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…
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- AGLC
- Morgan & Valverde [2022] FedCFamC1A 133
- Case
- [2022] FedCFamC1A 133
- Decision Date
CaseChat Overview and Summary
In the case of Morgan & Valverde, the appellant, Morgan, challenged a property settlement order made in the Family Court of Australia. The primary judge had ordered a division of property between Morgan and the respondent, Valverde, which Morgan deemed unjust. The central issue in the appeal was whether the trial judge denied Morgan procedural fairness by not allowing him to cross-examine Valverde. This issue required the court to consider whether such denial materially affected the outcome of the proceedings. Additionally, the appeal touched upon other grounds, such as factual errors, discretionary errors, and the insufficiency of reasons, but these were rendered moot by the primary issue of procedural fairness.
The court found that the denial of procedural fairness was significant because it prevented Morgan from challenging Valverde's credibility, which was crucial given the lack of corroboration for her evidence. The court relied on the High Court's decision in Stead v State Government Insurance Commission, which established a high standard for situations where credibility is in question. The court concluded that it was not possible to be satisfied that cross-examination by Morgan could have had no bearing on the outcome, thus deeming the error material. Consequently, the appeal was allowed, and the case was remitted for re-hearing.
In light of the findings, the court ordered that the appeal be allowed, and the proceedings be remitted for re-hearing. Both parties were granted costs certificates for the appeal under the Federal Proceedings (Costs) Act 1981 (Cth), and the respondent was also granted a costs certificate for the re-hearing. The court emphasized the necessity of expediting the re-hearing and did not find any reason to exclude the primary judge from presiding over it.
The court found that the denial of procedural fairness was significant because it prevented Morgan from challenging Valverde's credibility, which was crucial given the lack of corroboration for her evidence. The court relied on the High Court's decision in Stead v State Government Insurance Commission, which established a high standard for situations where credibility is in question. The court concluded that it was not possible to be satisfied that cross-examination by Morgan could have had no bearing on the outcome, thus deeming the error material. Consequently, the appeal was allowed, and the case was remitted for re-hearing.
In light of the findings, the court ordered that the appeal be allowed, and the proceedings be remitted for re-hearing. Both parties were granted costs certificates for the appeal under the Federal Proceedings (Costs) Act 1981 (Cth), and the respondent was also granted a costs certificate for the re-hearing. The court emphasized the necessity of expediting the re-hearing and did not find any reason to exclude the primary judge from presiding over it.
Orders
Orders of the court
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Background
Background to the litigation
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
Evidence
Evidence Before The Court
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.
Decision
Reasons for decision
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.
Ratio Decidendi
Legal Principle Established
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