MP & MS

[2004] FamCA 1313

[2004] FamCA 1313

FAMILY LAW ACT 1975

IN THE FULL COURT OF

THE FAMILY COURT OF AUSTRALIA

AT PERTH

Appeal No. WA 2 of 2004

File No. EX PT 289 of 2003

IN THE MATTER OF:

MP

Appellant/Wife

- and -

MS

Respondent/Husband

REASONS FOR JUDGMENT

BEFORE:  Bryant CJ, Kay and Boland JJ
DATE OF HEARING:       29^th day of November 2004
DATE OF JUDGMENT:     29^th day of November 2004

Catchwords:
FAMILY LAW – APPEALS – Property – Alleged miscarriage of justice – Alleged incompetence of counsel at trial and negligent representation – Where trial judge able to make findings on the evidence – Principles to be applied – Appeal dismissed

The parties commenced cohabitation in 1999 and married on 7 October 2000.  There were no children of the marriage, although each had a child from a previous relationship.  The parties separated in December 2002/January 2003.

Prior to the parties meeting, the husband had been diagnosed with incurable lymphoma.  He had chemotherapy and was unable to work, but subsequently went into remission.  At the commencement of the marriage the wife worked as a shop assistant and the husband was unemployed until the end of 2000.  In 2002, the husband had a relapse of his medical condition and at the time of trial, was unfit for employment.

At the commencement of the marriage the husband’s net assets were in the range of $188,780.  The wife owned only modest assets and her debts exceeded the value of those assets.

In 2000 the wife and her mother purchased a property, ‘B’, through Homeswest.  The parties and the wife’s parents occupied that property from mid 2000.  In December 2000 the parties established a business partnership, known as ‘L Surveying’, contracting the husband’s services as a surveyor.   The parties worked on a number of contracts from December 2000 until December 2002.  In 2001 the husband purchased a property, ‘A’, which subsequently became the matrimonial home.  At trial, the husband was residing in the home.

The trial judge noted that the assets and liabilities of the parties and their value were agreed.  Having considered the evidence, however, the trial judge said that the concessions made by the wife’s counsel that they were the entirety of the assets was not correct.  The trial judge found that the net assets of the parties at trial were $282,029.

The trial judge identified inadequacies in the presentation and running of the wife’s case which was subsequently the subject of findings of gross negligence on the part of the wife’s solicitor.  Nevertheless, the trial judge was, on the evidence, able to make findings as to the assets and liabilities and the contribution based entitlements of the parties.

Penny J concluded that having regard to the husband’s greater initial contribution, there should be an apportionment on contribution of 80% to the husband and 20% to the wife. Her Honour considered the matters relevant to s.75(2) of the Act and found that there should not be any further adjustment on account of those factors. Her Honour found that a division of property in the proportions 80:20 in favour of the husband was a just and equitable outcome.

At the conclusion of the trial, her Honour made an order for costs against the wife, ordering her to pay $25,000 to the husband.  Her Honour found that the conduct of the wife and/or her legal advisers justified the making of an order for indemnity costs.  In subsequent proceedings, to which the husband was not a party, the wife obtained an order against her solicitor that he pay the sum of $25,000 pursuant to the costs order.

The wife appealed.  The wife’s case on appeal was that her inadequate representation at trial did not enable her case to be presented properly and that the process being an adversarial one must have caused a miscarriage of justice.  No further evidence was sought to be adduced as to valuations or documents which might support the wife’s contentions that the poor representation had led to a miscarriage of justice in the outcome.  The wife also sought reconsideration of the costs order depending on the outcome of the appeal.

In dismissing the appeal, the Full Court held:

1. The relevant principles in relation to alleged incompetence and improper behaviour of counsel are set out in the decision of the Full Court in OP and TP and the Child Representative (conduct of counsel) [2002] FamCA 1155; (2003) 30 Fam LR 281.

2. Where no prejudice has occurred it would be undesirable for appellate courts to consider whether counsel’s acts or omissions constituted incompetence.

3. No prejudice has occurred in this case.  The matter proceeded with evidence from the parties and witnesses and cross-examination.  The issues raised by the parties were explored.  The husband’s initial contributions were not disputed.  The trial judge was able to make findings as a result of the evidence on a number of matters.  The trial judge was aware of the shortcomings in the wife’s case at trial and had, nevertheless, a proper evidentiary basis for her findings.

4. The wife did not meet the test set out in OP and TP.  The wife did not demonstrate that there was a reasonable probability that but for counsel’s unprofessional errors the result of the proceedings would have been different, or put another way, that the result would have been different had the case been better presented.

Appeal dismissed

1. BRYANT CJ:  This is an appeal against the decision of Penny J on property proceedings between the husband and wife.  The trial judge ordered that the wife transfer her interest in a property, ‘A’, in Western Australia in which the husband was living to the husband together with other assets in his possession.  The trial judge further ordered that the husband's interest in various assets including the property ‘B’, a Western Australian property owned by the wife and her parents, vest in the wife.  There was a further order that the wife pay the sum of $11,725 to the husband.  The effect of these orders was to divide the assets found by the trial judge to constitute the assets for division on the basis of slightly more than 20 per cent to the wife and slightly less than 80 per cent to the husband.

Background

1. The background facts about which there appears to be no dispute are set out by the trial judge in the reasons for judgment.  The husband and wife commenced cohabitation in October 1999 having met some months prior to that date.  The wife had a child of a previous relationship and the husband had a child of his first marriage who lived with his former wife.  Prior to the parties meeting the husband had been diagnosed with incurable lymphoma, a type of cancer, during the year 2000.  He had chemotherapy treatment and was unable to work.

1. When the parties commenced living together in October 1999 the wife moved into the husband's home with her son and parents.  In February/March 2000 the wife and her mother purchased a property, ‘B’, through Homeswest.  The wife's parents moved into ‘B’ in May 2000 and the husband and wife moved into that property in around July 2000.  The parties married on the 7th of October 2000. At the commencement of the marriage the wife worked as a shop assistant and the husband was unemployed until the end of 2000. 

1. In December 2000 the husband and wife established a partnership contracting the husband's services as a surveyor.  The business was known as ‘L Surveying’.  The parties worked on a surveying contract in the Pilbara region from December 2000 until July 2001 and had another contract in that region from September 2001 until December 2001.  Subsequently from March 2002 until August 2002 the business had a surveying contract in an area south of Perth and a further contract in the Pilbara region from August 2002 until December 2002.

1. In around July 2001 the husband purchased a property, A, which became the matrimonial home until separation in December 2002 or January 2003.

1. The wife subsequently obtained a violence restraining order against the husband and an order in the Court of Petty Sessions that he be evicted from the home.  That order was subsequently dismissed and the husband then applied for sole use and occupancy of the former matrimonial home and an order was made in his favour on the 27th of February 2003.  He has remained in the former matrimonial home since that time.  In 2002 the husband had a relapse of his medical condition and was undergoing chemotherapy until May 2003. 

1. The trial judge heard evidence from his doctor and accepted that he was, at the time of hearing, unfit for employment due not only to his medical but also his psychological condition. 

The judgment of the trial Judge

1. The trial judge in the judgment made findings as to the assets and liabilities of the parties as required pursuant to section 79 of the Family Law Act. The trial judge noted in paragraph 11 of the reasons for judgment that the assets and liabilities of the parties at trial and their value were agreed by counsel for the husband and wife. Having considered the evidence, however, the trial judge said:

"In my view the concession by the wife's counsel that these were the entirety of the assets was not correct."

1. That comment belies the difficulties experienced by the wife in the preparation and running of her case.  A reading of the transcript makes it clear that the trial judge identified inadequacies in the presentation and running of the wife's case which were subsequently the subject of findings by the trial judge of gross negligence on the part of the wife's solicitor.  Nevertheless, the trial judge was, on the evidence, able to make findings as to the assets and liabilities.

10.They included concessions by the wife's counsel as to the values of the property brought into the relationship by the husband, at the date of its acquisition, and in relation to property ‘A’. The trial judge found that the net assets of the parties had a value of $282,029. The trial judge considered the contributions of the parties pursuant to section 79(4) of the Family Law Act. Those findings in particular included findings that the husband owned the property when the parties commenced living together and that the wife, her son and parents had moved into that property. The findings included findings that the husband had owned a Toyota Landcruiser, had savings in excess of $35,000, survey equipment, and shortly after the parties commenced living together, received earnings of $39,000 from previous employment. She found that his only debt at the time at the commencement of cohabitation was $13,650. She found in total that the husband's assets at the time the parties commenced living together were $188,780. She found that the wife owned a car, some jewellery and furniture but had debts which exceeded the value of those assets.

11.The trial judge made findings about the acquisition of the property, ‘B’, by the wife and her parents with borrowings from Homeswest.  She found that the parties moved to ‘B’ during the year 2000 and that the husband put his property on the market.  It appears to have been common ground that the proceeds of that sale were used to acquire the property ‘A’, together with other monies earned by the parties.  The trial judge also found that the partnership earned approximately $400,000 gross from when it was commenced in December 2000 over the ensuing 2 years and that during the course of the relationship and after ‘B’ was purchased approximately $20,000 in lump payments were made to reduce the mortgage on the property.  She found that $5000 of those funds was contributed by the wife's parents and the balance by the parties from their earnings.

12.The trial judge made findings about the wife's employment since separation and the accumulation of modest superannuation entitlements.  In relation to non-financial contributions the trial judge found that the wife was primarily responsible for the household chores and that the husband was responsible for the maintenance on the homes in which the parties had lived.  She found that their non-financial contributions during the marriage were equal. 

13.The trial judge's conclusion on contributions was that having regard to the greater financial contributions of the husband in bringing into the relationship the assets that he had, there should be an apportionment on contribution of 80 per cent to the husband 20 per cent to the wife.  The trial judge described the husband's financial contribution at the commencement of the relationship as very significant.  She noted the husband's savings and earnings received after the parties lived together was spent on living expenses and as a springboard to accumulate other assets.  She found that the financial contribution during the course of the marriage was equal.

14.The trial judge considered whether there were any factors under section 75(2) of the Family Law Act which might require a further adjustment. She noted the ages of the parties, the husband's ill health, the wife's employment and the effect of the division of assets on a contribution basis. In particular, she observed that the husband would retain their property ‘A’ with no mortgage and his other assets and that the wife would retain her interest in the ‘B’ property which she owned with her parents. As a result, the trial judge found that there should not be any further adjustment on account of section 75(2) factors and made orders which she described as the wife receiving slightly more than 20 per cent of the assets of the parties and thus, the husband receiving slightly less than 80 per cent. The trial judge noted that the value of the assets of the parties had increased by approximately $100,000 during the marriage and that the wife would retain approximately 60 per cent of that sum. She observed, as she was required to do, that in all the circumstances that result was, in her view, a just and equitable one.

15.Following the delivery of that judgment the trial judge was then required to consider an application brought by the husband that the wife pay his costs arising from the proceedings.  On the 14th of April 2004, the trial judge gave judgment in relation to the cost issue.  The result was that the wife was ordered to pay $25,000 to the husband on account of his costs.  At paragraph 26 of the judgment the trial judge says:

"In my view, the conduct of the wife and/or her legal advisers in failing to properly quantify her claim before a trial, failing to accept offers which were favourable to her, failing to make any written offer of settlement, failing to attend the conciliation conference, failing to discover documents and making allegations of fraud against the husband justified the making of an order for indemnity costs."

16.Subsequent to that judgment the wife filed an application against her solicitor to which the husband was not a party, seeking that the solicitor make a contribution towards the costs or indemnify her in relation to the costs ordered to be paid to the husband.  On hearing of that application the trial judge examined the evidence and considered the legal basis on which she could do so.  She then ordered the wife's solicitor to pay the sum of $25,000 pursuant to the order to which I have referred, namely, that the wife pay the husband's costs in that sum.  The judgment in that matter, handed down on the 22nd of October 2004, deals in some detail with the history of the litigation.  The trial judge's conclusions, in summary, are in paragraphs 33 and 34.  In paragraph 33, the trial judge says that the solicitor's conduct in the preparation and presentation of the wife's case was grossly negligent.  She notes that at the commencement of the trial he had no idea of what she was likely to receive by way of property settlement and as a result was unable to give her advice on any offers made by the husband including an offer which was greater than the sum awarded to the wife after trial.   She observed and noted in paragraph 34: 

"All of the criticisms levelled at the wife by me came about because of Mr S's negligent preparation of her case and his lack of knowledge of the likely outcome.  In these circumstances he should compensate the wife for all the costs ordered against her while he was acting for her."

17.The inadequate representation referred to by her Honour included negligent or inadequate legal advice, failure to advise of the husband's case, failure to properly investigate the wife's assertions as to the financial dealings by the husband, and concessions as to valuations made by her counsel without instructions.

Grounds of Appeal

18.The amended notice of appeal filed on behalf of the wife relies upon three grounds. 

Ground 1.  was abandoned at the commencement of the hearing.

Ground 2.  is that the appellant's case at the first hearing was inadequately prepared and conducted so that factual information was not presented to the Court upon which the learned trial judge could make a sound decision.

Ground 3.  was that the order for costs made on the 10th of May 2004 should be reconsidered depending on the outcome of the appeal.  

19.The wife's case on appeal was essentially that her inadequate representation did not enable her case to be presented properly and the process being an adversarial one must have caused a miscarriage of justice in the decision itself. The judgment of the trial judge in relation to the solicitor's negligent representation and requirement that he pay the wife's cost to the husband was admitted without objection as further evidence pursuant to section 93A(2) of the Family Law Act, and we accept for the purpose of this appeal that the wife had inadequate representation.

20.The gravamen of the wife's concerns appear to be that there was a concession made without instructions as to the value of the property brought into the relationship by the husband which may have caused the trial judge to over value the husband's initial contribution or alternatively to under value any subsequent contribution to that property by the wife; and secondly, her assertion that the husband had not accounted for moneys earned by the partnership during their cohabitation.  No further evidence was sought to be adduced as to valuations or documents which might support the wife's contentions that these matters had led to a miscarriage of justice in the outcome.

21.The relevant principles in relation to alleged incompetence and improper behaviour of counsel at trial as set out in the decision of the Full Court in OP and TP and the Child Representative (conduct of counsel) [2002] FamCA 1155; (2003) 30 Fam LR 281. The Full Court comprising Chief Justice Nicholson and Justices Buckley and Kay, considered the relevant principles when an alleged miscarriage of justice occurred due to alleged incompetence and improper behaviour of counsel at trial.

22.The Court considered relevant Australian, United States and Canadian cases and in the course of the judgment drew a distinction between proceedings in respect of children which they likened to criminal proceedings, and other proceedings under the Family Law Act. In OP and TP, the proceedings were mixed children's and property proceedings.  At paragraph 153 of the judgment their Honours said:

"Given our findings that no miscarriage of justice has been established, it becomes unnecessary for us to consider the other issue that the husband would have needed to establish in order to attack the judgment, that being the alleged incompetence of his counsel.  We agree with the views expressed by Major J on behalf of the Supreme Court of Canada in R v GDB (supra) at 29, to the effect that in those cases where no prejudice has occurred, it will usually be undesirable for appellate courts to consider the performance component of the analysis.  In referring to the performance component, his Honour was referring to the issue as to whether counsel's acts or omissions constituted incompetence.  In that regard we also bear in mind the comments of O'Connor J in Strickland's case, endorsed by Major J in the above case, as to the need to be cautious when exercising hindsight."

23.The views expressed in R v GDB reported in (2000) SCC 22, were set out by the Full Court at paragraph 103 of the reasons as follows.  In that case, Major J, delivering the judgment in the Supreme Court said at 25:

"Where counsel fails to provide effective representation, the fairness of the trial, measured both by reference to the reliability of the verdict and the adjudicative process used to arrive at the verdict, suffers.  In some cases the result will be a miscarriage of justice."

24.At paragraph 107 the Full Court cited from the judgment of Strickland v Washington at 104 S.Ct. 2052 [1984] per O'Connor J, at 2068:

"The defendant must show that there is a reasonable probability that, but for Counsel's unprofessional errors, the result of the proceeding would have been different.  A reasonable probability is a probability sufficient to undermine confidence in the outcome."

25.OP and TP was the subject of a special leave application to the High Court which was unsuccessful.  Adopting the dicta of the Full Court expressed in paragraph 153 of the judgment in OP and TP, that where no prejudice has occurred it would be undesirable for appellate Courts to consider the performance component of the analysis, I turn to the question of whether it has been established that prejudice has occurred as a result of the trial judge’s decision in this case.

26.Notwithstanding the concerns of the trial judge regarding counsel's inadequacies, the transcript reveals that the matter proceeded with evidence from the husband and wife and witnesses’ cross-examination. Those issues raised by the parties were explored. Although the procedures before the trial judge were adversarial in the sense that the parties were required to adduce the evidence to support their respective cases as opposed to an inquisition on the part of the trial judge, section 79 of the Family Law Act requires that the result be just and equitable. That requires the trial judge within the rubric of the evidence, to arrive at a result which is just and equitable although it may not be what either party submits should occur.

27.The trial judge in this case was able to make findings as a result of the evidence on a number of matters. The issues were explored and there was evidence which enabled the trial judge to make the findings that she did. Similarly, the findings of the trial judge made under section 75(2) on the evidence were open to her. Accepting that the procedures were adversarial, the trial judge was aware of the shortcomings in the wife's case at trial and had, nevertheless, a proper evidentiary basis for her findings.

28.The appellant contends that essentially the miscarriage that has occurred is one that has occurred in the process.  The summary of argument contends that the proceedings before the trial judge were not, in fact, adversarial because the wife did not know the husband's case and that the husband's evidence was not properly tested and that the wife did not have the opportunity to present her case in an orderly and proper manner.

29.As I have indicated there was a significant degree of evidence and cross-examination that took place before the trial judge, albeit that the representation was, nevertheless, inadequate as her Honour found.  However, the wife has not demonstrated that there is a reasonable probability that but for counsel's unprofessional errors the result of the proceedings would have been different, or put another way, that the result would have been different had the case been better presented.

30.In addition, I observe rather that this was a short marriage, that there was no dispute that the husband brought a property into the marriage and other significant assets, that the parties lived on their earnings from the partnership and paid mortgages and that on the common facts the trial judge's decision does not appear outside the allowable range.  However, in the end the wife has not met the test set out in OP and TP and has not demonstrated that there is a reasonable probability that the result would have been different but for the errors that occurred and as a result, in my view, the appeal should be dismissed.

31.KAY J:  I agree.  The outcome is, perhaps, somewhat generous to the husband in terms of the division of assets particularly in reaching a result that the wife should have to pay him some money.  However, it is within the range of a generous ambit of discretion and nothing has been demonstrated to us to show that a further hearing conducted with, perhaps, somebody more efficient than the wife's counsel would have resulted in some different outcome in favour of the wife.

32.BOLAND J:  I concur with the reasons of the Chief Justice and the reasons also of his Honour Justice Kay and have nothing further to add other than I concur that the appeal should be dismissed.

Orders

1. That the appeal be dismissed.

2. That there be no order as to costs.