comprise narrative, mere assertions, combinations of assertions and evidence, nonsensical claims, and complaints that do not disclose any appealable error by the Federal Magistrate, particularly when bearing in mind that the application before her Honour was a s 79A application and not a property settlement application. I emphasise that because, plainly, the wife has misconceived the nature of a s 79A application, in framing some of the grounds of appeal as being alleged errors by the Federal Magistrate in addressing “an application for a s 79A adjustment” (e.g., Grounds (c) and (h)).
Further, and in a similar vein, the wife has incorrectly asserted in many of the grounds of appeal that the Federal Magistrate failed to consider issues and failed to make orders, which would only be the case if there was a property settlement application before her Honour and not a s 79A application (e.g., Grounds (f), (m), (o), (p), (q), (t) and (v)).
It is apparent from the grounds of appeal that a principal complaint of the wife is that of non-disclosure by the husband, and the alleged failure by her Honour to order disclosure. However, the examples that the wife gives of non-disclosure overlook the fact that there needed to be evidence before her Honour as to the same, and it is plain that there was no such evidence. Thus, there can be no error by her Honour here.
If the appeal is reinstated, the wife proposes to seek leave to adduce further evidence which she says demonstrates that the order under appeal is erroneous. That further evidence, it is said, confirms the non-disclosure by the husband of relevant financial information. The wife did not raise it herself, but during the hearing I referred to the circumstance that, even where there appears to be no merit in the grounds of appeal, if there is further evidence that, if accepted, would demonstrate appealable error, then the appeal can still be successful.
In CDJ v VAJ (1998) 197 CLR 172, McHugh, Gummow and Callinan JJ said this:
109.One consideration in construing s 93A(2) is its remedial nature. Its principal purpose is to give to the Full Court a discretionary power to admit further evidence where that evidence, if accepted, would demonstrate that the order under appeal is erroneous. The power exists to facilitate the avoidance of errors which cannot be otherwise remedied by the application of the conventional appellate procedures. …
…
(See also Samson & Samson [2015] FamCAFC 28)
However, as submitted by the husband’s senior counsel, the proposed further evidence does not demonstrate error by the Federal Magistrate. Indeed the alleged non-disclosures by the husband were articulated before her Honour, and her Honour said this at [51]:
The wife argues that her claims of fraud and inadequate disclosure are further supported by the fact that since the trial the husband has managed to pay down various debts, discharge his legal fees and so on. She considers this is proof that he has either withheld assets or deliberately misrepresented his business and business income during the proceedings. Once again, the difficulty for the wife is that this is simply her assertion. She has not placed any evidence before the Court to justify these allegations.
The husband’s senior counsel correctly submitted that “[t]he husband filed extensive material before [her Honour] where he explained that he restructured his finances, that he sold property, that he remarried and his current wife lent a great deal of the money that went towards his legal fees” (transcript 27.3.15, page 26, lines 33-35). Further, this was all taken into account by her Honour and at [52] she said this:
While the husband has discharged some liabilities, he is still carrying a considerable debt load. A party’s capacity to pay legal fees and to restructure their finances is not proof of fraud or deception. It may reflect that the husband is now able to seek financial assistance from elsewhere. It may be that it reflects some careful financial management by Mr [Medlon]. It may be that his financial relationship with his bank is more flexible than the wife has experienced, as he is an ongoing client. It could be a combination of all or any of the above. But it is not proof of fraud or deception.
Indeed, it is instructive to set out in full that part of her Honour’s reasons where her Honour addressed these complaints by the wife (including the paragraphs quoted above), as follows:
49.Clearly, where one party enters into consent orders on the basis of inadequate information, whether that comes about because of the deliberate actions of the other party or not, it may place that party at such a disadvantage as to vitiate their consent, but that is not the situation here in my view.
50.The wife was concerned that the husband was withholding relevant information. Nonetheless she was able, with the assistance of Counsel, to reach a negotiated settlement. I do not see any basis to find that the wife’s consent in November 2011 was based on misleading or inadequate information in the sense discussed by the Full Court in a recent decision of Jeeves & Jeeves. The extent of disclosure, the extent of subpoena issued and indeed as previously mentioned, the fact the wife’s consent was given at trial with the advice of very experienced Senior Counsel, all suggest otherwise.
51.The wife argues that her claims of fraud and inadequate disclosure are further supported by the fact that since the trial the husband has managed to pay down various debts, discharge his legal fees and so on. She considers this is proof that he has either withheld assets or deliberately misrepresented his business and business income during the proceedings. Once again, the difficulty for the wife is that this is simply her assertion. She has not placed any evidence before the Court to justify these allegations.
52.While the husband has discharged some liabilities, he is still carrying a considerable debt load. A party’s capacity to pay legal fees and to restructure their finances is not proof of fraud or deception. It may reflect that the husband is now able to seek financial assistance from elsewhere. It may be that it reflects some careful financial management by Mr [Medlon]. It may be that his financial relationship with his bank is more flexible than the wife has experienced, as he is an ongoing client. It could be a combination of all or any of the above. But it is not proof of fraud or deception.
53.Taking into account all of the evidence and the submissions put to me it is difficult for the Court not to conclude that the wife, having entered into a negotiated settlement, now feels dissatisfied with that outcome and is looking for a basis to set it aside.
Another substantial part of the wife’s case, also related to the allegations of non-disclosure, appears to be that there were subpoenas that were issued prior to the hearing before her Honour, but no orders were made for inspection of the documents produced, and it was only after the hearing that that took place, and these documents comprise the further evidence the wife wants to rely on. However, that is clearly not correct, and her Honour addressed this issue in her reasons for judgment. There was one subpoena to Bank SA, and one to the W business, and her Honour said this in her reasons for judgment:
43.I should comment at this point that the wife has issued a subpoena to the [W business]. Neither party had filed a relevant notice seeking to inspect the records and it is fair to say that that issue was overlooked by all parties, and by the Court, over the last three months.
44.The wife reminded the Court of this subpoena at the directions hearing on 5 October 2012 and I indicated on that occasion that I would grant leave to inspect those records if I concluded that the wife had demonstrated a prima facie case pursuant to s.79A.
45.It may be that the [W business] records will show the husband was in negotiations with the [business] prior to trial. I do not disregard that possibility. But I repeat, it seems to me that the wife has not come close to establishing that this alleged failure to disclose relevant information, even if it had occurred, would amount to a miscarriage of justice. Accordingly I do not consider that either party has been disadvantaged by not being able to inspect the material presented under subpoena to the [W business].
46.I should also comment at this point, simply so I do not overlook it in the whole process, that the wife had also issued a subpoena to Bank SA which was similarly overlooked until early October 2012. I note that there had been a subpoena issued to Bank SA prior to the trial and much of the material presented under the current subpoena would therefore have been available to the parties prior to trial.
47.Again, I repeat my earlier view, that the time for the wife to challenge the husband about any alleged fraudulent or deceptive behaviour she believed had occurred was at trial and not subsequently. Insofar as the recent subpoena also relates to records postdating the date of the consent orders, those records cannot relate to information or circumstances that existed at the time the orders were made and are therefore of little assistance to a s.79A application.
48.In fact, it may be that the wife issued the subpoena in relation to her general dealings with BankSA and her complaint that the husband was influencing the bank in relation to their unwillingness to provide re-financing to her. I note the wife had previously filed an application seeking the Court make orders directed to BankSA itself, an application which the Court had already dismissed.
Thus, not only do the grounds of appeal lack any merit, but the proposed further evidence does not demonstrate appealable error by the Federal Magistrate.
The consequences of the granting or refusal of the application
If the application is refused, the wife will not be able to pursue the appeal, and significantly, there is no appeal from a refusal to grant an application such as this. There is, of course, the ability to apply for special leave to appeal to the High Court of Australia; however, that is an uncertain exercise. In any event though, this is a serious consequence for the wife if her application is refused.
If the application is granted, the appeal will be reinstated and the husband will need to deal with it. He will need to spend time and presumably money in responding to the appeal. Thus, there is an obvious prejudice to the husband, given that currently the appeal is deemed abandoned and the husband is therefore able to ignore the same.
The conduct of the wife
The husband’s senior counsel submits that, given how the proceedings in this court have progressed, and in particular in light of the wife’s conduct in bringing and pursuing fruitless applications and an unsuccessful appeal, and in light of her conduct in the running of those matters, it would not be in the interests of justice to allow the appeal to be reinstated. It is said that the husband has been obliged to respond to the applications made by the wife (including an appeal), and more specifically to her invariably prolix affidavits, and that has required an ultimately unnecessary investment of his time, money and resources.
There can be no denying that the wife’s conduct as described can and should be severely criticised, and that the concerns that I have expressed over time about that conduct are magnified greatly by the fact that the wife is a legal practitioner. However, each application made by the wife, and the appeal to the Full Court, has been dealt with by this court, and orders for costs have been made in the husband’s favour when required.
In the end result, the effect of the wife’s conduct has been to delay, for a significant period of time, the determination of the reinstatement application, but in my view it does not directly bear upon whether that application should succeed or not.
Conclusion
As the authorities recognise, the court’s consideration of the relevant factors in this case informs the court in determining the fundamental issue, namely whether the interests of justice require that the appeal should be reinstated.
I have found that there is no adequate explanation for the failure to comply with the timeframe for the filing of a draft appeal index, although that must be viewed in the context of the wife only being a few hours late. I have also found that there is no merit in the grounds of appeal, and that each party will be prejudiced in different ways depending on the result of the application.
Importantly, where an appeal has been filed in time, as is the case here, the fact that the appellant has failed to take an interlocutory step within the time permitted is usually insufficient to alone prevent the pursuit of the appeal (Jackamarra v Krakouer (1998) 195 CLR 516). Further, the High Court has said in Jackamarra v Krakouer at [7], that the merits of an appeal is not usually a relevant consideration where the application before the court is an extension of time to take a step in prosecuting the appeal. However, in that case the High Court recognised that it would be otherwise if “the court can be satisfied that the appeal is so devoid of merit that it would be futile to extend time.” Of course, that applies equally to a reinstatement application as to an application to extend time, and in this instance I have found that that is the case.
One obvious reason for the caution expressed in cases such as Jackamarra v Krakouer is that the full range of materials relevant to the hearing of an appeal is usually not before the court at the time the reinstatement application is being considered. However, in my view it was not necessary to have that full range of materials in this case in order to form the view that I have. In the material filed by both parties the complaints that the wife has about the decision of the Federal Magistrate have been both promoted and then responded to in exquisite detail, and that has enabled this court when considering the grounds of appeal in the context of her Honour’s reasons for judgment to find that “the appeal is so devoid of merit that it would be futile to (reinstate it)”.
As Gummow and Hayne JJ said in Jackamarra v Krakouer at [35]:
… if it is clear that [the] argument will fail, the appeal should not proceed. To permit it to proceed is to subject the respondent to the many costs of litigation needlessly and is to occupy the courts when they could be occupied more productively.
(See also Lindon v Commonwealth of Australia (No. 2) (1996) 136 ALR 251 per Kirby J at 256)
That is plainly the case here.
Thus, despite the shortness of time by which the wife missed the deadline to file her draft appeal index, and despite the obvious prejudice to her in not granting the application, the lack of merit in the appeal, rendering it futile, demands that the application be dismissed, and that is what I propose to do. For the avoidance of doubt, I will also formally dismiss the appeal.
On a final note, I observe that before the appeal had been deemed abandoned, on 30 January 2013 the husband filed an application in an appeal seeking, inter alia, an order that the Notice of Appeal be struck out as being incompetent. That application was of course overtaken by the deemed abandonment of the appeal and the application to reinstate it, but during the hearing the husband’s senior counsel flagged that, in the event that the appeal was reinstated, then that application would need to be heard.
Clearly, given my finding as to the lack of merit in the appeal, that application would have succeeded, and frankly it was open to this court to reinstate the appeal but then dismiss it for lack of merit rather than dismiss the application for reinstatement. I have chosen the latter course because, although the result is the same, it obviates a further hearing. In any event, the application of 30 January 2013 is now otiose and I will dismiss it.
For completeness, and before I address the question of costs, it is necessary for me to deal with one further matter.
In his written submissions filed on 16 March 2015, prior to the hearing, the husband suggests that this court should “exercise its power pursuant to s 102QB of the Act” and “make a vexatious proceedings order”. In the alternative, he asks this court to “stay any application to reinstate an abandoned appeal until such time as all costs orders are satisfied, and further, that the court make an order that the applicant give security for costs in relation to any proposed appeal.”
As to the issue of s 102QB, I do not propose to make any order. The application before the court was specifically the application filed by the wife to reinstate the appeal that was deemed abandoned, and the husband could not expect that s 102QB would be invoked without, at the very least, giving the wife the opportunity to respond appropriately. In any event, on the evidence before the court, this court could not be satisfied that the wife “has frequently instituted or conducted vexatious proceedings in Australian Courts or Tribunals” (s 102QB(1)).
The application for reinstatement could not be termed “vexatious” and although that application had been put on hold while other applications filed by the wife were dealt with, and those applications (including an appeal in relation to one of those applications) were unsuccessful, that does not necessarily render them vexatious. It is of course arguable that the way that the wife conducted those proceedings was vexatious, but that is not something that should be decided on the run given the way the issue was raised by the husband, namely in written submissions and without he himself making any formal application in that regard.
I also note that in an attempt to bring the proceedings instituted by the wife within s 102QB, in the chronology filed on 23 March 2015 on behalf of the husband, there is detailed reference to proceedings involving the wife in courts other than the Federal Magistrates Court (as it then was), and this court, and that is elaborated on in the written submissions filed on 16 March 2015 on behalf of the husband, as well as in the husband’s senior counsel’s oral submissions on 27 March 2015. However, no evidence was placed before this court as to those proceedings, and it is impossible for this court to be satisfied on the basis of a chronology and submissions that those proceedings were “vexatious”, and further, where the wife has not had the opportunity to respond.
As to the alternative request to stay the reinstatement application until all costs orders made against the wife are satisfied, for similar reasons I am not prepared to accede to that request. Again, there is no formal application with appropriate supporting affidavit material on which this court could act, and the wife has likewise not had the opportunity to respond.
As to the request for an order for security for costs in relation to the appeal if it was reinstated, there was even less before this court on which this court could address such a request. Apart from the fact that there is no formal application, there is no supporting affidavit material telling this court, for example, what the anticipated costs of the husband might be, and nor was there a detailed submission presented on behalf of the husband in support of this request.
I also note, that at the conclusion of the written submissions of the husband filed on 16 March 2015 an “order” was sought “staying or dismissing all of the proceedings in the Family Court already instituted by the applicant”. That order would seem to be an order sought as a consequence of the application of s 102QB, and thus, on the basis that this court will not be applying that section, this court will not be making such an order.
Costs
On behalf of the husband, his senior counsel made an application for costs of and incidental to the application for reinstatement with such costs being calculated on an indemnity basis. There was also an application by the husband seeking the costs of the unsuccessful adjournment application made on 27 March 2015, and which was the subject of the judgment referred to in paragraph 13 above.
In her written submissions filed on 23 April 2015 the wife responded specifically to the first application, but only to oppose it and say that she has “no equity remaining”. I proceed though on the basis that she opposes both applications.
Addressing the application to adjourn first, there are clearly circumstances here that justify an order that the husband have his costs (s 117(2) of the Act), namely the fact that the wife’s application was unsuccessful, and that, in the absence of the necessary evidence, it was always bound to fail. It also unnecessarily took up a substantial part of the time set aside to hear the wife’s application to reinstate her Notice of Appeal.
As I have indicated, I proceed on the basis that the wife opposes this application, and consistent with the basis of her opposition to the application for costs in relation to her application for reinstatement, I propose to also proceed on the basis that that opposition is based on the financial circumstances of the parties, but particularly on her parlous financial situation. For example, in paragraph 16 of her affidavit sworn on 26 March 2015, and which affidavit I have now received, the wife deposes that she has “no equity” in any of her assets, she has incurred “overall over $200,000 in legal costs”, and they “still keep mounting up”. She also said that her income was “utilised for the paying of loans, credit cards or outstanding bills.”
That is the extent of the “evidence” before this court in these proceedings as to the wife’s financial circumstances, except to record that she is employed full-time as a legal practitioner.
There is no evidence before the court in these proceedings as to the husband’s current financial circumstances, save and except that, in his affidavit filed on 25 March 2015, he deposed to accruing over $300,000 in legal fees since the consent orders were made on 30 November 2011, and that the wife has had “numerous costs orders made against her, both in South Australia and Western Australia”, none of which have been paid.
Fortuitously, at the same time as I will be delivering this judgment, I will be delivering judgment in relation to the application for costs made on behalf of the husband on 12 February 2015, following the dismissal of the wife’s applications to restrain the husband’s senior counsel and his solicitor from continuing to act for him. As is recorded in that judgment, at the hearing the wife provided the court with details of her then financial circumstances. It is appropriate if I refer to those same details in the context of the costs applications that are now before the court.
The wife informed the court on 12 February 2015 that her income was about $3,200 gross per fortnight, and she received rent from one of her two properties of $600 per fortnight. Apparently, net of tax, her total income is about $2,900 per fortnight, and she has personal living expenses of over $3,000 per fortnight.
The two properties owned by the wife were valued at $635,000 in total, and she had $300 in the bank. In addition, she had a motor vehicle and furniture valued at approximately $30,000.
As far as liabilities are concerned, the wife had two mortgages and two loans totalling $640,000, a credit card liability of $5,000, and outstanding legal fees of $94,000.
I am still not able to say what the husband’s financial position is, but the concentration here is obviously on the wife’s position in any event.
Now, still addressing the costs of the application to adjourn, although the wife’s expenses currently exceed her income, and her liabilities exceed her assets, given that she is currently working full-time and has valuable assets, it cannot be maintained that she has no capacity to meet an order for costs. However, even if I accept that the wife currently has no capacity to meet an order for costs, there is clear authority that impecuniosity is not a bar to a costs order being made where there are circumstances which otherwise justify an order being made (see D & D (Costs) (No. 2) (2010) FLC 93-435), and that is the case here.
Section 117(2A) of the Act does not provide that any one of the factors set out therein takes priority over any of the others; it is a matter of what weight is attached to those factors that is relevant. Here, lack of success clearly outweighs any other factor, including the financial circumstances of the wife. It is the wife who has brought the application and which has led the husband to incur significant legal expenses in responding. The wife has been wholly unsuccessful, and of course it was her default in the first place in failing to comply with the timeframe for the filing of a draft appeal index which has necessitated the application for reinstatement, and the need for the husband to respond thereto.
Thus, I will make an order that the wife pay the costs of the husband of and incidental to the wife’s application to adjourn the hearing. It is unclear whether the husband seeks indemnity costs in relation to that application, but regardless, I am not satisfied that there are the required exceptional circumstances for the costs to be assessed on that basis. Thus, the costs of that adjournment application will be calculated on the usual party/party basis.
Turning to the application for indemnity costs in relation to the reinstatement application, as always, the first question is whether there should be an order for costs at all. The primary position under s 117 of the Act is that each party is to bear their own costs, but a costs order can be made where there are circumstances that justify it, and in determining that, regard has to be had to the factors set out in s 117(2A) of the Act.
Again, with this application there is no doubt that there are circumstances that justify an order for costs; the wife’s application is to be dismissed, and thus, she has been wholly unsuccessful (s117(2A)(e)). However, as identified above, I do need to take into account the financial circumstances of the parties, particularly those of the wife, and her submission that she has no capacity to meet an order for costs. Nevertheless, as with the application for costs in relation to the unsuccessful adjournment application, and for the same reasons there expressed, the wife’s financial circumstances do not persuade this court that the discretion to make an order for costs against the wife should not be exercised.
The next question is whether the costs awarded against the wife should be calculated on a party/party basis or on an indemnity basis.
As I did in my reasons for judgment delivered on 9 September 2013 in relation to a previous application for costs in these proceedings (Medlon & Medlon (No. 4) [2013] FamCAFC 137), and in the reasons for judgment also delivered today (Medlon & Medlon) (No. 6) FamCAFC), it is useful to record what the Full Court said in D & D (Costs) (No. 2) about this topic:
26.In Limousin & Limousin (Costs) [2007] 38 FamLR 478, the Court reviewed the authorities in relation to indemnity costs. Reference was there made to the judgment of the Full Court in Kohan and Kohan (1993) FLC 92-340. It was recorded at 79,614 (citations omitted) in which it was said that:
The intent of s 117(1) and 117(2) is that in this jurisdiction costs should not follow the event as a matter of course. However, where the justice of the matter so requires, the court may make such order as the court considers just. As we have pointed out, the court may depart from the scale of costs prescribed under the rules. However, the purpose of fixing a scale of costs must be understood to signify that they contain the normal rates of charges. By O 38 r 2, the provisions of O 38 apply to costs ordered to be paid or taxed, and costs payable or to be taxed between solicitor and client. O 38 r 7 makes provision for the allowance of additional amounts for complexity, difficulty or novelty and special skill, knowledge or responsibility. Consequently, the Court should not depart lightly from the ordinary rules relating to costs between party and party and the circumstances justifying the departure should be of an exceptional kind. See Degmam v Wright (No 2) [1983] 2 NSWLR 354]; Wentworth v Rogers (No 5) (1986) 6 NSWLR 534; Hobartville Stud v Union Insurance Co (1991) 25 NSWLR 358 at 368–70.
Indemnity costs orders are still an exception in this and other jurisdictions.
27.The Court in Limousin (supra) also referred to the judgment of Shephard J in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 upon which learned Counsel for the Wife relies in support of the present application. Shephard J said in Colgate-Palmolive (supra) (at 256):
“2.The ordinary rule is that, where the court orders the costs of one party to litigation to be paid by another party, the order is for payment of those costs on the party and party basis …
3.This has been the settled practice for centuries in England. It is a practice which is entrenched in Australia. Either legislation (perhaps in the form of an amendment to rules of court) or a decision of an intermediate Court of Appeal or of the High Court would be required to alter it …
4.In consequence of the settled practice which exists, the court ought not usually make an order for the payment of costs on some basis other than the party and party basis. The circumstances of the case must be such as to warrant the court in departing from the usual course …”
28.Reference was made to the later decision of the Full Court of Yunghanns v Yunghanns (2000) FLC 93-029 in which is [sic] was said (at 87,471, par 31):
“It will suffice to say that the categories of circumstances which enliven the discretion to award indemnity costs are not closed, and that it is not a condition precedent to the exercise of the discretion that some collateral purpose or species of fraud be established against the party against whom such an order is sought.”
As I also said in that previous judgment, and in the other judgment delivered today, in Colgate-Palmolive Company v Cussons Pty Limited, Sheppard J went on to provide some examples of circumstances that might warrant the exercise of discretion to award costs on an indemnity basis, and usefully Holden CJ in Munday v Bowman (1997) FLC 92-784 at 84,660, drew from his Honour’s decision the following:
(a)Where it appears that an action has been commenced or continued in circumstances where a party properly advised should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts (see Fountain Selected Meats (Sales) Pty. Ltd. v. International Produce Merchants Pty. Ltd. [1988] 81 ALR 397.
(b)Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud (see Fountain Selected Meats (Sales) Pty. Ltd. (supra).
(c)Evidence of particular misconduct causing loss of time to the court and to other parties (see Tetijo Holdings Pty. Ltd. v Keeprite Australia Pty. Ltd (unreported, Federal Court, 3 May 1991)).
(d)The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (see Ragatta Developments Pty. Ltd. v Westpac Banking Corporation (unreported Federal Court, 5 March 1993)).
(e)An imprudent refusal of an offer to compromise.
It is readily apparent that the circumstances here cannot be brought within those examples, but, as the authorities indicate, the categories of cases where indemnity costs may be justified are not closed. Nevertheless, I am not persuaded that there are any circumstances here that can be categorised as exceptional such that indemnity costs are called for. The application before the court was for reinstatement of the Notice of Appeal, and on the basis that the wife had missed the deadline by a few hours, she had no alternative but to bring the application. The determination of that application was then delayed as a result of the wife bringing various applications which needed to be dealt with before that application could be finalised, and there was also an appeal against one of the orders made by this court. However, as I have said already, those applications and the appeal were dealt with by this court and the Full Court respectively, and costs orders were made. Thus, those circumstances cannot be the exceptional circumstances needed to found an indemnity costs order. Accordingly, I propose to dismiss the application for indemnity costs and to make an order for costs in favour of the husband with those costs to be assessed on a party/party basis.
I certify that the preceding ninety (90) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered on 13 August 2015.
Associate:
Date: 13 August 2015
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