Morgan & Valverde
[2022] FedCFamC1A 133
Federal Circuit and Family Court of Australia
(DIVISION 1) APPELLATE JURISDICTION
Morgan & Valverde [2022] FedCFamC1A 133
Appeal from: Valverde & Morgan [2022] FedCFamC2F 253 Appeal number(s): NAA 64 of 2022 File number(s): NCC 3589 of 2019 Judgment of: AUSTIN J Date of judgment: 31 August 2022 Catchwords: FAMILY LAW – APPEAL – Property – Procedural Fairness – Where the primary judge made final orders dividing the property between the parties – Where the evidence at trial comprised only that of the respondent as the appellant failed to file and serve any evidence – Where the primary judge told the appellant he would not be able to cross-examine the respondent due to his failure to comply with the procedural orders – Where the appellant’s failure to adduce evidence-in-chief need not have precluded him from being able to test the respondent in cross-examination – Where denying the appellant the chance to cross-examine the respondent denied him natural justice and was an error of law – Where the error is material – Appeal allowed – Remitted for re-hearing – Costs certificates granted for the parties in respect of the appeal, and to the respondent for the re-hearing. Legislation: Evidence Act 1995 (Cth) Pt 3.7
Family Law Act 1975 (Cth) Pt VIIIAB, s 69ZX
Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 26, 69, 192
Federal Proceedings (Costs) Act 1981 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 8.20, 10.27
Cases cited: Boensch v Pascoe (2019) 268 CLR 593; [2019] HCA 49
Concrete Pty Ltd v Parramatta Design& Developments Pty Ltd (2006) 229 CLR 577; [2006] HCA 55
Goldsmith v Sandilands (2002) 190 ALR 370; [2002] HCA 31
Naparus & Frankham (2020) FLC 93-943; [2020] FamCAFC 32
Re F: Litigants in person guidelines (2001) FLC 93-072; [2001] FamCA 348
Royal Guardian Mortgage Management Pty Ltd v Nguyen (2016) 332 ALR 128; [2016] NSWCA 88
Stead v State Government Insurance Commission (1986) 161 CLR 141; [1986] HCA 54
Number of paragraphs: 43 Date of hearing: 19 and 23 August 2022 Place: Heard in Newcastle, delivered in Sydney The Appellant: Litigant in person Counsel for the Respondent: Mr Duane with Mr Gallimore Solicitor for the Respondent: Boyd Olsen Lawyers ORDERS
NAA 64 of 2022
NCC 3589 of 2019FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MR MORGAN
Appellant
AND: MS VALVERDE
Respondent
order made by:
AUSTIN J
DATE OF ORDER:
31 AUGUST 2022
THE COURT ORDERS THAT:
1.The appeal is allowed.
2.The proceedings are remitted to the Federal Circuit and Family Court of Australia (Division 2) for re-hearing of the cause between the parties for relief under Pt VIIIAB of the Family Law Act 1975 (Cth).
3.The appellant is granted a costs certificate pursuant to s 9 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to him in respect of the costs incurred by him in relation to the appeal.
4.The respondent is granted a costs certificate pursuant to s 6 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to her in respect of the costs incurred by her in relation to the appeal.
5.The respondent is granted a costs certificate pursuant to s 8 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to her in respect of the costs incurred by her in relation to the re-hearing.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Morgan & Valverde has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
AUSTIN J:
By Notice of Appeal filed on 8 April 2022, the appellant appeals from property settlement orders made by a judge of the Federal Circuit and Family Court of Australia (Division 2) dividing property between the parties pursuant to Pt VIIIAB of the Family Law Act 1975 (Cth) (“the Act”).
For the reasons which follow, the appellant’s denial of procedural fairness requires that the appeal be allowed and the proceedings remitted for re-hearing, making it unnecessary to traverse the remaining grounds of appeal which complain of factual error, discretionary error, and the insufficiency of reasons.
Background
In January 2019, the parties ended their de facto relationship. The primary judge found the relationship endured for about nine years (at [11] and [87]), but considered their capital contributions from only the commencement of cohabitation some seven years beforehand (at [13] and [17]–[18]). The parties had no children and each was gainfully employed for portions of the relationship.
In 2012, the parties jointly acquired a parcel of real property (“the Suburb B property”), assisted by bank finance secured by mortgage. The appellant has occupied the property to the respondent’s exclusion since their separation.
In 2017, the appellant established a self-managed superannuation fund and was the sole shareholder and director of the corporate trustee.
Proceedings for property settlement were commenced by the respondent in November 2019. There was no dispute about the existence of jurisdiction to entertain the dispute.
The proceedings were first fixed for trial in April 2021, but were not reached and had to be adjourned. As a consequence, the trial was rescheduled for February 2022 and attendant procedural orders were made to ensure its readiness. As it transpired, the respondent was ready but the appellant was not. He applied for an adjournment but the application was refused and the trial proceeded. Judgment was reserved and delivered a few weeks later in March 2022.
The primary judge found that the respondent had property with a net value of $241,671 and superannuation of $143,085, totalling $384,756 (at [107]).
Against the established background of the appellant’s repeated failure to give proper financial disclosure (at [34], [41], [43], [44], [48], [51], [58], [63], [66], [74], [75], [92]–[100] and [186]), the primary judge found he had property with a net value of $273,772 and superannuation of $512,000, totalling $786,172 (at [111]).
As can be seen, the appellant’s property and superannuation was worth more than double that of the respondent. The Suburb B property was by far the most valuable asset. On the evidence which was adduced by only the respondent, the primary judge found an adjustment of the parties’ property interests would be just and equitable (at [134]).
Her Honour determined that a just and equitable division of their property would result in the appellant taking 57.5 per cent and the respondent 42.5 per cent of the assets and superannuation (at [179]–[188]). To effect the division, the parties kept their own superannuation entitlements, but the respondent took a greater share of the net proceeds which were expected to be yielded by the sale of the Suburb B property (at [192]–[196]).
Grounds 1 and 5
As mentioned, the appellant unsuccessfully sought an adjournment before the trial started. Upon refusal of the adjournment, the trial proceeded. As the appellant failed to file and serve any evidence in compliance with procedural orders made many months beforehand, the evidence at trial comprised only that filed by the respondent, who was not cross-examined. Both parties were permitted to make final submissions about the outcome of the proceedings.
These grounds effectively complain of the same thing: the appellant’s alleged denial of “natural justice” (Ground 1) and the primary judge’s alleged failure to afford him “procedural fairness” by “excluding him from any meaningful participation in the hearing process” (Ground 5).
It is necessary to consider these grounds before any other because, if established, the integrity of the trial process was ruptured and remitter for re-hearing is ordinarily necessary (Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577 at 611–612; Royal Guardian Mortgage Management Pty Ltd v Nguyen (2016) 332 ALR 128 at [9]–[10]).
The appellant’s written submissions in support of these grounds were brief, so it is necessary to tease out the integral elements of the complaints.
The appellant’s complaint about the decision to refuse his application to adjourn the trial is groundless because no appeal lies from the decision (s 26(2)(b)(ii) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (“the FCFCA Act”).
In any event, the transcript reveals the discussion over the proposed adjournment and its foreshadowed refusal to have been entirely unexceptional. The oral ex tempore reasons delivered for the refusal of the adjournment do not form part of the appeal material, but it should be noted the appellant was grateful to have had the dispute heard rather than delayed. He said to the primary judge during final submissions, when the point was being made about the need to have the proceedings concluded:
[THE APPELLANT]: I wanted to get – that’s why I’m here. I wanted to get it over and today.
(Transcript 18 February 2022, p.76 lines 29–30)
Nor could the appellant have any reasonable complaint about the trial progressing without his evidence, given his protracted failure to file and serve the evidence-in-chief upon which he would want to rely. He was not merely late filing evidence. He did not file any evidence at all, even though he must have realised his adjournment application might fail. The appellant’s submission of not having “reasonable opportunity…to submit his own evidence” is rejected. Procedural orders were made long before in April 2021, fixing the trial date and directing the parties to file and serve their evidence by January 2022 in readiness for the trial. While the appellant was apparently hospitalised for six days in January 2022, he had plenty of time to be ready for the trial commencing on 18 February 2022.
However, during the discussion which ensued about the need for the trial to proceed without further delay, the primary judge told the appellant he would not be able to cross-examine the respondent. Ostensibly, that was only because he failed to comply with the procedural orders requiring him to file and serve his evidence-in-chief. Her Honour said:
HER HONOUR: But what it means is, you can’t cross-examine [the respondent]. She doesn’t need to cross-examine you. And at face value it’s open to me to find that the evidence in her affidavit material I should accept because you haven’t challenged it with your own version of events.
(Transcript 18 February 2022, p.9 lines 34–37)
In Re F: Litigants in person guidelines (2001) FLC 93-072 at [253], the Full Court established this as one of several guidelines for judges dealing with self-represented litigants:
A judge should inform the litigant in person of the manner in which the trial is to proceed, the order of calling witnesses and the right which he or she has to cross examine the witnesses.
The respondent commendably conceded in the appeal the primary judge did not do that.
There is no doubt the appellant was in default of the procedural orders (rr 10.26(2)(c) and 10.26(2)(g) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”). Such default then empowered remedial action pursuant to r 10.27(2) of the Rules, which provides (noting the appellant was the respondent at first instance):
Orders on default
(2) If a respondent is in default, the court may:
(a)order that a step in the proceeding be taken within the time limited in the order; or
(b)give judgment or make any other order against the respondent; or
(c)make an order referred to in paragraph (b) to take effect if the respondent does not take a step ordered by the court in the proceeding in the time limited in the order.
The primary judge expressly referred to such power in the reasons for judgment, saying:
101.As a consequence, r 10.27(2) of the [the Rules] gives me the discretion to make orders including the giving of judgment or the making of any other order against [the appellant]. I intend to exercise that power.
…
185.[The appellant] has not complied with orders of this Court and is in default pursuant to r 10.26 of [the Rules], so much so that these proceedings have been heard on an undefended basis.
But the primary judge did not do as portended. Her Honour did not order the appellant to take some other “step in the proceeding” (r 10.27(2)(a)). Nor did her Honour “give judgment” against the appellant (r 10.27(2)(b)). The Response filed by the appellant in February 2020, seeking certain property settlement orders, was not summarily dismissed. In fact, during final submissions, the primary judge elicited from him the precise nature of his proposal, as her Honour was properly intent on determining what just and equitable orders were needed to finalise the cause between the parties under Pt VIIIAB of the Act.
The appellant was allowed to make final submissions, but not permitted to cross-examine the respondent, though no “other order” of that sort was actually made or explained (r 10.27(2)(b)). The hearing did not proceed on an “undefended basis”, as the primary judge said it did (at [185]), since the appellant participated in the trial and resisted the respondent’s application, though he was deprived of an opportunity to cross-examine her.
The primary judge said this in the reasons for judgment:
104.The other matter I would record is that [the respondent’s] evidence is unchallenged albeit to the limited extent that he could in his oral submissions, [the appellant] refuted some of the submissions [the respondent] made which were based on her evidence.
Indeed the respondent’s evidence was unchallenged, but it is not apparent from either the transcript or the reasons for judgment why that is so. The appellant’s failure to adduce evidence-in-chief need not have precluded him from being able to test the respondent in cross-examination about those aspects of her evidence which he disputed.
If allowed to cross-examine the respondent, the appellant would have been bound by her answers to his questions, at least to the extent her evidence was accepted by the primary judge as being credible and reliable, since he led no contrary evidence to positively establish his own version of events (Goldsmith v Sandilands (2002) 190 ALR 370 at [3], [13], [31]–[41], [65]–[70], [82]–[83] and [95]–[106]; Pt 3.7 of the Evidence Act 1995 (Cth)), but he might feasibly have been able to extract favourable concessions from her. It could hardly be doubted there were areas of factual disagreement between them he would wish to explore.
The appellant said in final submissions to the primary judge:
[THE APPELLANT]: But I knew I couldn’t give a case, because I didn’t have any evidence to put and there has been stuff that’s put today that is not correct.
(Transcript 18 February 2022, p.76 lines 34–35)
Inferentially, the “evidence” the appellant admitted he did not then have “to put” was the affidavit material he had failed to file in breach of procedural orders. In the appeal, the respondent submitted the concession should be imputed to mean the appellant had no documents to tender in evidence either, but the submission is rejected as it would flatly contradict the appellant’s assertion in the appeal that he was armed with documents at the trial, which he regarded as being relevant and probative. His assertion cannot be just disregarded as being false without a legitimate basis – and there is none. Significantly, the appellant confirmed to the primary judge that he disagreed with the evidence adduced and the submissions made by the respondent. He challenged the case she put.
The appellant tendered one document concerning the respondent’s “mental health issue”, but that was before the primary judge dismissed the appellant’s application for an adjournment. Immediately before that occurred, the primary judge said to the appellant:
HER HONOUR: You can’t give me any new information, but you can reply to what [the respondent] has said about the adjournment application.
(Transcript 18 February 2022, p.27 lines 3–4)
The transcript does not reveal that the appellant sought to tender any more documents in his possession once the adjournment was refused and he was told he could not give the primary judge “any new information”.
The appellant confirmed in the appeal that he would like to have cross-examined the respondent about the documents he held. He asserted the documents tended to contradict the evidence-in-chief given by the respondent about the quantum of money she spent from joint bank accounts, the quantum of money she allegedly paid towards the mortgage secured over the Suburb B property post-separation, the amount of money he allegedly salary-sacrificed and so diverted away from the parties’ joint benefit, the alleged periods of his unemployment, and the alleged quantum of wages earned during periods of his employment. In light of the documents and the respondent’s oral evidence in cross-examination, the findings made in relation to each of those facts and the consequent assessment of the parties’ contributions might have been different from those reached by simple acceptance of the respondent’s evidence-in-chief.
The respondent called upon the appellant to produce such documents in the appeal. He was ordered to do so and the appeal was adjourned part-heard to enable his compliance. Upon resumption of the hearing, the respondent contended the documents produced by the appellant could not have done the evidentiary work for which he contended, though the question is not what the documents could have proven in isolation if tendered, but rather what oral evidence they might have helped elicit from the respondent in cross-examination.
The appellant had no absolute right to cross-examine the respondent – only an absolute right to a fair trial. However, supposing appropriate notice is given (r 8.20 of the Rules), it would be a rare case in which the refusal of a party’s request to cross-examine a material witness at final trial would not manifest the deprivation of procedural fairness (Naparus & Frankham (2020) FLC 93-943 at [16]–[26]).
Using express statutory power to place limits on the length and breadth of cross-examination is an entirely different thing from denying an opportunity to cross-examine altogether (ss 69(2) and 192(2) of the FCFCA Act; s 69ZX(2) of the Act in respect of child-related proceedings, which these were not).
Although the appellant did not specifically ask to cross-examine the respondent, he had already been told he would not be allowed to do so and, absent legal representation, he meekly did not contest the ruling. Denying the appellant the chance to cross-examine the respondent, at least without any adequate explanation for why and without giving him the chance to be heard about the ruling, denied him natural justice and was an error of law.
As was observed by the High Court of Australia in Stead v State Government Insurance Commission (1986) 161 CLR 141 (“Stead”) at 145–146:
Where, however, the denial of natural justice affects the entitlement of a party to make submissions on an issue of fact, especially when the issue is whether the evidence of a particular witness should be accepted, it is more difficult for a court of appeal to conclude that compliance with the requirements of natural justice could have made no difference. True it is that an appeal to the Full Court from a judgment or order of a judge is by way of rehearing and that on hearing such an appeal the Full Court has all the powers and duties of the primary judge, including the power to draw inferences of fact: Supreme Court Rules O. 58 rr.6 and 14. However, when the Full Court is invited by a respondent to exercise these powers in order to arrive at a conclusion that a new trial, sought to remedy a denial of natural justice relevant to a finding of fact, could make no difference to the result already reached, it should proceed with caution. It is no easy task for a court of appeal to satisfy itself that what appears on its face to have been a denial of natural justice could have had no bearing on the outcome of the trial of an issue of fact. And this difficulty is magnified when the issue concerns the acceptance or rejection of the testimony of a witness at the trial.
(Emphasis added)
In large measure, the respondent’s evidence-in-chief was uncorroborated and so her credibility was vital to its acceptance. As Kirby J observed in Goldsmith v Sandilands at [64], the High Court in Stead had:
…set a very high standard where credibility was the issue.
Had the appellant cross-examined the respondent, it might have made no difference at all, but that is not the test. Adopting the language used by the High Court, it is no easy task to be satisfied that the cross-examination of the respondent by the appellant could have had no bearing at all on the outcome. I am not so satisfied. It follows that the error was material and there is no option but to remit the proceedings for re-hearing.
Conclusion
The appeal is allowed for the error exposed by Grounds 1 and 5. It is unnecessary to consider the remaining grounds (Boensch v Pascoe (2019) 268 CLR 593 at [7]–[8]).
The parties agreed that remitter of the proceedings for re-hearing was necessary, that expedition of the re-hearing was desirable, and there was no reason to exclude the primary judge from the re-hearing.
The appellant was self-represented and had no costs in the appeal to recoup, aside from the cost of transcript. The error of law which requires the appeal to be allowed was not induced by the respondent. There is no proper basis upon which she should be ordered to cover the cost of the appellant’s disbursement. However, the parties should both have costs certificates for the appeal under the Federal Proceedings (Costs) Act 1981 (Cth). The respondent should also have a costs certificate for the re-hearing, though that is unnecessary for the appellant as he expects to again be self-represented.
I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Austin. Associate:
Dated: 31 August 2022
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